It's a surprising fact that gyms don't sell much coffee.
It doesn’t make sense. In a world where Wetherspoons and Greggs are cleaning up selling millions of coffees per week, why can’t gyms nail it? Health & fitness fanatics are obsessed with coffee (just take a look on Instagram), so what’s going wrong?
The answer is simple: Gyms are not doing anything differently.
When you think about it, there's a lot of competition. Coffee is everywhere and customers have so much choice. Cyril Lavenant, Foodservice Director UK at the NPD Group, a market researcher, says;
"Already there's huge competition in the coffee market - it's not only the big coffee shops, it's everyone from fast-food to bakeries - everyone is offering coffee."
Differentiation is key
So why have decision makers been prepared to invest heavily in expensive equipment that produces the same coffee as everywhere else? This even applies to the UK’s coolest fitness studios, gyms and health clubs. These places are at the top of their game, each offering something unique to attract Millennial urbanites looking for something cooler than a bog standard gym. They know their members expect them to innovate, but they play it safe with coffee because coffee is viewed as an ‘easy win’. Then they wonder why there's been no real return.
Millennials don’t want a full-fat latte from their gym... they want healthier, more exciting options from the place where they pay good money to work out in a cool environment. The coffee shop down the road which actually specialises in coffee will always win at lattes.
It’s a different ball game with juices and smoothies, which sell well in gyms because they feel healthier than their traditional alternatives such as Lucozade and other fizzy drinks. There also aren’t fantastic juice and smoothie bars everywhere you look in the city, unlike the abundance of specialist coffee shops. Ultimately, everyone believes they should be making more revenue from coffee, and they just can’t pinpoint why they’re not. Some are more prepared to admit to this than others, but most are forthcoming once they realise that they’re definitely not alone.
Take a look at your members
Today's standard coffee menu has been designed primarily for Baby Boomers, which makes sense because for a long time, they've been the guys spending the most money. But today, how many of your customers are 50+? If the answer is not the majority, then your coffee offering is simply dated. Within the next 18 months, Millennials (those in their early 20s to late 30s) will overtake Baby Boomers to become the UK’s largest cohort of active spenders. This means that gyms need to consider Millennial expectations in absolutely every aspect of the value proposition.
What do they want?
At TrueStart Coffee, we've spent a huge amount of time researching the Millennial consumer, specifically their food and drink habits.
We’ve concluded that Millennials want and demand four things. In no particular order:
- Consistency and innovation (which are vaguely opposing)
- Health and indulgence (also traditionally conflicting requirements)
- Control (over how they are going to feel, over what’s going into their body, over where their food and drink comes from, and even over how long things take)
- Experience (there’s a reason why Instagram is so popular!)
This generation don’t want one at the expense of another, we want it all (I fall into this cohort after all).
Ah, the gym selfie. Almost as popular as coffee amongst millennial gym goers!
Put yourself in the shoes (or trainers) of a millennial gym goer who is at the gym. You're about to workout or have already finished and fancy a healthy treat, or a boost, or just a refreshing drink. Now let’s apply the above requirements to a traditional hot coffee offering, lattes and the like (yawn).
First up, consistency and innovation. The coffee from a gym is unlikely to be very consistent. This is not because the gym is necessarily using bad coffee, but because the staff are not trained baristas. As far as innovation is concerned, some gyms are recognising this trend with things like coconut oil coffee, but for the most part the menu is very standard and generally packed with milk and sugar. Not exactly what you want or expect from your gym.
Next we’ve got the demand for something simultaneously healthy and indulgent. Everybody knows that a latte is not overly healthy, but 70% of people in the UK choose milky coffee because they prefer the taste. It’s hard to convince these guys to opt for black coffee and even harder to convince sugar addicts that they’re sweet enough. Black coffee is much healthier, but only a minority of customers drink it, because it just doesn’t feel indulgent. They want something that ticks both boxes (which is why so many people use sweeteners, or eat cookie-flavoured protein bars).
Healthy, indulgent and Instagrammable - we really do want it all
What do I mean by control? We millennials like to control everything from what goes in our mouths to how we feel. Sometimes a coffee can make you feel wired, and sometimes you need more than one to get going. Sound familiar? Whilst most of us prefer a natural pick-me-up to a sugary energy drink, it’s the lack of control over how we’re going to feel that can put us off. We also want to control our nutritional intake (fat, carbs, calories etc), and now more than ever, we want to feel a connection to where our food and drink comes from.
Experience is a biggie. There’s a lot of research to suggest that millennials prefer to spend money on experiences rather than things. We have a totally different mind set to the baby boomer generation. The coffee experience in a gym is generally bog standard - you don’t feel like you’re getting a full coffee experience, which you do get down the road at a coffee shop. When was the last time you saw someone post a photo of an average-looking coffee on Instagram?
Can you see why regular coffee just doesn’t tick the boxes?
Millennial customer + bog standard coffee = 😡 👎
How can you meet their demands?
The reason we’ve done this research is because we wanted to take TRUESTARTⓇ out of the home and into the world, where it's needed most. We wanted to release a product backed by clear trends, that truly meets the needs of the soon-to-be largest group of active spenders in the country. We believe the future of coffee for gyms is TrueStart Nitro Cold Brew Coffee.
Nitro is growing incredibly fast in the US and is gaining real traction even here in the UK, despite the weather! Starbucks have said that cold coffee beverages will account for half of their revenue within 5 years, which is a huge statement. That’s where they see the gap and the growth. Traditional coffee has stagnated and anyone who fearfully sticks to their guns and relies on it completely whilst expecting revenue growth should not expect good news, especially in a Millennial-heavy environment.
Put yourself back into those sweaty millennial trainers at the gym. You're about to workout or have already finished and fancy a treat, or a boost, or just a refreshing drink. Now let’s apply those previously identified requirements to Nitro Coffee.
The key is to be as open minded as your customers here. Nitro Coffee opens up a new world for coffee. It’s just not the same drink, and that’s a good thing.
Consistency and innovation. If you don’t know what Nitro Coffee is, it is fresh cold brew coffee infused with nitrogen for an amazing fluffy, creamy smoothness. It is poured cold and much lighter than regular coffee which makes it super refreshing. There is no doubt that this is super innovative and delivery is simple and consistent, you don’t need to be a barista. The perfect Nitro Coffee pour requires zero training.
Note: home brewed variations of cold brew coffee will vary in taste from batch to batch.
But is it healthy and indulgent? This is where I believe Nitro Coffee is a real winner. It is a refreshing, almost sweet drink despite the fact that there is no sugar, dairy, fat, carbs or calories. In fact, there is nothing added at all, except the nitrogen bubbles. This means you get all the taste benefits of a latte-type drink with none of the sugar and fat. Win, win! The real sweet-tooths can jazz up their Nitro with a low calorie syrup.
Control. This is unique to TrueStart, and it’s an important point. The caffeine content is reliable and consistent, so you know that you will feel great every time, with no crash or jitters. This globally unique selling point has been the driver behind the success of our retail range. Health-conscious, millennial consumers also feel a strong connection to the brand, which has established itself as the leader in healthy coffee here in the UK, growing largely via word of mouth.
Experience. Nitro is a super cool experience in a gym environment, one that provides a talking point and generates a real buzz. The product is very Instagrammable - on tap, Nitro cascades like a Guinness with a frothy head and has a unique mouthfeel, similar to beer. TrueStart Nitro Coffee is also cold, which is much more refreshing before or after your workout than a scolding hot cappuccino!
Millennial customer + something new = 🔥 🔥 🔥
Innovate or lose
I’m writing this blog in the hope that more companies in the health space will take coffee innovation seriously, and stop wasting money on run-of-the-mill coffee offerings that add zero value to customers and bring no return as a result. This is particularly important now that Baby Boomers are taking a back seat - Millennials are the big spenders now.
Millennial customer + Nitro Coffee = 😍 📷 🎉
Above all, I’m writing this blog to challenge perception on what is risky and what’s not. To the uneducated eye, Nitro might be perceived as a risk because it is the new kid on the block. Often this perception prevails amongst the same people that were prepared to believe that traditional coffee in the gym wasn’t a risk, even though there’s a better option in the coffee shop next door. To the educated eye it’s obvious that Nitro is an opportunity not to be missed, something to get excited about with your customers. The risk is in standing still, without a coffee offering that matches what your customers want. Millennials are here and spending, whether you're ready or not.