Summer is a great time for c-store offerings—few of which are more refreshing and profitable than fountain drinks.
By Jim Callahan
Have you noticed all the beverage specials that bubble to the surface at convenience stores, and other retail establishments, during this time of the year?
Summer weather is a natural fuel for the sale of every type and size of water, sports drink, energy drink, iced coffee, tea, juice and plethora of soft drink brands. Of course, if you look beyond all those bottles, cans and cartons, there’s another all-time traffic builder and destination maker: fountain drinks.
Fountain is a unique segment. Not only are dispensed beverages a category that generates high profit margins, fountain offerings can be tailored—through attractive pricing and marketing—to target and capture a slew of different customers.
Among the various types of patrons enticed by a robust fountain drink program are construction crews, sports teams, summer academies, local workers, etc. If individuals are coming in to gas up or buy a sandwich, don’t allow any of these customers to finalize their purchase without suggestive selling them on an ice cold drink for the road.
However, if you don’t offer a fountain program currently, get with your suppliers because they will be only too happy to provide you guidance and inform you of specials. If you don’t already have a rebate program in place, talk to your suppliers and have them set one up for you.
You don’t need to be the size of RaceTrac, Wawa, Sheetz, QuikTrip or 7-Eleven to have your own program and it’s never too late to start one for this summer. Contact your fountain representative and find out some basics, including if you can get some help via a BIB (bag-in-box) packaging price concession as well as information about rebates and discounts on the price of cups and other materials.
Of course, cups are a necessity, as is deciding on cup sizes, whether it’s 24-, 32-, 48-ounces or larger. I’ve always liked the 32-ounce size because the consumer gets a drink that is enough to be a thirst quencher, easy to handle in a vehicle and will likely be consumed before the ice melts and they’re left with something watered down. I also recommend a big barreled straw similar to what McDonald’s uses as consumers will be hydrated faster and be ready for another drink when they want it.
Once the materials are in place, figure out a margin that you can live with. Your No. 1 goal is to get these valuable customers into your store, where they might be tempted with a candy, cookie, ice cream or other snack purchase once they obtain their fountain drink.
Likely, you have surveyed what fountain promotions your competitors are offering and while you certainly will want to take a competitor’s pricing into the equation, don’t undercut your margin by offering fountain drinks too cheaply. Instead, use reader boards or point-of-promotion signage that will direct customers to your location versus a competitor that offers pricing that’s maybe more enticing.
When figuring out your margin, make sure that you consult with your fountain sales representatives for the current figures on how many ounces of beverage actually fit into the cup size you choose to market; this is a significant consideration and reduces your cost accordingly. Your reps will know this.
Having said that, by the time you include the cost of the syrup, cup, lid, ice, straw and a couple of napkins, heady marketing will allow you to present your customers with a very attractive, warm weather offering at an attractive price.
To emphasize and promote your summer fountain drink deal, make sure you encourage your sales associates with what you are trying to accomplish, have signs at the entrance and checkout and cross promote the special throughout the store.
Years ago, some people I worked with giggled a bit when I first started placing point-of-promotion signage in the restrooms, eye high to the urinals. Still, you must realize and take advantage of this “captive” moment as they have no other option than to observe it and hopefully act accordingly.
The point is that if you grab the consumer’s interest, in-store sales often follow. Now, that’s a refreshing prospect.
Jim Callahan has more than 40 years of experience as a convenience store and petroleum marketer. His Convenience Store Solutions blog appears regularly on CSDecisions.com. He can be reached at (678)485-4773 or via e-mail at [email protected].