Freezing Out the Competition

Establishing an effective frozen beverage offering helps drive customers across all demographics.

Megan Wilkinson, Assistant Editor.

Frozen beverages have been helping convenience store operators create stronger relationships with younger consumers, but there is an opportunity in this category with all age groups.

According to Mintel’s 2012 Convenience Store Foodservice report, frozen beverages ranked as the third most frequently ordered foodservice items in c-stores, so it’s important to focus on the growth and trends they offer. About 61% of all 2,000 consumers surveyed by Mintel said they purchased a slushie or frozen beverage from a convenience store at some point in their lives.

Frozen beverages are particularly well-accepted among younger generations of consumers. The bulk of frozen beverage fans are in the 18- to 24-year-old age group, as 82% of the 363 people surveyed in this category reported they have purchased a frozen beverage from a c-store.

Among older age groups, frozen beverages are not as popular, as only between 50-72% of the people surveyed in the 25-years-old and up groups reported purchasing a frozen beverage from a c-store.

Cumberland Farms understands that the frozen beverage products appeal more widely among younger consumers for their sweet taste and low prices. The company has learned to thrive and succeed off the sale of its frozen beverages to increase in-store purchases.

“I would say this type of program appeals more to a younger audience,” said Gwen Forman, vice president of marketing for Cumberland Farms Inc. “But it is extremely important to engage customers across all demographics when it comes to a store’s frozen beverage program.”

The New England chain launched its Chill Zone beverage program about 10 years ago in Hyannis, Mass., near Cape Cod. The program has rolled out to 500 of its nearly 600 locations.

While the Chill Zone encompasses both fountain and frozen drinks, locals who frequent the c-store typically come for its unique frozen beverage options. The company, known as an innovator when it comes to flavor profiles, offers 13 different varieties of frozen beverage slushies, each with unforgettable names such as Red Rage (cherry), Berry Backlash (blue raspberry) or Sour Apple Shock (sour apple).

Effective Marketing
To take its offering one step further, each frozen beverage has its own animated mascot to match its name.    

“The characters are an interesting phenomenon,” Forman said. “We wanted to bring these flavor brands alive, so we created funky names and characters to match best for the audience. Most frozen beverage consumers are young, which is why we chose cartoon characters for them.”

The Cumberland Farms characters are featured on store signs and at opening events. Besides, Forman argued, which would consumers rather see at an opening event: a man in a generic strawberry suit, or a man in a monkey suit to match the Monkey Freeze flavor? Forman said the latter is more appealing.

The company promotes its frozen beverages heavily through social media such as Facebook and Twitter to let customers know about any events or news behind them. Forman said this is critical for c-stores to reach out to the younger groups.

“Using the social media our younger consumers are actively engaged in is really important,” she said. “It’s not just for broadcast TV, it’s for mobile media and marketing directly to the social media sites where our target customers are spending most of their time. It’s also more economic that way. Frozen beverages can be a pretty inexpensive product to market if you choose the right channels.”

The company doesn’t just sell typical cherry and blue raspberry flavors, either. Although the traditional flavors are important, Cumberland Farms leverages customer input to create new flavor profiles and to solicit suggestions for what new flavors they would like to see on the menu. Two unique drinks added to the menu include NRG Kick, a frozen beverage that also acts as an energy drink for young adults, and Cotton Candy Commander, a cotton candy flavor that appeals most to kids.    

Forman said the frozen beverage category is increasing in sales at c-stores across the industry because of the category’s ability to connect with customers on a personal level and its relatively low price point. At Cumberland stores, Chill Zone frozen beverages range in price from 89-99 cents for any size.

“It’s a traffic driver,” Forman said. “We’re doing great at Chill Zone, and I think it’s an affordable beverage for a tough economy.”
Forman credited 7-Eleven’s Slurpee for popularizing the frozen beverage segment. The iconic Slurpee has become such a slice of Americana that it has its own free day every year—July 11 or 7/11—where people flock to 7-Eleven stores to get a free frozen beverage.

The free product promotions have their appeal and keep the category energized. Forman believes this trend has been successful at Cumberland Farms, as well, as hundreds of customers visit Cumberland stores during its annual ‘free day’ promotions.

“For years, we’ve offered a free day to customers,” Forman said. “They can come in and have a free Chill Zone on us. We really pushed it three years ago when we launched the Chill Zone Facebook page. It really works nicely.”

Product Assortment
New products—specifically f’Real’s frozen milkshake—and sweeteners have also helped to drive sales. There has been some innovation in low-calorie and low-carb products that appeal to certain customers. These are not easy products to produce, but with the new sweeteners available manufacturers can produce these low-cal frozen beverages, which have a lot of appeal. 7-Eleven, for example, typically offers up to two different sugar-free Slurpee offerings at its stores.

J.P. Jordan, merchandising manager for Corpus Christi,Texas-based Star Investments Inc., which operates 18 Texas Star c-stores, said one of the biggest challenges in managing the category is keeping the assortment fresh.

“When you’ve got a convenience store you’re always dealing with new products in candy, snacks and packaged beverages,” Jordan said. “Frozen beverages is not an overlooked category. In fact, it’s extremely popular here in Texas, but it needs a little flair or a little spark—something to give it a little bit more excitement to draw customers in.”

While all 18 Texas Star stores feature frozen beverage sales, new flavors aren’t as available as Jordan would like. “The big guy in the frozen carbonated beverages here is Icee. They get all their products from Coca-Cola. It’s a great product, but they’ve basically offered the same flavors for as long as I’ve been in this business, which is five years,” he said. “I haven’t seen any new flavors come across my desk, or been offered.”

Texas Star simply labels its frozen product Coca-Cola, and offers flavors that include Blue Raspberry and Wild Cherry. “We have our own decal and machines, and we label it ourselves, whether Icee or Alligator Ice or one of the other big guys,” Jordan said.

Alligator Ice’s creative slush flavors include Bayou Raspberry, California Strawberry, Creamy Cherry, Georgia Peach, Swamp Water (Lemon Lime), Strawberry Banana, Watermelon Slice, Creamy Pina Colada, Orange Dreamsickle, Banana Split and more.

The chain’s promotions focus on price and daypart, Jordan said. The 16-ounce drinks are normally priced at 99 cents and the 24-ounce cups at $1.19. For promotions, the chain may price any size drink at 99 cents, or even 89 cents depending in the kind of deal it can swin
g with Coca-Cola. A Happy Hour promotion offers customers a free drink when they purchase one during a couple of designated hours each day. Promotions are trumpeted with signage, but usually not paid advertising, he added.

 

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