This summer brought customers back to the cold and dispensed beverage section at c-stores, after the COVID-19 pandemic impacted the category in many areas of the country during 2020 and early 2021, from self-service bans to supply disruptions.
Many retailers used the disruption as an opportunity to re-evaluate their cold and frozen dispensed beverage section. With sales bouncing back, retailers are now looking for ways to drive the segment’s momentum beyond the summer season.
During the pandemic, fear of contamination put the kibosh on fountain drink sales at the 27 Nittany MiniMart stores in Pennsylvania. First, customers turned to prepackaged beverages, then they slowly began returning to the fountain but now want behind-the-counter service over dispensing their own beverage.
“I think that’s how it’s going to stay, at least for the foreseeable future,” said Angela Gearhart, the chain’s food service category manager.
In the meantime, MiniMart has continued working to build the category with new products and promotions. To kick off the summer season, the company replaced its slush machines with Frazil, which offers a wider variety of flavors beyond the basics. Especially well received by customers have been the limited-time offer (LTO) Bermuda Triangle (strawberry, banana and peach) and Rock and Roll (grape, blueberry and blue raspberry).
Iced coffee, which is exploding in popularity across the country, is also growing in sales at MiniMart stores, Gearhart said. Each store is equipped with a bag-in-box machine.
To incentivize sales, the stores tie in special deals such as buy so many, get one free or any-size fountain drink for 99 cents with a MinitRewards loyalty card. LTOs will also be rotated in to keep customer interest high, and there may also be some bundling opportunities with sandwiches, Gearhart noted.
Despite some challenges with product availability due to the pandemic, SunStop Convenience Stores and Markets, which has 80 locations in Alabama, Florida and Georgia, has continued to expand and update its dispensed cold and frozen beverage offerings, according to Michelle Weckstein, director of foodservice. In several of its Florida convenience stores, the company introduced Jarritos Freeze, a slushy variation of a favorite Mexican soda. Mandarin/Mandarina and Lime/Limon have been the most popular flavors.
In May, SunStop’s Icee and Fountain Club programs were rolled into the stores’ loyalty app. Once a customer purchases nine beverages, the 10th one is free. And a large fountain drink is 99 cents with any lunch or dinner LTO from the chain’s proprietary Eat’s Southern Cookin’ restaurants — an offer Weckstein said will continue through the fall.
All traditional coffee brewers, including those for iced coffee, are set to be replaced with bean-to-cup machines by the end of September. Each machine will make three different flavors of iced coffee.
Weckstein noted that SunStop will continue to invest back into the cold and frozen category with new fountain machines and nugget ice dispensers. The company is also testing frozen uncarbonated beverage machines in several locations as a potential replacement for its current frozen carbonated beverage offering.
Looking to Fall
Coming off a stellar summer of cold and frozen sales, Duchess Convenience Stores, with 119 locations in Ohio and one in West Virginia, is planning to keep “exciting new things” coming for the category as fall sets in, said Nathan Arnold, the company’s director of marketing.
Arnold said the company sees “a lot of potential for growth” in cold and frozen, especially for cold-brew coffee.
“National coffee chains are putting emphasis on cold brew in their advertising, so it makes sense for us to take advantage of this exposure,” Arnold explained. “Customers like it because it’s lower in acidity and high in caffeine, both of which they want year-round, so we are planning to rebrand and relaunch our iced as well as hot coffee in the coming months.”
The stores are expanding their cold and frozen equipment and testing new flavors and add-ins for the iced-coffee segment. They also plan to add new flavors to both the cold and frozen dispensed lineups, probably seasonal flavors or other LTOs.
“Limited-time offers are a big part of our marketing strategy in many of our categories because we’ve had great success with them over the years,” Arnold said.
He emphasized that, in addition to iced coffee, slushees are also spanning the seasons. Dispensed beverages are promoted in-store quite heavily including an ongoing “buy five drinks, get the sixth one free” program on Duchess’ Crown Card loyalty program.