Foodservice: Even Flow

Retailers seek synergies between cold vault and fountain

By
Steve Dwyer, CSP Reporter

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Both dispensed and cold-vault beverages have a lot of power to catalyze purchases across the store—and in several different fashions.

Retailers don’t typically promote fountain drinks paired with single-serve bottles or cans on a regular basis, but Kris Kingsbury recently gave it a whirl—with some early positive results at the 18 Rotten Robbie c-stores in Northern California.

“I was at a conference recently and heard about a successful promotion another retailer had launched,” says Kingsbury, marketing and merchandise manager for Santa Clara, Calif.-based Robinson Oil Co. “So we began offering a 22-ounce fountain drink with a smartwater bottle, which saves a customer 58 cents.”

To broadcast the offer—which has been well received, although Kingsbury did not have concrete sales figures at press time—Rotten Robbie store personnel uses pumptoppers and in-store POS materials. “We found early on that the fountain drink is immediately consumed and the water is for later. The ancillary benefit of a promotion like this is that it moves customers around the stores more, increasing overall exposure and creating impulse sales,” she says.

Carbonated-soft-drink (CSD) sales might be suffering these days, but there’s a sea of leaders to compensate for the underperformance. “We offer an everyday ‘two-for’ promotion in the cold vault that features energy, water, tea, sports drinks or even CSDs,” says Kingsbury. “Our customers know they can get two for a better price, and we use social media and cellphone alerts so customers know what’s hot.”

C-stores should similarly leverage beverage traffic to drive foodservice offers. Joey Hobson, customer fanatics director-Refresh, for North Salt Lake, Utah-based Maverik Inc., deploys campaigns that integrate packaged and dispensed beverages.

“We offer a hot-dog combo with chips and a fountain drink for $4, and also find success with a pork burrito and 16-ounce Monster Energy drink for $4,” Hobson says. “We can go both routes, but fountain obviously drives more penny profit than cold vault.” According to NACS, cold dispensed beverages generally generate a 54% margin while packaged CSDs bring a 36% gross margin.

“We see sustained fountain volume all day long, with a typical spike occurring at breakfast and lunch,” Hobson adds.

Fountain drinks can be integrated easily within a foodservice bundle or combo meal, yielding both profit for the operator and convenience for the customer, says Steven Montgomery, president of c-store consulting firm b2b Solutions LLC, Lake Forest, Ill. “The physical proximity of the fountain is usually located in the same area as foodservice. Therefore, it’s much more accessible to a meal-deal buyer than is the bottle/can cold vault,” he says.

Even though chains such as Rotten Robbie can engage a beverage consumer to buy both fountain and cold vault during the same store visit, the line between cold-vault drinkers and fountain consumers can be hard to straddle, says Montgomery.

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