Strong Growth for
VERYONE AGREES THAT FROZEN beverage sales are
strong and the outlook for the category remains extremely positive for the next few years.
For 2012, the NACS State of the Industry report found that convenience stores, on average, tallied $900 in frozen beverage sales per month for the year with a dollar margin of $472. The category had a gross margin of 52.54%
But the convenience store operators who are cashing in the most—and not only during the warm weather months— are the ones who combine new and exciting flavors with popular promotions, good equipment maintenance, a strong foodservice offering and a savvy understanding of social media.
Casey's General Stores Inc. in Ankeny, Iowa, and Dallasbased 7-Eleven are two chains that are leading the way.
Casey's extensive foodservice program offers a natural boost to its frozen beverage program. "We offer promotional prices on a couple of slices of pizza or a made-to-order sandwich with our frozen and fountain drinks," said Darryl
Bacon, the chain's vice president of foodservice. "We even let the customer choose which beverage they want so they can always have something different."
Pricing varies on the particular combo. For example, a six-inch made-to-order sub, frozen drink and cookie starts at about $5. All dispensed beverages are marketed under the Casey's brand. Frozen drinks are available in 16- and
24-oimce sizes ranging from $1.09 to $2.69. The chain also markets cold and frozen coffees and cappuccinos in mocha and French Vanillaflavorsin 12- and 16-ounce sizes. Those range in price from $1.29 to $1.99.
The beverage program, like with Casey's extensive foodservice program, is backed by outdoor signage and in-store point-of-sale materials.
"It's not in all of our stores, so we can't do a global marketing campaign on it," said Kelli Reinhart, Casey's foodservice buyer. "But as we get the word out there a little more, we will be able to do more of a global marketing campaign with it."
Frozen dispensed beverages are currently available in
600 of the chain's 1,740 stores. The chain is committed to adding frozen to as many stores as possible over the next two years.
"The main plan right now is that we are putting frozen machines in all new stores and all acquisitions where we remodel the store," Bacon said. "We've been under a major remodel program for the past three years. Those come first, and then we pick and choose the different areas."
FINDING THE RIGHT FIT
Reinhart continues to receive requests from store managers throughout its eight-state marketing area. "I would say that we are averaging adding machines to about 150 locations a year."
While successful, frozen appeal does have its limits.
"There are some locations where it's just
"This is the first time 7-Eleven has celnot a good fit," Bacon said. "We have ebrated Memorial Day weekend with found that our northern states do not a special offer on Slurpee all weekend do as well as our southern states. When long," said Laura Gordon, 7-Eleven vice you get up into Minnesota and North president of brand innovation.
Dakota—where it's cold nine months out
To further entice customers, conof the year—it just doesn't do as well." sumers who download 7-Eleven's
Where it is a good fit. Reinhart said smartphone app, available via the App frozen programs require strict attention
Store or Google Play, can take advanto detail so the program doesn't stagnate. tage of #Awesummer mobile coupons
"Each store has to rotateflavorsand keep for free and learn about value offers all it interesting for the consumer," she said. summer long. Each week through Labor
"Make sure each individual store has
Day, exclusive coupons for a variety of a good service program in place on the items—free Slurpee drinks and Snickers machines as well so if anything breaks
Ice Cream Bars, as well as other special down you can have it repaired quickly."