C-store operators are reporting increases in overall sales, with cold and frozen dispensed beverage demand among the factors influencing the surge as thirsty customers flock to stores.
In fact, c-store operators are currently faring much better than retailers overall, noted Mike Kostyo, associate director and trendologist at market research firm Datassential.
“Nearly half — or 47% — of c-store operators say their business has recovered to pre-pandemic levels, while a whopping 40% say their business is back in growth mode and exceeding pre-pandemic levels according to our July ‘Foodservice Pro Check-In Report,’” Kostyo noted, adding 80% of c-store operators were optimistic traffic would increase in the near future.
C-store retailers confirm the trend.
With 124 stores in five states, Huck’s Market sales are “up nicely on a same-store basis,” said Dave Grimes, vice president, foodservice for Huck’s Market. He sees customer traffic coming back as well as revived interest in the dispensed segment.
“Some is migration back to dispensed beverage from the cold vault as the price gap widens and people are less sensitive to COVID-19 as they may have felt packaged beverage was the safe alternative in the COVID environment,” Grimes noted.
“Changing consumer habits have shifted daypart consumption, while frozen beverages continue to see new innovations and flavors to drive growth within the category,” he added.
Refreshed and new flavor and drink options continue to boost sales at FriendShip’s 29 Ohio stores, Kaverman said.
“Customers continue to look for new and healthier options as they shop, while also reaching for old favorites,” he added.
FriendShip partnered with Freezing Point at the beginning of the year and in March introduced Frazil to FriendShip customers, installing more than 40 Frazil drink machines to replace existing frozen beverage equipment, with plans to expand to 52 machines throughout 21 locations.
“The fresh fruit flavors and refreshing offerings from Frazil are driving a large double-digit growth in frozen drink sales year over year,” said Kaverman. “Continued promotions bundling FriendShip Kitchen’s fresh, hand-breaded, FriendShip Famous Chicken tenders with a fountain beverage of choice continue to show strong customer demand and provide growth year over year.”
Sales also are up at The PRIDE Stores, with 15 sites in the Chicagoland area and one in Indiana, noted Nicolette Jaeger, director of merchandising and loyalty for The PRIDE Stores.
“We strive for creating an offer that separates us from our competition and exceeds our customers’ expectations,” Jaeger said. “We have implemented draught stations at multiple locations, which dispense nitro, cold brew, iced tea and hand-crafted sodas.”
Fountain is aggressively featured on Huck’s Market’s loyalty app, noted Grimes, adding the loyalty price on a 30-ounce drink is 79 cents every day.
The company offers a free fountain beverage corresponding to various “holidays” such as National Friendship Day.
“We ran a ‘buy one, get one free’ to give the second one to a friend,” said Grimes. “We try to find clever ways to connect promotional activity to the various national holidays out there.”
Huck’s Market also pairs fountain drinks with food items, offering loyalty-only deals such as ‘buy a hot dog, get a free fountain beverage,’ said Grimes.
“We are also experimenting with Fresh Blends and have expanded frozen carbonated beverage offerings at new and remodeled stores,” he added. “We added a couple of different Mountain Dew varieties to fountain.”
According to Datassential’s “C-Store Foodservice Keynote Report,” as of last year, about a third of c-store operators said fountain soda sales were increasing, while 53% said sales stayed the same.
- Twenty-one percent reported increasing fountain juice and lemonade sales, with 64% saying they stayed the same.
- Twenty-one percent reported increasing slushies or frozen drink sales, with 68% saying they stayed the same.
- Fifteen percent reported increasing fountain iced tea sales, and 67% indicated they stayed the same.
“C-Stores were always going to fare better as consumers started getting back to their normal routines,” Kostyo said. “It helps that c-stores have done such a good job modernizing their foodservice programs, with consumers giving the segment higher marks every year. While there are certainly some issues that the segment is dealing with — from labor shortages to high gas prices — it may also benefit from consumers looking for more fill-in trips in the future as they cut back on supermarket and restaurant visitation frequency.”
Opportunities also exist for c-store retailers to better appeal to dispensed beverage customers. According to the “C-Store Foodservice Keynote Report,” 63% of consumers are interested in pricing multiple sizes of an option at the same price, yet only 24% of c-store operators offer the option, Kostyo pointed out.
“We often see this type of offering in relation to fountain beverages where a small, medium and large are all the same price,” he said. “With prices rising, that type of deal resonates with c-store consumers. There has been a lot of innovation in the beverage category in recent years. C-stores have to stay on top of it.”
As for beverage flavor trends and preferences, Jaeger noted The PRIDE Stores’ most popular hand-crafted soda flavors are watermelon and pineapple.
At Huck’s Market, banana and Tiger’s blood have done well, said Grimes.
Current frozen drink flavor trends for FriendShip include time-tested favorites such as cherry and blue raspberry with customers seeking fresh new flavors such as peach and root beer float, noted Kaverman.
Kostyo pointed out exclusive flavors, functional beverages, globally inspired options such as aguas frescas, iced coffee, seasonal offerings and customization are all key to keeping a dispensed beverage program on trend and exciting to consumers.