Bursting the Bubbles

There's little doubt that frozen slush beverages are gaining new popularity. Just take a look at convenience stores, trendy coffee shops such as Starbucks and other retail outlets. You'll see customers sipping happily on frozen coffee drinks or drinking smoothies, icy concoctions made with real fruit and real fruit juice. And let's not forget the time-honored Slurpee at 7-Eleven stores. These beverages make up a tasty, growing portion of the non-carbonated segment of the fountain category, which also includes iced tea, lemonade, sports drinks and fruit flavored drinks such as Lipton Tea, Country Time Lemonade, Powerade, All Sport and Hi-C.

While the popularity of frozen drinks no doubt is good news for c-store operators, the non-carbonated category as a whole occupies only a small piece of fountain turf. In fact, some c-store operators offer non-carbs in their fountain lineup simply to keep a handful of customers happy. Retailers say customers often prefer cans and bottles over cups in general, and if customers want a non-carbonated drink, they frequently will reach for bottled water or a sports drink in the cooler rather than something similar at the fountain.

There certainly is no shortage of non-carbonated dispensed drinks. With a plethora of beverages to choose from, category managers keep their eyes on their customers to help them decide what to offer. "It all depends on what the customers want," said Ken Hagler, vice president of marketing at Family Express Corp., a 38-unit company based in Valparaiso, Ind. The core customer for non-carbonated beverages at Family Express is the blue-collar male age 18 to 34. "We want to carry what they want, so we keep a close eye on what moves and doesn't. Naturally, we add and remove beverages according to sales results," he said. Non-carbs account for about 20 percent of fountain sales at the chain.

"Our selection varies from store to store, and so do our offerings at the fountain," Hagler said. "Six or seven of the 12 fountain heads at each of our stores have a consistent offering. The remaining heads change."

Non-carbonated fans at EZ Go Foods, a 19-unit chain in Lawton, Okla., operated by Johnson Oil Co., are younger than those at Family Express. With the exception of tea, kids drink up the non-carbs, according to Carey Johnson, the company's vice president. Hi-C pink lemonade, lemon lime Gatorade and All Sport make up the chain's non-carbonated fountain menu, along with iced tea, and Parrot-Ice frozen drinks in flavors that include strawberry, peach, grape and piña colada. "If it's not the kids, then it's the parents who want their children to have something non-caffeinated," he said. Otherwise, non-carbonated fountain beverages are not a very big deal at EZ Go.

While non-carbs are a minor player at these companies, they have a more significant impact on sales at TranCo Food Store in Houston, where customers appreciate a cold drink when the weather heats up. The single-unit operator, which opened in August 1996, has offered Parrot-Ice since the beginning. TranCo customers pay 99 cents for a 4-ounce cup and $1.29 for a large, 20-ounce cup.

TranCo seems to be alone. Sheetz Inc., a leader in many other aspects of foodservice, sees only limited activity in the non-carb segment. According to Sharon Vaughn, category manager of the fountain and coffee programs at the Altoona, Pa.-based c-store chain, only around 20 of its 230 units offer non-carbonated fountain beverages. Although Sheetz's fountain supplier is Pepsi, the c-store company keeps its non-carb program anonymous. Only Hawaiian Punch is branded. Frozen beverages do better than other non-carbonated beverages at Sheetz's stores, according to Vaughn.

"A fourth of our stores have six or eight barrels of frozen beverages. Of those barrels two each are non-carbonated," said Vaughn. "About three to four of our 16 offerings at the fountain are non-carbonated." In fact, a mere 6 percent of fountain sales at Sheetz are non-carbonated beverages.

Currently, Sheetz is in the research and development stage with frozen non-carbonated drinks. The chain wants to test cappuccino, french vanilla, a fudge flavor and possibly a fruit flavor for its frozen non-carbonated program.