The Flavor Factor

Since 7-Eleven Inc. first introduced the Slurpee back in 1965, frozen dispensed beverages have been a mainstay of the convenience store industry. Now almost every c-store offers some sort of slushy concoction. Manufacturers and retailers alike have learned from experience that the best way to keep the category fresh and exciting is to keep adding innovative flavors and colors.

Dallas-based 7-Eleven's trademark Slurpee is going stronger than ever more than 35 years after its creation. "We look at trends from candy lines and beverages when we start researching new flavors for Slurpee," said Jeff Hamill, vice president of merchandising for the 5,700-plus unit chain. "Some of our newest flavors are Mountain Dew, Mountain Dew Code Red, Super Sour Watermelon and Super Sour Apple." While basing new Slurpee flavors on hot products and trends doesn't necessarily guarantee a built-in, long-lasting market, it certainly creates a curiosity and eagerness to at least try the latest flavor.

For the most part, new flavor launches are for limited periods anyway. According to Kathy Hall, operations manager at Belvidere, Ill.-based Chilly Willee Inc., "We offer variety because there is a demand for it. But while people want variety, they always end up going back to the basics. The novelty flavors and colors don't have real staying power." In the case of Chilly Willee, which manufactures equipment and flavors, those basics are cherry and blue raspberry, the company's biggest sellers. (At 7-Eleven, Coca-Cola is one of the most popular flavors.)

Chilly Willee offers nine varieties of frozen concoctions, with occasional rotating special flavors. "We often do seasonal promotions and flavors. Our most recent addition is Key Lime Pie, with a graham cracker accent," said Hall. The company puts out special colors for holidays, such as black and orange for Halloween, and red and green for Christmas. "A lot of the attraction of the product is color," she added. Since Chilly Willee dispensers can hold two varieties, retailers can always try out new flavors while still keeping a customer favorite.

Hamill agrees that seasonality plays a big part in Slurpee sales. "Naturally Slurpee sales are seasonal, peaking in the summer months, although it does sell well year-round. Still, you never know; Detroit, which is cold a good part of the year, is the Slurpee capital of the U.S.!" he said.

7-Eleven naturally has a lot riding on the Slurpee brand, its most familiar proprietary item. In addition to introducing new flavors, the company is testing a new version of the perennial favorite, in partnership with Kraft Foods Inc.

"We are currently testing the sugar-free Slurpee, which is a Crystal Light Lemonade flavor, in Kansas City and Detroit," said Hamill. Early results aren't in yet, but the company has high hopes for the diet version, and is moving forward with other Slurpee extensions, possibly with Gatorade and an energy drink.

7-Eleven is also investing up to $40 million in new Slurpee machines, increasing the number of units in each store so that more flavors are available at every store. And the company continues to create flavors such as peanut butter and jelly and buttered popcorn, according to a report in The Wall Street Journal, as well as expanding the line beyond its frozen-drink form. Among other Slurpee products are Slurpee bubble gum, frozen treat and lip balm for kids.

Another big chain pushing its proprietary slush drink is Canada's Alimentation Couche-Tard Inc. The Laval, Quebec-based company offers "Sloche" in about half of its 1,800 stores in Quebec and eastern Canada. "We created Sloche about two years ago in an effort to bring in more teenagers," said Michel Bernard, senior director of merchandising and marketing. "And it has really been successful for us. That first year we saw a 400-percent increase in our frozen beverage sales, and this year we've increased another 30 percent."

Sloche currently comes in four non-carbonated flavors: cherry-flavored Cold Blood; Wild Tar, a lemonade-flavored, black-colored concoction; blue raspberry Windshield Washer; and a grape drink that, translated from the French, is called "Crazy Crazy." Couche-Tard plans to introduce a new flavor every year. "Our chain has a reputation for being offbeat," said Bernard, "and these bizarre names go along with that."

The company, which acquired stores in the U.S. Midwest last year, is currently researching that market to find what kind of frozen beverages would do best there. "We will probably introduce a frozen carbonated drink there, as we have in our western Canada stores," said Bernard. "We're still working on it, though."

Avoiding a Freeze-Out

For smaller retailers, creating a proprietary frozen beverage is both cost- and labor-intensive. The solution for those operators can be to partner with a frozen fountain supplier. These companies offer equipment, maintenance and product as well as merchandising and marketing support — and a variety of flavors that can easily be changed. Cecilware Corp., for instance, provides retailers with a number of powdered mixes for its frozen granita beverages. The Long Island City, N.Y.-based company's auto-fill system continually refills product, keeping it frozen and the bowls full.

Plano, Texas-based Slush Puppie Inc., a division of Dr Pepper/Cadbury, features a wide selection of flavors and formats, including its Original Slush Puppie brand; Thelma's Old Fashioned Lemonade; CaFreezo coffee-flavored frozen drink; and Vita Pup, a fruit-juice based nutritional frozen beverage for kids.

Real-fruit frozen beverages are available from Parrot-Ice, the Houston-based manufacturer of such tempting flavors as Alada Colada, Bananas and Berries, Jamaica-Me-Crazy and Strawberry Frost. The company is also currently testing Electric Parrot-Ice, a frozen sports-drink product with 5-percent real fruit juice, in two flavors — Electric Lime and Orange Shock.

Meanwhile, Selection Unlimited, Burlington, Vt., recently introduced Iguana Ice, a granita product with real fruit juice that is targeted to kids. "There's been a change in customers' palates and lifestyles," said Ric Lashway, president of Selection Unlimited. "People want better-tasting products with higher nutritional value."

Chilly Willee's Hall emphasized the importance of flavor quality. "What you have is a frozen beverage that can numb your taste buds," she said. "The flavors must be bold and robust to stand up to that temperature. What we've seen to be most important is the quality of the product."
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