Cold dispensed beverages is a small but powerful foodservice category. “In 2022, it was 2.28% of in-store sales and 7.0% of foodservice sales,” said Jayme Gough, research manager at NACS. “But the volume is there. It’s a good add-on item for customers buying candy or food.”

Although margins decreased slightly in 2022, to 48.13%, gross profit increased 12.0% year over year, to $2,199 per store, per month. “The category saw large increases in 2022, which helped drive sales over the pre-pandemic levels of 2019,” Gough said.

Beverages from the fountain continue to attract thirsty customers, especially during the 100 days of summer. Retailers should be on the lookout for the latest drink introductions, such as the Tractor brand, which capitalizes on consumer interest in certified organic products.

Unexpected and Crafty Choices

Traditional favorites drive repeat fountain visits, but that doesn’t mean shoppers won’t try new tastes. At Pennsylvania-based Rutter’s, six traditional fountain flavors generate the most business, but the retailer does “see some interest in moving flavors on the fountain,” said Chad White, food service category manager at Rutter’s.

Five years ago, Rutter’s added craft sodas to the beverage bar, and an enthusiastic response has kept them there. “We have several unique flavors in this lineup, such as cucumber melon, ginger beer and Pennsylvania birch beer,” said White. “We work with our manufacturer to provide more innovation and unique flavors on our fountain. Functional drinks have been a part of the conversation as we look to provide options.” 

Grand View Research reports that in 2021 the world’s overall craft soda market size—both fountain and packaged—was valued at $651.3 million, and the research organization predicts it will see an annual growth rate of 5.0% through 2030. Fruit flavors are expected to grow fastest in the category.

“Soda drinkers are always interested in trying new flavors, and innovation is part of the Jones DNA,” said Curt Thompson, director of marketing at craft soda maker Jones Soda. “We can meet that consumer need for new and great-tasting flavors.”

Fruit flavors are expected to grow fastest in the category.

This spring, Jones Soda introduced three new fountain options: grape, cream soda and Dr. Jones, a new twist on a classic taste with the sweetness of cherries and a slightly tangy bite.

In 2021, Texas-based 7-Eleven refreshed the fountain lineup with five non-traditional flavors, including a sparkling water. “We’ve continued to see success with our proprietary craft lemonade made with real juice and cane sugar and 7-Eleven’s private-brand, vitamin-infused sport drink, Replenish Zero,” said Ben Boulden, director of proprietary beverages at 7-Eleven. “And in 2023, that offering is expanding with Minute Maid Strawberry Hibiscus Aguas Frescas.”

Big Brands Are Evolving

Coca-Cola is launching new fountain options and reformulating some existing flavors, according to Melinda Pritchett, director of category strategy and innovation, Coca-Cola.

“Fanta Pineapple, a favorite packaged beverage, is now offered via bag-in-box for the first time,” she said. “Fanta Orange has undergone a reformulation and is bringing a superior formula to dispensed. Fans will still enjoy the bright, bubbly and instantly refreshing drink they love—with a bolder taste than ever before.”

In addition, recently reformulated Powerade has rolled out Tropical Mango for the fountain, and Barq’s Red Cream Soda is now fountain-ready.

We’ve seen tremendous growth in non-carbonated beverages, such as iced teas, lemonades and frescas.

This summer, Sprite celebrates the 50th anniversary of hip hop through partnerships with iconic artists and Sprite Lymonade Strawberry Legacy LTO. “7-Eleven is thrilled to introduce Sprite Lymonade Strawberry Legacy to 7-Eleven’s lineup,” said Boulden. “It will be exclusive to our stores as a fountain soda.”

Pepsi kicked off 2023 with several new offerings. “In January, we launched Starry, a new lemon-lime-flavored soda available in both regular and zero sugar,” said Scott Finlow, chief marketing officer for PepsiCo Global Foodservice. “The demand for lemon-lime-flavored soda has accelerated significantly over the past several years. We’re excited to offer people more choice and customization with this bold new offering that hits different than others in the category.”

For years, beverage manufacturers have seen a growing preference for drinks with less sugar, but customers also want more sweetness and variety than what water alone provides.

“We’ve seen tremendous growth in non-carbonated beverages, such as iced teas, lemonades and frescas, on fountain, and we’ve evolved our soft drink offerings to reflect this trend,” said Finlow. “Consumers love the taste of our signature products, and in January, we launched our new, improved PepsiCo Zero Sugar, keeping taste and flavor top of mind. The upgraded recipe uses a new sweetener system to create a bolder taste profile. Consumer testing has shown that it’s already outpacing the old formula across the board, including in metrics like overall liking and purchase intent.”

Multitasking

Sunny Sky Products has enhanced its line of Pure Craft Beverages, adding vitamin C and zinc and, in some of the 11 flavor options, a boost of energy. Plus, the drinks are a three-in-one product.

“The beverages can be cold dispensed in a bubbler, cold dispensed on the fountain and used in a frozen dispensed machine,” said Isabel Atherton, director of marketing for Sunny Sky. “Instead of the same old lemonade and tea, you have awesome flavors that refresh the category. We have strawberry watermelon, grape elderberry, pineapple papaya. These are more exciting flavors that appeal to Millennials.”

Retailers will always carry the classics, she said, “but when you have drinks that are not brand specific, like juices, you can spruce up the fountain and have a category you can really play with.”

As the weather heats up, many retailers are bringing back refill mugs, which disappeared during the pandemic, and promoting fountain drinks with bundles and special offers. And because consumers are watching their budgets, fountain drinks are a value compared to more pricey beverages from the cooler.

“People are continuing to make more purchases away from home and outside of traditional grocery stores,” said Finlow. “These things present a big opportunity for c-stores.”