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ST. PAUL, Minn. -- CHS Inc., a energy and grain-based food company that operates Cenex convenience stores, formed a joint venture with Mountain Mudd Espresso, LLC, a company offering specialty coffee drive-thru kiosks in 22 states, to expand its branded coffee offerings to convenience stores. Financial terms were not disclosed as of press time.
Through the agreement, CHS will partner with Mudd's present owners, Brenda and Dennis Burkhartsmeier, who will continue to manage and operate the kiosk business. CHS will use the business as a franchisee at some of its convenience stores, as well as license it to other convenience stores and businesses such as shopping centers and parking lots for an additional form of revenue, Rick Cummings, director of marketing for CHS, told CSNews Online. "This is a partnership, we will keep driving on the model Mounatin Mudd has developed." He added: "We're trying to develop more of a franchise offering."
While the kiosks will be considered for CHS' Cenex convenience stores, this was "not the primary goal, although it is a definite segment," he continued. "We'll definitely try to bring it to the network, it could be a viable opportunity to bring in a profit center. We're not unlike any other c-store operators out there."
The kiosks will be offered to any convenience operator in the right location, Cummings noted, adding that in the convenience industry there is a lot of unused space on properties that could use another profit maker on site. Instead of a car wash, the Mountain Mudd kiosks can be put in for another business to lease out and generate more revenue for operators.
Current models of Mountain Mudd kiosks under licensees, investments vary in price from $85,000 to $110,000, Cummings told CSNews Online. "One of our goals is to fine tune that and find the right fit for the environment." Licensees man the store, or if the convenience operator desires, store employees can operate the kiosk. "It would be like a Taco Bell or something else in stores, operators can treat it as separate business," he said.
"Mountain Mudd is a marketable name, and they have an excellent product, whether is a latte, cappuccino or mocha. These two individuals [Brenda and Dennis Burkhartsmeier] are tremendously creative and dedicated to Mountain Mudd. As a large corporation, it's hard for us to capture that passion, it's appealing to partner with them and bring it to the next level," Cummings said.
The specialty coffee market is one of the fastest growing foodservice segments, projected to grow 7 percent annually, according to Brenda Burkhartsmeier, president of Mountain Mudd. "This joint venture with CHS will help us reach the rapidly growing drive-thru portion of the specialty coffee market," she said.
Mountain Mudd Espresso began 13 years ago and operates more than 70 branded coffee kiosks.