C&I recently spoke with 7-Eleven CEO Angus McKay about the company’s latest Recycling Revolution, how to sell 500 coffees per store, per day, and his favourite Slurpee flavours.
Q: What is the process or innovation plan to make the 500 coffees, per store, per day become a reality?
A: Obviously we sell a lot of coffee today, so we know that the offer and product is attractive in its own right. One of the core barriers around it is communication – it is good coffee and it is a good offer, so that is our general marketing message. The core issue for us is actually making sure that stores can cope with that kind of volume. We have some stores that have still only got one machine, and we know the math of what a machine is capable of doing, we know what the customer wants in terms of service expectation which is how long they wait for a cup of coffee. The key is to be ahead of it, there are some stores where two machines would probably be overkill. We have some stores with multiple machines, and at peak times they could do with six machines, but the reality is when you actually look at that over the course of a day, four is the right number. So the maths, working out what the right number of machines is per store to deliver on expectations from a customer perspective is almost the most fundamental. And then we backtrack from that, we’ve got some stores that can only fit one machine and so in some cases we close the store and re-locate it, other times we work out what needs to be removed from the store. How do we create the space for the machines? You’ve got to re-jig it to fit it into the existing space. The first part is the vision, the second part is knowing the barriers to someone wanting a coffee, and the third to get ahead of the curve to make that occur.
Q: Do you have any future plans to introduce non-dairy milk into the coffee machines?
A: At the moment our thinking on it is not as baked as it probably should be, it comes down to the convenience factor for a customer. Our machines offer full-fat and low-fat milk, but to put a soy and almond or some other product in there, at the moment is more complication than our stores can cater. Then you’ve got to think about the way the machine is cleaned because the milk all comes out the same spout so you’ve got to make sure that someone who doesn’t want a dairy based product doesn’t get one. We’ve got to keep this simple for the time being.
Q: Is there any chance for 7-Eleven re-usable branded coffee cups following on from the recycling revolution?
A: Following the announcement of the partnership with Simply Cups in late 2017, we’ve been busy making sure we’re ready to go live. We’re now live so we’ve got 200 stores that have the recycling station, when you go into store you’ll see it flashing on digital screens, that’s part of the promotion. From where we are now, it’s about building the volume, you’ll see ads on tv and social media to bring this to life. But our first objective was to announce it, streamline to collect the waste, and the third part is to collect that waste and start shipping it off to country Victoria. Success will be that we have more than the 70million cups that we are being asked to recycle and getting other people on board is fundamental.
We thought about just doing 7-Eleven cups, which would be nice for us but the bigger message is here that we want to encourage other sellers of coffee to get behind this movement. So some big steps have been taken, we’re now in the process of making sure that message gets out – and then we’ve got 12 months of going hard to make sure we fulfil our part of the deal in terms of the 70 million that we want to take out.
And as we go through that process we’ll start to reassess does 200 become 300?
I’d like to believe that we’ll get on board with more community activities where people are wanting bins put in at their schools or universities, and are suggesting ways we can come more deeply penetrated into the community.
Q: How do you think the Australian convenience market is different to others around the world?
A: The convenience market buying in this country is so different. We spend a lot of time within the 7-Eleven network understanding the different offerings in each of the different geographies. We spend a lot of time touring different markets and different offerings. They’re like chalk and cheese, for example, mini-marts, what we offer here is completely different to any other geography that we see within any of the 7-Eleven network. So there is no comparison. But what we do find in each of those markets are things that are required or wanted by consumers here, but it’s not the entire offering, it’s a specific part of the offering. We look at the Japanese offering, it’s a fresh food offering and it’s spectacular. We look at the way they supply to their stores, and that’s the benchmark of supply for us, we look at the Scandinavian market around it’s fresh bakery and sandwich style offering and it is completely different to anything else we see in the world. We cherry-pick from other 7-Elevens and other competitors around the globe, but no one market is the same.
Q: Do you have a favourite Slurpee flavour?
A: I like the Lemon, Lime and Bitters and given I’m in a particular age bracket, I don’t mind the old Zilched as well! I like the Zilched because personally, I don’t think it tastes any different to any of the other products.