Dispensed cold and frozen carbonated beverages (FCB) accounted for $294 million at the 69 chains responding to CSD’s Brand Preference Study. Respondents operate a total of 10,350 stores and average category sales of $28,406 per store.
Pepsi and Coke head the list retailers reported. Pepsi (33%) slipped past Coke (32%) for having the most effective sales program. ICEE and Slush Puppie, both operated by J&J Snack Foods and Dr Pepper and 7-Up, two Cadbury Schweppes’ brands, also scored high with respondents.
What’s more important, the study found, is that retailers are hungry for category information. Just 9% of retailers said they had been visited by more than five companies in the past 60 days. Eleven category buyers (16%) reported no sales presentations from cold or frozen dispensed beverage suppliers in the last two months.
There is a growing emphasis on the cold and frozen dispensed category as retailers expand other areas of the store. Over the past few years, many chains have revamped their food offerings. As those foodservices grow, so do the other categories that supplement them, such as frozen beverages. However, some frozen beverage offerings are starting to become as elaborate—and as 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 past few decades.
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 had a strong proprietary frozen carbonated beverage (FCB) program for 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 food so we want a frozen beverage program that serves as a good complement to that," said Bob Ferraro, cold beverage category manager for the 330-store chain.
Even though Sheetz has only recently started measuring FCB as its own category (previously it was measured along with fountain drinks), the chain has already noticed that the volume of the product shipped from its distribution warehouse has been impressive.
Sheetz has also made an impact in the frozen beverage category with its Sheetz Bros. Coffeez. The proprietary coffee bar in many locations offers a selection of frozen coffee drinks, such as mochas, lattes and smoothies.
Waycross, Ga.-based Flash Foods, with 175-stores across Georgia and Florida and more opening soon, reaps the benefits of warm 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," said Dustin Hudson, marketing category manager for Flash Foods in Waycross, Ga.
"Frozen beverages programs can be tough to manage and maintain," said Hudson, "but if you can find a way to make it simple and easy, it pays off nicely."
For its part, 7-Eleven, who is credited with creating the frozen dispensed segment, continues to drive innovation with new flavors, products and promotions. In 2007, as part of its Slurpee promotion to celebrate The Simpsons Movie premiere, the company sold more than a million commemorative Simpsons Slurpee cups in just two weeks. 7-Eleven plans to continue introducing new flavors and movie promotions throughout 2008.