Innovation Drives Frozen Sales

 
TOP PERFORMERS
  • Coca-Cola Co.
  • PepsiCo
  • ICEE (J&J Snack Foods)

HONORABLE MENTIONS

  • F’Real! Foods
  • Dr Pepper (Dr Pepper Snapple Group)
  • Slush Puppie (J&J Snack Foods)

It’s little surprise that The Coca-Cola Co. and PepsiCo were ranked as top performers in the dispensed cold beverages category, but innovators like J&J Snack Foods and F’Real! are certainly shaking things up, too. 

J&J’s iconic ICEE and Slush Puppie brands are teeming with literally dozens of flavors, while F’Real! has introduced seasonal milkshake flavors like mint chip, banana and eggnog to complement its five year-round flavors, which include vanilla, chocolate, strawberry, chocolate malt and cookies ‘n cream.

Retailers aren’t shy about stressing the importance of keeping this category fresh, as dispensed cold beverage concepts are increasingly becoming in-store profit centers unto themselves.

When done right, that is. Indiana retailer Ricker’s convenience stores has turned its dispensed beverage program, Ricker’s Pop, into a regional favorite that offers up to 34 fountain heads per store, while retailers like Delta Sonic and Spinx Co. have created impressive fountain-drink followings with their carefully constructed programs.

With packaged beverages on the prowl for their share of consumersw, retailers have found one indisputable certainty to the dispensed cold beverage category: Quantity is king.

“I think there are so many options in cold dollars now that fountains with five or six flavors just can’t compete, so they have to be innovative,” said Eric Huppert, president of Spring Valley, Wis.-based Team Oil Co. “The cooler these days has dozens and dozens of choices.”

Retailers are floating new concepts to boost sales in this category, even going so far as mixing energy drinks into frozen dispensed beverages. Equipment manufacturers, too, are joining the fray, offering retailers new options in cross-marketing with solutions like high-definition screens affixed to dispensers. 

Opportunities Abound
But there’s always room for innovation and growth.

7-Eleven Inc. continues to be a leading innovator in the frozen dispensed segment. The chain that created the category drives its Slurpee business with innovative flavors, sugar-free products and grassroots marketing. Throughout 2008, the Dallas chain hawked frozen beverages around mega movie promotions, such as The Incredible Hulk and Iron Man.

Campaigns featured 3-D fountain and Slurpee cups, collectable, refillable mugs and cross-promotion discounts with sandwiches and bakery items. “The Incredible Hulk is one of Marvel Comics’ all-time favorite Super Heroes,” said Jay Wilkins, 7-Eleven brand manager for Slurpee and fountain drinks. “With our collectible cups and straws, online contests and in-store promotions, 7-Eleven has become a Super Hero store for young fans of the genre.”

Of the 80 key decision makers who participated in the Dispensed Beverages: Cold segment of the 2009 CSD Brand Preference Study, only 5% said they’d been contacted by five or more companies in the last 60 days.

About of one-fourth of the respondents said they’d been contacted by three or four suppliers, while slightly fewer (24%) said they hadn’t been contacted by a single supplier in that time frame. Notably, almost half the respondents (45%) said they were only contacted by one or two companies.

Top performers were identified as The Coca-Cola Co., PepsiCo and ICEE, which is a division of J&J Snack Foods. Also identified as honorable mentions was F’Real! Foods, Dr Pepper (Dr Pepper Snapple Group) and another J&J Snack Foods brand: Slush Puppie.

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