April 28, 2017
Whether it’s a modest combination deal or full promotional blowout, c-stores are finding the best methods to churn cold and frozen dispensed beverage sales.
A March 2016 survey by Mintel Group Ltd. showed that convenience store visitors want a wider variety of fresh food and beverages as part of their shopping experience.
As part of the report, 912 internet users aged 18 or older were asked: “Which of the following made-to-order or fresh foods/beverages have you purchased at convenience stores in the last three months,” 48% of respondents said fountain beverages, which was the top choice among food and beverage offerings.
Some years ago, the fountain category and the concept of fresh appeared contradictory. C-stores were known for a limited dispensed drink selection, with few promotions to push product. Frozen beverages often came out of a 7-Eleven Slurpee machine. However, convenience retailers today provide U.S. consumers a vast selection of cold and frozen dispensed beverages including fruit-infused slushes, milkshakes, iced coffees, novelty soft drinks and frozen beverage concoctions. The result is a category that continues to provide momentum when it comes to in-store sales.
EXTENDING FOODSERVICE SALES
C-store foodservice programs generated more than one-third of in-store gross-profit dollars in 2015, with cold and frozen dispensed beverage sales being key contributors, according to the National Association of Convenience Stores (NACS) 2015 State of the Industry report. By gross margin sales, cold beverages per store, per month grew to 50.86% in 2015. Frozen beverages weren’t that far behind with a gross margin percentage of 46.05%.
NACS’ preliminary State of the Industry report for 2016 will be out soon. When it is published, cold and frozen beverages will likely be strong performers again.
Arguably, the c-store channel has already earned the title as the cold dispensed beverage destination champ. Now, convenience retailers are adding some polish to the title in the form of new product offerings and flavorful deals to keep customers coming back—and not just to the cold vault.