Getting the Cold Shoulder

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Getting the Cold Shoulder

By Linda Lisanti, Convenience Store News - 08/18/2008
By Linda Lisanti

Summertime's hot and hazy days make it the prime time for frozen beverage sales, but this year, convenience stores are finding themselves up against a lot more competition as restaurants and coffeehouse chains go after the same brain-freeze business.

In a recent column for CSNews' Foodservice Trends e-newsletter, Maria Caranfa, who leads Mintel Menu Insights, noted beverages overall are becoming a major component on restaurant menus since they can be enjoyed not only with a meal, but also make a refreshing and fulfilling snack.

Caranfa reviewed several recent developments:

-- Fast-casual restaurants -- Einstein Bros. Bagels, Panera Bread and Au Bon Pain -- have all recently added new frozen beverages or smoothies to their menus, she said.

-- McDonald's is said to be contemplating a national launch of its own smoothies, which are being tested in several California and Michigan markets. The mixtures of berries, bananas and fruit syrup are sold in three sizes, ranging from $2.79 to $3.99.

-- Taco Bell's new Frutista Freeze is a permanent line of signature frozen drinks offered in both Strawberry and Strawberry Mango flavors, and are topped with real strawberries. At $1.89, the drink is served in a 16-ounce clear cup with a signature purple spoon-straw.

-- In July, Starbucks introduced Vivanno Nourishing Blends in Orange Mango Banana and Banana Chocolate flavors, retailing for between $3.75 and $3.95.

While competitors put a spin on frozen beverages with new flavors and combinations, c-stores tend to stay loyal to the original flavors, according to Caranfa. However, it appears there's a need for greater innovation, as the 2008 Convenience Store News Foodservice Study shows frozen dispensed beverages are the laggard in the foodservice category. Per-store sales in 2007 averaged $6,890 -- a negligible increase of 0.3 percent. That's compared to increases of 13.2 percent in prepared foods, 8.4 percent for hot dispensed beverages and 1.8 percent in cold dispensed beverages. Frozen dispensed accounted for just 4.9 percent of total sales in the foodservice category last year.

Among c-stores, 7-Eleven's Slurpee serves as a prime example of inventiveness in frozen beverages. On average, more than 13 million Slurpee drinks are consumed each month.

7-Eleven spokesperson Margaret Chabris shared with Convenience Store News why Slurpee is so successful. The first reason is the brand's colorful history dating back to 1965 and its fun name, which mimics the noise made when the drink is properly consumed. Whacky flavors, quirky radio and television campaigns, interesting collectible cups and major brand associations -- from well-known soft drinks and energy drinks to movies and videogames -- also help drive its continued popularity, she explained.

This summer is the biggest ever for 7-Eleven in terms of Slurpee promotions. Campaigns have included rip-and-run tear-away posters in one city; a mobile Slurpee van complete with videogames and a 6- by 12-foot side-panel screen; original Slurpee films on; and online contests to win videogames and game consoles.

Sure, many c-stores may not have the budget or the resources 7-Eleven does to execute such an array of promotions. But the lesson every operator can take away is that consumers reward originality. In the face of increasing competition, c-stores must ensure their offering stands out in the crowd -- or they risk getting the cold shoulder.