Summer c-store promotions are more effective than ever when it comes to pumping up frozen beverage sales.
When DC Oil Co. opened its newest Quick Shop convenience store in late July, David Collins knew customers expected to find an ICEE machine prominently displayed on the premise and they expected it to be filled with Coca-Cola, cherry and blue raspberry slush mixtures.
“In Alabama, ICEE is such a dominant name—we have ICEE machines in all our stores—and we always try to keep those top three flavors,” said Collins, president of the Birmingham, Ala.,-based chain, which operates 13 sites throughout the Yellowhammer State. “When we have a fourth barrel, we play with the flavor to see what does best.”
For this specific location, Collins selected Orange Dream as the fourth option.
“It’s doing fantastic,” he said. “I’m really pleased with how well it’s done for us.”
The Quick Shop team determined the iconic beverage brand should be featured prominently in the store’s grand-opening promotional campaign. For the month of August, customers to this location could purchase any size ICEE—12-, 20- or 32- ounces—all for just 99 cents.
“It helps that our distributor gave us free syrup and cups, because unless you have free products, it’s hard to do that type of promotion when a 32-ounce ICEE can sell for $1.79,” said Collins. “We’ll go back to the regular prices in September.”
More and more, convenience retailers are taking advantage of the traffic- and profit-driving value of frozen dispensed beverages, prompting them to widen flavor assortments in traditional carbonated and non-carbonated products. Summer has always been the biggest season for the frozen beverage segment, which is partially due to the climbing heat index and partly to special promotions.
Some retailers have built special annual promotions on frozen beverages. For instance, each July 11, 7-Eleven celebrates its anniversary with a free Slurpee offer between 11 a.m.-7 p.m.
This year, participating 7-Eleven stores also marked the “National Stick Out Your Tongue Day” on July 19 with Slurpee tongue straws in four shapes and colors. Customers were encouraged to post pictures of their colorful tongues on social media for a chance to win a year’s worth of free Slurpee drinks, or one medium size per day for 365 days (approximately $550 value) in the Sun’s Out-Tongue’s Out Sweepstakes.
However 7-Eleven wasn’t the only national c-store chain to shine a spotlight on carbonated and non-carbonated frozen beverages this summer. Circle K preempted its competitor with a free Froster offer on July 10, advertising the event with the slogan: “First in refreshment. First in flavors. First in the hearts of frozen beverage lovers everywhere.” Circle K estimated 10,000 frozen carbonated drinks would be served up in the U.S. to people who downloaded the retailer’s coupon in its mobile app.
Regional c-stores offered their own promotions to entice people to cool off from summer temperatures. The Cumberland Farms convenience chain, for example, sold Hyperfreeze drinks for 69 cents through Labor Day.
RaceTrac, a c-store chain with nearly 500 stores throughout Georgia, Florida, Louisiana and Texas, recently debuted a new mobile app campaign featuring the Wintastic Rewards game.
“When a guest purchases a qualifying beverage or food item, they scan their app for a one-in-three chance to instantly win dozens of deals on drinks and food items,” said Tiffany Plemmons, senior category manager for RaceTrac, headquartered in Atlanta. “This was a great promotion to entice our guests to continue their loyal behavior and make RaceTrac their destination this summer.”
The company also teamed up with the Atlanta Braves to highlight the addition of ICEE’s Fanta Green Apple flavor. The sports organization promoted the product and c-stores on its social media and ad platforms.
“It immediately became a hit. We were excited to see the lift in buzz at our stores,” said Plemmons.
COLD AND HOT
Price discounts are an oft-employed strategy to attract attention to any category.
Introducing new flavors is another way to entice shoppers, especially with such a small category as frozen beverages. However, identifying the next big seller can be a game of hit-or-miss.
“It’s funny how some flavors sell really well at some stores, and five miles down the road, you can’t sell them at all,” Collins said.
That said, there are certain industry staples, such as cherry and blue raspberry. Indeed, according to Mintel research, consumers’ cherry favoritism continues to grow. It is one of the strongest performers on the Mintel Menu Matrix. Other leading flavors also include lemonade and citrus, and Mintel named orange as an expanding flavor. Only strawberry was recognized as lagging or declining in penetration.
Frozen blended coffee drinks continue to be popular—both McDonald’s and Dunkin’ Donuts have expanded their category selections. For coffee-based beverages, frozen and otherwise, Mintel called out French vanilla, hazelnut and mocha as leading flavors.
However, combining various flavor profiles is one of the most notable trends in beverages at the moment. More specifically, savory beverages coupled with sweet are set to become the next beverage breakthrough. This could be an appeal to Millennials and Generation Z because of their penchant to experiment with tastes. When that’s applied to frozen beverages, you see offerings like ICEE’s Warhead’s pairings of strawberry basil or blackberry mint limeade. This brand also heats things up with its Hotheads products: lava, piping hot pineapple and molten mango.
The company also plays to people’s caffeine cravings with its new Twisted Chill blends. At the 2017 National Association of Convenience Stores (NACS) show, ICEE debuted the Twisted Chill machine, which mixes flavor infusions with a base in a single serving. Flavor options include pumpkin spice coffee, nitro cold brew and sweet tea. In addition, ICEE introduced a frozen nitro dispensing machine this year, offering mocha, vanilla, hazelnut and Irish cream choices.
To keep heat on in the category, Sunny Sky Products LLC, manufacturer of Jolly Rancher Slushies, has spiced up its flavor game by releasing the Hotties line, which plays to the spicy-sweet palette with cherry habanero, watermelon cayenne, blue raspberry Siracha and green apple ginger.
But analysts caution against conflating Millennials and Gen Z into one mass consumer group. Research indicates discovering the Gen Z demographic, born between 1995 and 2015, doesn’t attach as much credence to smaller, boutique brands as Millennials tend to do. Rather, their food and beverage purchases are more akin to personal experiences.
“Food marketers should understand that [Gen Z] grew up knowing that food is much more than sustenance; food represents culture and therefore is an expression of who they are,” NPD’s David Portalatin told Modern Restaurant Management recently.
In fact, you see the correlation between childhood expressions or sentiments and frozen beverages reflected in certain flavor promotions. For this year’s anniversary, 7-Eleven re-issued its Cap’n Crunch’s Crunch Berries cereal Slurpee. In spring, Circle K announced its partnership with PepsiCo/Frito-Lay’s Cheetos to sell a limited edition Sweetos Cinnamon Sugar Froster.
“Our biggest volume for frozen beverages is definitely kids trying to talk their moms into buying an ICEE, but then their moms buy one, too,” said Collins.
While September may still bring summer-like weather to some regions, maintaining the same level of excitement toward frozen drinks that are on display between Memorial Day and Labor Day can be challenging. Autumn means temperatures fall and people’s pumpkin spice obsession kicks into high gear. Consumers are more likely to reach for a hot beverage than a chilled slush or shake.
Perhaps the key to keeping the category flowing isn’t necessarily to position it as a competitor to hot drinks, but rather to keep customers on their toes through flavor rotations and year-round price incentives. At least that’s the strategy Plemmons is adopting.
“[We’ve] had a big summer full of promotions and exciting product offerings, and we are
actively looking at ways we can continue to promote the category outside of the traditional selling season,” Plemmons said. “We’re looking at new flavors and app coupons to continue to drive traffic and trial to frozen beverages.”
California Dissolves Sugary Drink Tax
California lawmakers this summer approved a bill that prevents local communities in the state from adopting any new sugar-sweetened beverage (SSB) taxes on groceries for the next 12 years.
The measure is retroactive to Jan. 1, 2018 and would continue until the year 2031.
The law preempts grocery tax proposals targeting SSBs that were under consideration in the California cities of Sacramento, Santa Cruz and Richmond.
The “Keep Groceries Affordable Act of 2018” (Bill 1838) was a last-minute measure that overturned a state ballot measure, slated for a November vote. The ballot proposed that local jurisdictions seeking to raise taxes would require a two-thirds vote instead of the 50% threshold currently in place.