thinking outside the cup

Over the past few years, many retailers haverevamped their food offerings. As those foodservicesgrow, so do the other categories that strongly supplement them, such as frozen beverages. However, some frozen beverage offerings are starting to become as elaborate—andas profitable—as the categories they were meant to complement.In other words, chains are finally starting to realize just how dominant and popular 7-Eleven’s Slurpee program has been for the pastfew decades.

Shaking Things Up

Sheetz Inc. is one of the frozen beverage believers. The Altoona,Pa. chain has taken advantage of what the frozen beverage category has to offer in terms of sales and drawing power. It has hada strong proprietary frozen carbonated beverage (FCB) programfor almost 10 years, which includes some Pepsi-branded flavors.Typically, stores have four to six dispensers that carry half proprietary and half Pepsi-branded flavors that are switched regularly.

“We consider ourselves a gas station that sells really good foodso we want a frozen beverage program that serves as a good complement to that,” said Bob Ferraro, cold beverage category managerfor the 330-store chain.

Even though Sheetz has only recently started measuring FCB asits own category (previously it was measured along with fountaindrinks), the chain has already noticed that the volume of the product shipped from its distribution warehouse has been impressive.

Along with the growing FCB category, Sheetz has also been taking advantage of a milkshake program, courtesy of f’REAL foods,for the past year.

“We decided to go with a milkshake program as a way to differentiate our frozen beverage offering to our customers,” saidFerraro.

The f’REAL system consists of two blenders that sit atop afreezer Sheetz places either on a front-end cap or in the middle ofits beverage line up. Each freezer is filled with individual cups ofpre-made, frozen milkshakes that the customer places into one ofthe blenders, which then unfreeze and mix the product to the customer’s desired thickness.

Sheetz borrowed some space from the FCB area to make roomfor the milkshakes after seeing how well they tested.

“The milkshakes definitely justified their space in the six storeswhere we tested them,” Ferraro recalled.

Sheetz has also made an impact in the frozen beverage categorywith its Sheetz Bros. Coffeez. The proprietary coffee bar in many locations offers a selection of frozen coffee drinks, such as mochas,lattes and smoothies.

Cold, Hard Profits
Waycross, Ga.-based Flash Foods, with 175-stores acrossGeorgia and Florida and more opening soon, reaps the benefits ofwarm temperatures when it comes to its FCB program.

“You can get great margins on basically any frozen beverages,whether they’re FCB or frozen noncarbonated beverages,” saidDustin Hudson, marketing category manager for Flash Foods inWaycross, Ga.

While the chain uses a small variety of FCB suppliers, it’sloyal to Parrot Ice for most of its frozen uncarbonated beverage—or “FUB” as Hudson jokingly calls it—needs. Parrot Ice uses realfruit and fruit juice in compact, easy-to-clean units. The low maintenance requirement and the quality of the product helps FlashFoods make an easy profit out of a service that can otherwise be alabor chore, according to Hudson.

“Frozen beverages programs can be tough to manage and maintain,” said Hudson, “but if you can find a way to make it simpleand easy, it pays off nicely.”

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