For years, cold dispensed beverages have pulled in customers and revenue to convenience stores. Then the coronavirus pandemic hit, triggering shutdowns of self-dispensed beverage programs for several months. “Cold dispensed beverage sales suffered in reaction to COVID-19 concerns around food safety,” said Jayme Gough, NACS research manager.

According to data from the NACS State of the Industry Report of 2020 Data, cold dispensed beverages accounted for 7.6% of foodservice in 2020. Average sales per store for cold dispensed beverages dropped 6.1% from 2019. “Three of the five foodservice categories experienced negative sales growth from 2019 to 2020,” Gough said.

CSX monthly sales data also showed a sharp dip in April 2020 during the peak of the uncertainty around COVID-19, further harming 2020 overall sales of this category. “While sales recovered some during the summer of 2020, they didn't yet return to 2019 levels,” Gough said. “Historically, fountain drinks are often purchased during the lunch daypart and bundled with prepared food offers, but all of this was disrupted.”

Last year when COVID-19 restrictions went into effect, 7-Eleven reported a dip in in-store visits, especially among commuters during morning and evening hours, which impacted sales of cold dispensed beverages, among other categories. “However, the cold dispensed beverage category has been resilient during the pandemic, as it offered a break from the daily routine and trends to skew lunch and afternoon dayparts that have been much less impacted by loss of mobility,” said Jawad Bisbis, vice president of proprietary beverages for the Irving, Texas-based chain. “Now as more and more states and counties open up, we are seeing more traffic in stores, which is driving up our cold and frozen dispensed beverage business.”

COVID-19’s Impact

While COVID-related restrictions for self-serve fountain have largely eased, the category still has a ways to go to recover from the downturn of 2020. “Nearly 100% of our customers have safely reopened their dispensed sections to be fully self-serve, and many are heavily promoting and innovating,” said Shane Wheatland, vice president of Keurig Dr Pepper Foodservice Solutions. Keurig Dr Pepper worked regularly with its customers to ensure sanitization of all self-serve stations by placing hand sanitizer near the fountain station, frequent cleaning of the fountain area and mask reinforcement. “We’ve also worked with our equipment partners on touchless valves as an option for customers,” Wheatland said.

That’s also something The Coca-Cola Company noticed. “Consumer desire for frictionless hygiene options has become a trend across all retail channels,” said Carlton Austin, director of convenience retail strategy and commercialization, North American operating unit for Coke. “Everything people touch needs to come with an assurance it’s been properly sanitized. For convenience retailers, this means they need to overcommunicate their health, safety and sanitation measures to shoppers.”

Everything people touch needs to come with an assurance it’s been properly sanitized.

To that end, Coca-Cola rolled out an innovative, touch-free solution for fountain: contactless valves. Additionally, in July 2020, Coke introduced contactless, mobile pouring for its Coca-Cola Freestyle platform through a QR code on the machine without having to download an app or enter personal data. “Our goal is to provide a variety of solutions so our customers can offer consumers the Coca-Cola beverages they love while driving critical revenue to their bottom line,” Austin said.

7-Eleven halted reusable self-serve cups and complied with local ordinances requiring some stores to temporarily move self-serve beverages to a clerk-serve model. “Beyond maintaining a clean store and adhering to CDC guidelines, offering customers unmatched value and unique product innovation will continue to be key to winning them back,” Bisbis said.

Summertime Thirst

Summer is a fantastic time for promotions and getting customers excited about cold dispensed beverages. “With hot weather comes thirsty customers seeking something traditional or adventurous,” Gough said. “Retailers have to be prepared for all tastes this summer.”

Cold dispensed beverage offers are a great way to get customers in the door, giving retailers the opportunity to convert them into a food or snack purchase along with the fountain drink. “There’s huge competition in this category from QSRs, and other channels like dollar stores have attempted to siphon off share from the convenience channel,” Gough said.

To reinvigorate the cold dispensed beverage category, 7-Eleven launched a limited-time offer on Big Gulps for 79 cents through its 7Rewards program to kick off summer. The chain also recently introduced five new flavors on the fountain from its private-label sports and energy drinks and branded offerings.

Coca-Cola’s Freestyle’s mobile pour technology proved successful in keeping dispensed beverages flowing during the pandemic, especially during the summer of 2020. “We know from Coca-Cola Freestyle data that consumption in c-stores typically peaks in the summer, and that trend held true in 2020, despite the COVID-19 pandemic,” Austin said.

The Power of CSX Data

CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or [email protected] for a complimentary executive walkthough.

Fountain Innovation

While traditional carbonated beverages are still dominant in terms of sales, the growth of other dispensed beverages can be attributed partly to the recent popularity of iced or cold brew coffee, kombucha and other cold brew teas. “Customization is particularly important to young customers, who love to experiment with flavors and create something unique,” Gough said. “More and more retailers are meeting that need with myriad cold dispensed options.”

At Keurig Dr Pepper, COVID-19 accelerated the brand’s innovation pipeline because of customer collaboration and planning. The company recently developed a shelf-stable, cold brew concentrate for the Green Mountain Coffee Roasters brand. Working in conjunction with the Bunn Nitron machine, Keurig Dr Pepper now offers a turnkey, low maintenance solution for convenience store operators looking to add premium cold brew and cold brew nitro offerings.

New Category Definitions Released!

NACS Category Definitions & Number Guide Version 8.0 was released in early 2021. Developed by the NACS Research & Technology Committee, this new version reflects significant updates to the last broad iteration (version 7.0 released in 2010). To view the latest updates, visit www.convenience.org/categorydefinitions.

Coca-Cola recently introduced two varieties of its sparkling water brand, AHA to the fountain: AHA Lime + Watermelon and AHA Blueberry + Pomegranate. “Americans are drinking more sparkling water during more occasions and times of day than ever before,” Austin said.

PepsiCo has brought its first permanent new Mountain Dew flavor in more than a decade to the fountain. “We’re first bringing Mountain Dew Major Melon exclusively to Circle K’s cold dispensed beverage program,” said a PespiCo spokesperson. The company will also launch Dole Strawberry Lemonade Fountains at Circle K stores in late June.

Rutter’s is currently “sticking with what has worked,” according to Chad White, foodservice category manager for the York, Pennsylvania-based chain. “But we are looking at new equipment and what flavors should be on the fountain beverage island.” Rutter’s is considering adding cold coffee but is still in the process of evaluating options.

According to 7-Eleven's Bisbis, “We’ve continued to be a leader in the cold dispensed beverage category.” 7-Eleven’s ongoing refresh of its in-store cold beverage fountains include five new pours designed to capture consumer interest in better-for-you functioning beverages: Replenish Zero, Quake Berry Blast, AHA Sparkling Water, vitaminwater zero squeezed and Craft Lemonade. “We will continuously track customer trends and preferences in order to provide a cold beverage assortment [customers] crave,” he said.

Sparkling Future

Americans are drinking more sparkling water during more occasions and times of day than ever before.

Convenience stores should lean into their competitive advantage of meeting shoppers where they are, especially with cold dispensed beverages. “Convenience retailers miss out on major profits when gas shoppers don’t go inside the store,” Austin said. “Therefore, it’s important to leverage pump signage to increase awareness of cold dispensed beverage offerings inside.” Adds Wheatland, “The future of cold dispensed beverages in convenience stores will be an intersection of safety, value and innovation. We’re working hard to keep our employees, customers and consumers safe while delivering innovation that will drive traffic and sales,” he said.

“Meet shoppers in the moment with innovative cold dispensed beverages, and show them how a fountain beverage will elevate their occasion and liven up their days with new experiences and interesting flavors,” Austin said.

“Customers want high-quality, great-tasting beverages in a convenient way at a great price,” Bisbis noted. “Our cold beverage fountain assortment provides fantastic opportunities to innovate quickly to meet customer needs.”