Industry News | February 25, 2009

7-Eleven Takes on Caribou & Starbucks

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If the breakfast segment is beginning to reach capacity, the coffee market needs the fire marshal.

Recent industry headlines seem to be dominated by the swelling number of national quick-serves introducing coffee programs. Now another segment is trying its hand at the morning caffeine craze—the convenience stores.

7-Eleven today rolled out the new Brazilian Bold blend as part of its hot beverage bar targeted at “young java-drinkers.” The new offering features Arabica beans and has a stronger robust flavor than the company’s other milder varieties.

“Our new Brazilian Bold scored just as high as strong flavors from national competitors in the taste test,” says Paul Pierce, 7-Eleven’s senior director of merchandising, in a statement.

Priced between 99 cents and $1.79 depending on cup size, the c-store chain’s coffee offerings are meant to appeal to consumers seeking value in the down economy.

7-Eleven’s hot beverage bars feature five or more varieties of coffee, four flavored syrups, four toppings, creamers, sugars, and teabags.

“Our customers can create their own personalized hot drinks with no waiting in line to order or for someone else to prepare it,” Pierce says. “7-Eleven offers a greater value, at around $1 a cup—no matter what goes into it—versus typical coffeehouse prices of $3 to $4.”

A brand’s perceived value has become increasingly important as consumers look for ways to trade down from their pre-recession spending. Starbucks, viewed by most consumers as a luxury brand, is working to save the suffering company by repositioning itself as an affordable beverage option.

In addition to adding Brazilian Bold, 7-Eleven is also rolling out dozens of private-label items under the brand name 7-Select.

Read more about the increasing competition from 7-Eleven in QSR’s November 2008 cover story The Big Bite on QSRs.

--Blair Chancey