C-store Retailers See Profits Pour In With Dispensed Beverage Offerings
NATIONAL REPORT — Conversation about the future of convenience store foodservice often revolves around prepared food, but retailers must factor dispensed beverages into their strategy if they want to maximize returns in the category. Along with the potential for high sales volume and good profit margins, this segment gives operators the opportunity to be part of consumers' daily routines.
According to the 2025 Convenience Store News Forecast Study, around 90% of c-store operators predict that their sales of hot, cold and frozen dispensed beverages will increase or hold steady in both dollars and units this year. Retailers can improve their odds by leaning into current dispensed beverage trends, which include flavor variety and customization options.
"Customers increasingly want to personalize their drink choices, whether it's adjusting sweetness levels, adding flavor infusions or choosing between dairy and plant-based milk options," said Shauna Seidenberg, category manager for dispensed beverages at Westborough, Mass.-based EG America, whose convenience store banners include Cumberland Farms, Certified Oil and Turkey Hill.
Customization will be "a key driver" across all beverage segments in 2025, Seidenberg said. "This trend will also be further fueled by the desire for sustainability, as many consumers are also seeking more ecofriendly and health-conscious beverage options," she added.
[Read more: Capitalizing on the Opportunity in Dispensed Beverages]
In addition to offering more options, c-store retailers should "lean into the specialty," advised Tim Powell, a principal at research and consulting firm Foodservice IP, headquartered in Chicago. He recommends retailers take a cue from quick-service operations such as Taco Bell's beverage-forward Live Más Café.
"Operators are trying to find ways to reduce prices while they're still very high on the supply side of things. For any of these categories, creative naming and marketing such as 'handcrafted' or 'elixirs' tend to resonate highly with Gen Z, and the labor and costs are nominal compared to food," he said.
Enhancing Your Offer
While carbonated soft drinks may be the king of the fountain, success in c-store dispensed beverages this year is likely to be driven by several other beverage types.
"Cold beverages will continue to see increased demand as consumers seek options that offer high levels of refreshment, fun and functional benefits like energy. As the demand for convenience and personalization rises, we foresee a greater emphasis on offering customizable cold beverages," Seidenberg explained.
Dispensed beverages with added vitamins and energy additives also will continue to resonate with consumers in search of both a caffeine boost and enhanced performance benefits, she said. And big-name national energy brands aren't the only ones to catch consumers' attention — EG America has found that "customers love" its proprietary energy beverage, NRG Kick.
When it comes to dispensed tea, however, opinions are mixed. Within the convenience channel at large, "tea has been seemingly on the cusp of growth for 20 years, but can't quite get there," Powell noted. Yet, certain retailers such as Curby's Express Market in Lubbock, Texas, are very bullish on tea. Geography seems to be the differentiating factor.
"Tea is important to our customers, especially in the South region," Seidenberg said.
In hot beverages, retailers are encouraged to offer seasonal coffee varieties while in frozen beverages, the recommendation is to market them as functional treats.
"Frozen coffee beverages will continue to be a major trend, especially with the rise of indulgence-driven consumers looking for high-quality coffee drinks that double as both a treat and a pick-me-up," Seidenberg observed.
Along with offering on-trend options, retailers must put effort into maintaining this section of the store to maximize its effect. While the dispensed beverage segment is often viewed as a complement to the main draw of prepared food, it's important for retailers to recognize the impact that the physical space has on customers, and do what they can to allocate labor to maintain it.
"In our research, we see that only about a quarter to a third of stores have dedicated foodservice staff. In an ideal world, where turnover was not an issue (it is) and labor costs weren't so high, a staff member would be assigned to not just the condiment areas, but the foodservice grab-and-go spaces too," Powell said. "If there is visible spillage, straw paper and lids scattered about, it's not going to make it attractive for the consumer who stops in for say, the restroom, and on impulse buys a dispensed beverage."
Without dedicated labor, the best substitute is self-serve units such as f'real milkshake machines and Coca-Cola Freestyle units, he added, but even this type of equipment requires maintenance and cleaning. "Unfortunately, there is no substitute for personnel," Powell said.
Providing Value
Dispensed beverages should be a priority in marketing and promotions, particularly if a strong digital loyalty program is in place. Seidenberg noted that EG America's SmartRewards loyalty app features deals and specials throughout the year to connect with customers looking for innovative, in-demand products at the best value.
In recent years, beverage subscription programs have generated some buzz as a vehicle to deliver value and increase visits. However, some retailers found these programs depressed sales while not meaningfully driving traffic, as with Circle K's Sip & Save program that ended in spring 2024.
Powell pointed out that while beverage subscriptions may be a good idea in general, the return on investment varies from retailer to retailer and is dependent on several factors.
"The cost on a hot dispensed coffee is about 5%, so even if one pays $10 a month ... it increases the chances they will come in and purchase another item, increasing the check. I think the bigger question is how valuable it is to the consumer," he said. "If it's a loyal customer, they will likely be there every day anyway but for the moderate user, the verdict is out if they feel it is worth the money."
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