Finding New Opportunities for Fountain Drinks

New flavors, equipment and offers create excitement in the cold dispensed beverages category.

Finding New Opportunities for Fountain Drinks

March 2025   minute read

By Pat Pape

As the c-store industry’s third largest foodservice category, cold dispensed beverages made up 7.5% of foodservice sales in 2023. The category beat NACS’ inflation metric and grew sales by 9.6%, a year-over-year sales dollar increase from $4,836 to $5,301 per store, per month, according to the NACS State of the Industry Report® of 2023 Data.

“Gross profits increased from $2,667 to $2,744, and while gross margins decreased year over year, the category still managed a high margin of 51.76%,” said Emma Tainter, research analyst/writer at NACS.

“According to NACS’ 2023 Convenience Voices study, 41.9% of customers surveyed described their c-store mission as an effort to quench their thirst,” she said. “And they were eager to try different combinations of flavors in their sodas, teas, lemonades and more.”

Among Convenience Voices respondents who visited a c-store based on its product offerings, the quality and availability of fountain or frozen beverages was the third most popular reason (43.5%) for selecting a particular outlet.

“Dispensed and made-to-order cold beverages in a convenience store setting are universally appealing,” said Donna Hood Crecca, principal at Technomic, noting that Technomic data found that 99% of shoppers who purchase c-store beverages do so at least once a month, and 73% do so once a week or more.

Recipes with QR codes at the finishing station will help in-store shoppers create their long-time favorites or a totally new drink.

“If we look at it by frequency, we see some notable demographic skews,” Crecca said. “The heaviest users—those people who come in once a day, twice a day or a couple days a week—skew younger. The Millennials and Gen Zs are your core, and then there are younger Gen Xers. They tend to come from more diverse backgrounds and are more likely to come from the South and West regions. That makes sense because we are talking about cold beverages in warmer temperatures.”

“Less frequent users—those who come in less often than once a week—skew a little older. They are older Gen Xers and Baby Boomers,” she said. “They’re less diverse, and from a regional perspective, they are more likely to be in the Midwest.”

But no matter the age, background or shopping frequency, all cold dispensed beverage customers have three concerns in common.

“Price, cleanliness of the beverage area and the variety or selection are universally important,” Crecca said. “And the ability to customize comes into play for the heavier and super heavy cold beverage user—that ability to add a flavor shot or sweetener or maybe to combine different fountain beverages and create their own drink.”

Options Are Obligatory

About 40% of the interior real estate at Curby’s Express Market in Lubbock, Texas, is devoted to beverages. The store offers a massive cold tea program featuring 32 flavors of brewed tea—with and without caffeine—and additional LTOs throughout the year. Hot summer days in Texas bring out tea fans in droves, with the store selling as many as 2,000 units in a 24-hour period.

“This year, we’re expanding our tea program, following the spicy trend and adding local flavors,” said Richard Cashion, chief operating officer at Curby’s, who worked with a “tea monger” to come up with drinks attractive to West Texas consumers. “One will be a prickly pear cactus flavor that we’ve already tested in store.”

In addition, Curby’s sells Zoomies, a hand-crafted drink enhanced with energy powder; Red Bull Refreshers, which marry the popular energy drink with various fruit flavors; and a dirty soda dubbed a Twister.

When these beverages were first introduced, the store relied on baristas to concoct them on request while guests waited. But plans are underway to install a beverage finishing station, allowing customers to be the master of their own refreshment.

There are numerous advantages to having the ice maker on top of the dispenser.

“People have asked for that ability, and they want to experiment,” Cashion said. “Because they love to mix and match, we’re getting bubblers that will let them self-serve. Plus, we have a lot of candy, toppings and flavors they can add.”

Recipes with QR codes at the finishing station will help in-store shoppers create their long-time favorites or a totally new drink. Drive-thru customers who know what they want will still receive custom service.

Through the store’s loyalty program, Curby’s learned that the average loyalty customer visits the store 6.5 times a week.

“Sometimes they just get a tea for the day, but a lot buy two teas for the day,” Cashion said. “We do one-off specials once a week and notify loyalty members [by email or text] about new products and LTOs twice a month. We try to reward our loyal customer base and not just go after the promotional customer. It’s working for us, and we’re seeing great retention.”

Keep the Ice Nice

Several decades ago, fountain patrons had one choice of ice for their drinks. It was cold, cubed and helped satisfy the craving for refreshment. Then in 1981, Scotsman Ice Systems introduced the first chewy ice machine, which was soon adopted by the Sonic Drive-In chain. People went wild for the softer, crunchable ice, which contains tiny air pockets in each little pellet.

Today, many fans continue to call the product Sonic ice, while others refer to it as chewy ice, nugget ice, nutty ice, pellet ice or pebble ice.

“Chewy ice takes on the flavor of the drink,” said Jeff Biel, vice president of marketing and product development at Scotsman Ice Systems. “C-stores have done a good job of giving people a choice of both chewy and cubed ice. Offering customers a choice of ice is one way of drawing more people in.”

To keep beverage buyers returning, ice must be nice—clean, fresh and visually appealing. Therefore, operators should faithfully maintain their ice machines, which can be challenging in hot climates where the equipment is under added stress and in stores with a robust fresh food program.

“If you’ve got your ice dispenser close to a cooking, frying or baking area, you have contaminants in the air—such as biofilms and microorganisms,” Biel said. “You could get yeast and grease in your ice machine, which could cause a serious health issue. In that situation, cleaning becomes even more important.”

Ice is an opportunity. Maybe its shaved, chewy or cubed, but being strategic about their ice offering can help retailers differentiate themselves.”

When building or remodeling a location, “Make sure the ice machine is sized appropriately,” he said, adding that the Scotsman website provides a guide for determining the appropriate ice machine for an individual store.

“It used to be that the ice machine was at the back of the house, and someone would transport ice to the beverage dispenser, which often resulted in spilled ice,” he said. “There are numerous advantages to having the ice maker on top of the dispenser, but the dispensers don’t have a lot of storage. You may need a machine larger than you think, especially now that ice is being used for coffee and other beverages. And don’t forget those customers who like to fill up their Yetis.”

According to Crecca, today’s consumers understand ice, especially those who are of legal age and familiar with cocktails.

“Even those who are younger consider things like ‘How quickly is this ice going to melt?’ and ‘Can I chew on it?’,” she said. “Ice is an opportunity. Maybe its shaved, chewy or cubed, but being strategic about their ice offering can help retailers differentiate themselves.”

QuikTrip knows that customers are picky about ice. “We offer both crushed and cubed ice, and the preferred ice choice varies by region,” said Aisha Jefferson, manager of communications for QuikTrip. “QT provides these options because our customers consistently tell us they like variety, especially with their beverages.”

Equipment Upgrades

In addition to new flavors and recipes, retailers of cold beverages have more equipment options. Coca-Cola introduced its original touch-screen Freestyle soda fountain in 2009 and is now launching other equipment possibilities for retailers building or remodeling stores.

“Coca-Cola Flex powered by our Freestyle beverage dispenser addresses consumer demand for variety by offering over 40 beverage choices within the same footprint as a traditional six-valve fountain dispenser,” said Kevin LeMoyne, president of convenience retail for The Coca-Cola Company North America. “It enhances guest experiences and simplifies operational complexities, incorporating features like PurePour Technology, a 15” HD touchscreen display for smoother navigation and easy-to-maintain SmartPAK cartridges.”

Another innovative dispenser is the company’s Micro Matic eight-tap.

“It combines vintage-inspired design with modern functionality, which resonates with Gen Z consumers who appreciate a blend of nostalgia and innovation,” LeMoyne said. “Proprietary technology minimizes CO2 breakout, ensuring superior in-glass carbonation for an exceptional taste experience. The multivalve configuration also expands the range of beverage options, thereby increasing consumer satisfaction.”

For the past two years, QuikTrip has been testing self-serve cold beverage equipment as part of an updated beverage program. It offers a variety of options from all major brands, and customer response has been affirmative.

“If everything goes well, we should have new and exciting fountain, frozen and tea flavors and equipment by mid to late 2025,” said Jefferson.

I see great opportunities for convenience operators to be the neighborhood-centric restaurant and store.”

Technology and Experts

Staying on top of category trends and new developments is important to satisfying customers.

“Invest in the technology, and by that, I mean, an actual POS system that can help you manage your beverage program,” Curby’s Cashion advised. “We use ECRS Catapult, which gives us recipe management and the analytics we need. It has a food prep and beverage prep function, so we know how many cups, ingredients and other supplies we need to order. I’m a firm believer in investing in the technology to help control shrink and costs.”

The term “dirty soda” took off in Utah more than 10 years ago when fountain drink aficionados mixed diet soda with coconut syrup, lime juice and half-and-half or coffee creamer. Today, dirty soda describes any traditional soda enhanced with syrups, fruit juices or even candy.

In addition, he is big on sharing information and successes with other retailers, as long as they aren’t direct competitors.

“Figure out what you’re capable of, and if you need to, ask for help. Get in peer groups and talk,” he said. “Don’t let anybody tell you that you’re crazy. A lot of people say, ‘You can’t do that. It’s crazy.’ But you have to take a chance. Don’t go all in; test the waters. Then, build a plan and seek advice.”

“Coming from the grocery industry, I see great opportunities for convenience operators to be the neighborhood-centric restaurant and store, if they take the chance,” he said. “You’ve got to get it out of your head that a hot dog is what everyone wants. Pick something and be good at it.”

Pat Pape

Pat Pape

Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.

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