When it comes to dispensed beverages, customers are still looking for new and unique products that provide them with instant gratification.
By John Lofstock, Editor.
Dispensed cold and frozen beverages are proving to be not just popular year-round products—sales are strong and getting stronger as summer approaches—but excellent tools for driving traffic through promotions and by enhancing a chain’s brand image.
With margins from tobacco and fuel lagging, the frozen beverage segment has proven itself a top-performing surprise for many c-store operators. New products and flavors will drive any product category, but in the case of this category even old favorites pack the promotional punch to boost traffic and generate excitement.
Few convenience store operators have taken advantage of the promotability of frozen dispensed beverages as well as 7-Eleven Inc. Just a few months ago, for Veteran’s Day, 7-Eleven honored active, veteran and retired U.S. military personnel and their families with free, small Slurpee drinks over an eight-hour period. Accompanying family members also received a free beverage. Troops and their families stationed at nine military bases found so-called Slurpee-mobiles available to dispense beverages.
In March, 7-Eleven followed up its military promotion by using the iconic Slurpee brand to tap into college basketball’s March Madness with tournament “match-up cups.” Each contained a code that could be used to win prizes. Other recent Slurpee promotions have included The Simpsons, WWE SummerSlam and more.
Altoona, Pa.-based Sheetz Inc., on the other hand, has also used frozen dispensed beverages to generate sales, but focused a little more on adult consumers. Rather than featuring sports or kids programming, Sheetz designs its offerings to provide a c-store alternative to Starbucks and other coffeehouse concepts, with an emphasis on variety.
Its frozen lattes, mochas, “creamz” and fruit smoothies are available in a wide range of flavors that include banana, caramel, hazelnut, raspberry, wildberry, lemon, orange, vanilla, vanilla and chocolate cream, caramel and vanilla, strawberry-banana and caramel and hazelnut.
Tevis Energy’s four-store Jiffy Mart chain, based in Westminster, Md., offers everything from car washes and videos to Dairy Queen, Subway and Joe’s Café fast-food outlets. It was just over a year ago that the company switched from the frozen dispensed beverage it had been offering customers to a pair of products that have proven to be both highly popular and promotable: f’real milkshakes and Icee frozen beverages.
The results of the change have been dramatic, according to Tom Moser, general manager of convenience stores. “Since adding both Icee and f’real, our business in the frozen dispensed beverage category is up 18%, so it has helped significantly,” he said.
Why have the results been so marked? The answer probably lies both in the products themselves and their promotability. As Moser pointed out, “I think one of the big reasons is the Icee product is a carbonated product, so we’re able to get a lot more drinks per order. Also, I think it just produces a better product (than the previous offering it replaced).”
Jiffy Mart does a lot of in-store marketing, not just of its frozen dispensed drink selection, but its food, beverage and other offerings in general. Two of the locations also feature interactive pump screens. “Basically, as the customer is pumping gas, advertisements flash on what is about a 10-inch screen,” Moser said. “The customer can touch the ad he is interested in and generate a coupon for that specific item.”
In fact, Jiffy Mart is currently running promotions with its f’real drink line and has run promotions over the past several months with the Icee line. “The goal is just to let customers know we have these offerings in the store, and to get them from the pumps into the store to try these items,” Moser said.
Both frozen dispensed lines are priced to move, as well. The carbonated Icee drinks are available in three sizes: 16 ounces for $1.59; 24 ounces for $1.79; and 32 ounces for $1.99. The f’real milk shakes and smoothies retail for $2.89 for a 12- to 16-ounce cup, Moser said.
Produced by f’real Foods of Orinda, Calif., the serve-yourself product melds ice cream and frozen milk with an assortment of flavors. A trio of settings on the custom f’real blenders permits customers to choose thick, regular or thinner. “It’s quick and easy to use and a real value at under $3,” said Dwayne Cover, Jiffy Mart’s business manager.
Tevis executives saw the f’real products at a trade show and instantly recognized its potential. “It really grabbed our attention because it’s an eye appealing offering,” Moser said. “We saw some of our competitors locally bringing them in slowly, so we decided to bring them in as well.”
While frozen drinks obviously sell best in spring and summer, the difference in sales seasonally has been minimal. “Honestly, f’real picks up a little bit more in the summer, but it is pretty strong year round,” Moser said. “Icee also stays pretty consistent throughout the year.”
In fact, the company’s 18% climb in sales took place during the fall and winter months, which leaves the company optimistic that sales will continue to climb in the upcoming summer months, Moser said.
Another part of the product’s success was the store’s location. “A couple of our stores have a pair of high schools nearby,” said Cover. “That means we get a lot of foot traffic from those high school students, and I’m sure that helps.”
Another boost for frozen drink sales has been a promotion the chain calls Happy Hour, which it has done for the past two years. As part of the promotion, the company selects a four-hour window for one day and gives away free milkshakes. “It’s been really successful for us,” Moser said. “Not only do the customers love it, the promotion adds a lot of excitement to the store, and coming out of those events we see a significant lift in sales.”
While the dates for this year’s promotion have yet to be set, the promotions include print ads in the local newspapers, as well as in-store signage, gas pumps advertisements and digital marquee boards inside each store.
“We gave away 600 milkshakes at one of the stores last summer,” Moser reported. “Going into the event that store was probably doing 10 milkshakes a day. Coming out of the event we jumped to about 18 milkshakes per day. That pretty much holds true for the one we did the previous year, as well.”
Jiffy Mart’s practice when it rolls out a program is to give the associates a free coupon in order to spur trials, Moser explained. “This goes along way because it really creates a buzz with associates. Plus, by trying one, they can then tell the customers how it tastes.”
Other Jiff Mart promotions include a PepsiCo/Waste Management Recycle Dream Machine. After a customer recycles a bottle, he is offered a Jiffy Mart coupon for $1 off a f’real shake. The company is also using social media, specifically Facebook, to promote the dispensed category.