The hottest years on record were 2015, 2016, and 2017. Scorching summer temperatures naturally make people thirsty for frozen beverages. It’s no surprise that we’ve seen growth in frozen beverages.
The smoothie market was an estimated $5 billion in 2016. Global Industry Analysts, Inc. projects that smoothies will become a $17 billion global market by 2024. Consumers are drawn to the healthy, on-the-go convenience of smoothies, often seeing them as meal replacements.
Slushy drinks, popularized by convenience stores, can now be found in many other venues. For example, national foodservice chains like Taco Bell, Sonic Drive-In, Burger King, and Cold Stone Creamery have all added slushy drinks to their menus. Coca-Cola is currently conducting a national test of its new instant slushy making machine.
According to Joe Grecula, Vice-President of Sales at Spaceman USA, “Frozen beverages are an excellent way for multiple formats to capture additional high margin revenue. At Spaceman, we have seen a considerable uptick in frozen beverage machine year over year. This is a trend that will likely to continue for the foreseeable future, as end users are looking for ways to grow margin and revenue.”
The variety of frozen beverages includes milkshakes, smoothies, floats, granitas, and slushes. And it seems like there are endless variations of each type of frozen drink. For example, smoothies can be served in a cup or bowl, be healthy or indulgent, have caffeine or be caffeine free, and can even be alcoholic.
Reasons for Selling Frozen Beverages
Frozen beverages are attractive product for a frozen yogurt shop to add for variety of reasons, including:
- High profit margin: The gross margin on frozen slushy drinks is about 50% for convenience stores. Slushy beverages contain a large amount of water compared to smoothies and milkshakes. They also require little labor.
- Growing popularity & wide appeal: Technomic’s 2016 Beverage Consumer Trend Report states that 51% percent of consumers said they ordered a frozen beverage from a foodservice establishment in the last month; in addition, 30% of consumers said they are purchasing frozen beverages now more than they were two years ago. Frozen beverages have wide appeal, with younger groups preferring sweeter drinks. Frozen alcoholic drinks appeal to adults. Low sugar versions appeal to the health-conscious.
- Complementary with yogurt: Yogurt-based smoothies, yogurt-based slushy drinks, or concoctions that combine swirls of yogurt and slush or another beverage type are natural extensions for a yogurt shop. Yogurtland offers frozen beverages that guests can add toppings and sauces to – the same toppings and sauces that are used for frozen yogurt. Some Menchie’s locations offer made to order Dole Whip floats.
- Low cost of entry: Frozen beverage machines are much cheaper than soft serve machines, compact, and lower maintenance. We will address this point at length in a future post.
- Long shelf life: Frozen drink base mixes that come in powder or liquid concentrates can be stored for a long time in a cool, dry place.
The downside of frozen beverages is that they do little to help with the cyclical nature of the frozen yogurt business. Both frozen yogurt and frozen beverage sales peak during the summer.
Tips for Selling Frozen Beverages
Convenience stores have a long history of selling slushy drinks. Over the years, they’ve tried many tactics to keep sales up. Convenience Store Decisions advises that slushy sellers keep consumers interested by offering new flavors, limited time only flavors, the ability to combine or customize flavors, collectible cups, etc.
Grecula adds that when it comes to frozen beverages, “patrons are looking for new and exciting ways to mix up their favorites, like adding various flavors such as their favorite fruits and berries, like acai, mango, and pineapple. Frozen beverages such as smoothies that add a yogurt-based component to the drink and pair it with a grain such as granola, can be part of a balanced breakfast and can be quick and fun for adults and children alike. At night, wine and beer slushies are all the rage at restaurants and clubs. Multiple wineries are purchasing frozen beverage machines for their festivals and building trailers to be more portable for various outdoor events. Frozen “boozy” shakes can prop up revenues at dinner time or anytime.”
As for adding the fun component, Grecula offers the following advice, “Keep frozen beverages in cups and straws that come in various colors that change color to the temperature of the mixture. Have a themed night and let the staff and patrons dress accordingly and award a prize to the best dressed or most creative use of that theme. You can also have a special beverage or themed beverage to reflect the occasion.”
