Frozen Beverages Offer Year-Round Profits
By Angela Altass
Cold and frozen beverages play an important role in the success of foodservice programs at convenience stores.
Foodservice is the largest growing category in the convenience store market and cold beverages are a large part pf that offering, says Chris Midbo, sales, marketing and new business development, Western Refrigeration, adding that fountain drink and frozen carbonated beverage (FCB) slush are important to the profitability and success of any c-store foodservice offering.
“Both fountain and slush offer a much higher profit margin in comparison to packaged or bottled beverages,” says Midbo, noting that stores can easily tie dispensed beverages into food combo offerings, such as a sandwich, chips and drink combination. “The lower costing of the dispensed drink allows the combo price to be a lower, more attractive offer while still maintaining a higher profit margin.”
There are a variety of options available to choose from in the cold or frozen beverage equipment market and working with the right supplier can be a deciding factor.
“When making an equipment decision, make sure the equipment can be supported long term, says Midbo. “At Western Refrigeration, we make sure the equipment we supply is fully supported. We hold national service classes for our service providers to ensure our equipment in the field can be supported and has longevity. This includes parts supply and preventative maintenance programs. We also offer delivery, installation and training for the systems we supply, including the backroom syrup supply system.”
The biggest change to take place in cold or frozen beverage equipment over the years involves the different types of units available, says Midbo.
“In FCB slush, we can offer combinations of two, three, and four flavour units; floor or countertop,” says Midbo. “With the new designs, the bag in box (BIB) syrups can be placed in the stand the unit sits on, freeing up backroom storage space and long syrup line runs.”
Slush units are now designed to minimize maintenance and power, says Midbo.
“The units no longer have belts or pulleys and are all front serviceable,” states Midbo. “The slush units are sealed so less cleaning is required. Cleaning is only needed twice a year. The power requirement has also been decreased from 50 amps to 30 amps, which lowers energy costs. As for the fountain units, there are many flavour options and sizes so we can really fit the location’s space well. There are six, eight, 10, 12 and up flavour options as well as the ability to offer many flavour options from a very small footprint. The dispensing valves are also much better in maintaining a proper product quality with less maintenance required.”
Nitro coffee, a cold coffee brew infused with nitrogen, is one of the newest trends in cold drinks, says Midbo.
“Nitro coffee has a phenomenal and lingering aftertaste,” states Midbo. “It makes your beverage frothy, which gives the perception of a sweet beverage without sugar being added. The nitrogen gas, which is colourless and odourless, hits different places of your tongue, bringing out all the flavours.”
Historically, convenience stores have been big purveyors of cold and frozen beverages, especially in Canada, notes Jim Jackson, president, Adept Food and Beverage.
“They sell more Slurpees at 7-Eleven in Winnipeg in January than they sell in sunny California in the summer,” says Jackson. “None of us have ever been able to figure out why frozen beverages work so well, particularly in Western Canada, year-round. The popularity of certain types of beverages has ebbed and flowed over the years but the constant has been a regular demand for these types of frozen beverages.”
Frozen carbonated (FCB) and frozen uncarbonated (FUB) beverages often get lumped together as slush, notes Jackson.
“From our perspective, FCB is a product on its own,” says Jackson. “Slurpee, from 7-Eleven, is a brand that most consumers would recognize. The only other competing brand on the FUB side would be SLUSH PUPPiE. Most of the chain convenience stores promote their own brands. Even with some of our products, nobody knows they’re our products because they’re called by whatever the chain is calling them.”
However, frozen beverages are an impulse purchase and Jackson doesn’t think brand recognition is a key factor.
“I believe that if a mom pulls up at a gas bar with her child and the child wants a slushie drink and it’s available inside, she’s going in to get it, no matter what brand it is,” says Jackson. “It is largely impulse and as long as the equipment is operating and it’s clean, that’s about the best that you can do for that offering. The machines need to be full and they need to be clean. I have never been convinced that more than that is necessary. If you keep the equipment clean and make sure the supplies are in place and you are paying attention to the machine over the course of the day, then that’s the baseline.”
Ice cappuccino beverages continue to be a strong offer but should be segregated from FCB slushie offerings, states Jackson.
“We’ve always called iced cappuccinos and smoothies the adult offer, while the FCB or bright coloured slush is the children’s offer,” says Jackson. “We have always suggested that adult offers be physically situated near the coffee offer in the store. Operationally, it’s easier to control cups if they are separate from the slush offer because the per ounce cost on the adult offers are significantly higher than they are for the slush items. You don’t want someone getting a 32-ounce cup from the FCB side and filling it with iced cappuccino.”
Adept Food and Beverage launched smoodi, a robotic smart blender that creates natural, vegan smoothies with no sugar added, during the recent Restaurant Canada show in Toronto, Ontario.
“We are excited about smoodi because it is a higher end alternative to what already exists out there,” says Jackson. “For us, smoodi is the answer to the interest and demand for better-for-you products as smoodi says they are encouraging healthier habits and better nutrition. We think this offer is going to have a strong place in Canada. How strong a place in convenience in this country is still up in the air as it’s not an inexpensive offer but certainly in the United States they are busy putting smoodi machines into convenience locations. We expect there will be some convenience distribution in Canada but it will also be in universities, airports and other places like that.”
As the first automatic, self-serving and healthy smoothie store in a box, smoodi is leveraging the power of automation and robotics to empower healthy habits, allowing convenience stores to offer 100 per cent natural smoothies at an affordable price that requires zero labour or maintenance, says Adam Sandler, chief revenue officer, smoodi.
With or without carbonation, frozen beverages can add to a store’s profits year-round by providing refreshment to customers of all ages.
“If you don’t have any frozen beverage offerings in your store, you are missing out and you are potentially not as convenient for your customers as you might otherwise be,” notes Jackson.