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Dispensary Drinks Pour in Big Profit

by: Meline Beach

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It’s all about choice and control for today’s consumer. We want it all.

That goes for dispensary drinks too. If you take a look around, more establishments are offering customers more control over their beverage of choice – in product variety, selection in flavours and the freedom to pour it themselves.

 

The dispensary drinks category has expanded beyond your basic coffee and fountain drink and includes a variety of carbonated sodas, simple or specialty coffees, smoothies and milkshakes on a full-serve and self-serve basis in c-stores across the country.

Ice or no ice. Single flavour or multiple flavours combined. Hot, cold, iced or blended. Half cup, full cup. Organic, Fair Trade or Rainforest Alliance Certified. The choice is yours.

C-stores have the competitive advantage of offering customers dispensed beverages that are quick, consistent and comparative quality, portion-controlled, reasonably priced and on the go – at the touch of a screen.

Convenience & Carwash Canada spoke with a few representatives in the dispensary drinks industry for their take on popular products, reliable equipment, industry trends, a retailer’s responsibility and what to watch out for to ensure a success dispensary drinks program in the C&G channel. We spoke with Chris Midbo, territory manager with Western Refrigeration; Amy Brown, marketing manager with Franke Coffee Systems; and Judi Saliba, senior sales executive at TFI Food Equipment Solutions Inc.

What drink dispensary equipment do you supply to the C&G channel?

Western Refrigeration [WR]: Western Refrigeration supplies fountain beverage dispensers and FCB (frozen carbonated beverages) dispensers. These are primarily self-serve. The company we represent is Cornelius, which is the largest manufacturer of beverage equipment in the world.

Franke [F]:  Franke offers a full portfolio of both semi and super automatic coffee systems, with full-serve and self-serve applications. Our A-line of super automatic coffee machines (A1000, A800 Fresh Brew, A600, A400) dispense beverages at the simple touch of a button – freshly brewed, bean to cup coffee, espressos, cappuccinos, mochas, lattes, macchiatos. Anyone can operate these machines with ease.

TFI Food Equipment Solutions Inc. [TFI]:  Our network supplies Taylor FCB and Franke specialty coffee and bean-to-cup equipment.

 

Which of the dispensary drink equipment that you supply to the C&G channel are the best selling/most popular, and why?

[WR]: In Canada, the FCB slush dispensers are the most popular. The product is extremely popular with high consumer demand and popular with retailers because of its high profit margin of approximately 60-70 per cent profit. Fountain pop is making a resurgence in the c-store channel due to better quality equipment and some of the larger chains promoting it strongly. We also provide non-carbonated units (FUB) that make ice coffee, available in different capacities.

[F]: The A1000 is the perfect solution for high-volume establishments that want to provide a wide variety of espresso-based beverage options to their customers. This machine can keep up with the highest demand, has the capability to offer two milk types and up to six different flavours. Its touchscreen with custom screensavers and video capabilities provides a great opportunity for operators to educate customers on available drinks and other in-store offerings.

[TFI]  Taylor Model 349 FCB machine is the most popular as well as the best selling. Extremely fast dispensing, ease of operator use and unmatched field life – the average field life of that machine is 10 years of profitability.

What are the trends/innovations in dispensary drinks and how are you responding to them?

[WR]  The biggest trend is more options for flavour and type of drink. Like the bottled category, it’s about selection. In terms of innovation, the incorporation of new displays in product control and dispensing, with the opportunity for companies to download their own advertising, like an IPAD screen, is awesome technology. Equipment has also come a long way in terms of it being easier to use and maintain. Our Viper FCB units are fully sealed so no chance of any contamination, hence a safe, great tasting product. A longer operational lifespan with less maintenance means cost savings for the retailer.

[F]:  Limited Time Offers (LTO) trend at different times of the year. Our machines can make Pumpkin Spiced Lattes, Peppermint Mochas, Gingerbread Lattes, and any other LTO an operator would like to select to satisfy those LTO cravings. Additionally, we see a trend in cold foam. The side fridges with our machines feature FoamMaster Technology, which has the capability to make both hot and cold milk foam. Internet connectivity of our equipment enables the retailer to gather real-time sales figures, machine status, payment systems and pay per beverage option right at the machine.

[TFI]: The most successful programs are self-serve – today’s consumer likes to be in control of the purchasing experience and self-serve allows this. In case of FCB, consumers like to mix flavours for a bold and colourful beverage.

What work is required on the retailer’s part to ensure a successful dispensary drinks program?

[WR]: The biggest effort on a retailer’s part is to perform the required maintenance to ensure a quality and safe product is served, and to ensure the longevity of the equipment.

[F]: It is important to get staff support of a new coffee program to ensure success, or assign a coffee champion at your location. Operationally, the retailer should focus on store configuration and best placement for the equipment that will allow easy use. The retailer should also make a conscious effort to educate their customers on their coffee offering to gain momentum, through marketing, sampling, appropriate lighting and signage.

[TFI]: Regular maintenance for each piece of equipment is an absolute must – whether it’s daily cleaning or a quarterly tune up.

What support do you offer C&G retailers to ensure a successful dispensary drinks program?

[WR]: Preventative maintenance programs are available. Training is done at install as well if the site wants to perform the maintenance themselves. Parts and labour are readily available with a toll-free service line covering all across Canada.

[F]: Franke offers training, service and maintenance support through a vast network of service providers across North America.

[TFI]: Every piece of equipment from TFI includes installation, start up and regular training by our factory trained technicians. All our service events carry warranties.

What should a retailer consider before committing to a dispensary drinks program?

[WR]: A retailer’s location and its demographic should be considered. Schools, sports fields, office buildings in close proximity are advantageous. A dispensary drinks program adds profit to an existing foodservice program, such as hot dogs and deli sandwiches.

[TFI]: A turnkey specialty coffee/bean-to-cup program would occupy about 36” of counter space, while a Taylor Model 349 needs 40” of floor space.

What should a retailer watch out for with a dispensary drinks program?

[WR]: Cleanliness around the equipment is always a concern. Like anything else, the area needs to look organized and be clean at all times. Eye appeal is huge.

[TFI]: Properly maintained equipment with the right marketing strategy is nothing other than a home run. There is waste and spillage with any foodservice product, but the tremendous profits (+70 per cent) and the extended field life of the equipment, coupled with the popularity of the categories, make a huge profit generator for the operator.

What advice would you offer a retailer considering a dispensary drinks program for their store?

[WR]: Self-serve is a big growth area in the c-store channel and is perfect for retailers looking to increase their profitability. My advice is to ensure cups and lids for dispensary drinks are organized and clearly marked.

[F]: Now is the time to elevate your traditional drip and espresso-based beverage programs to maximize sales.

[TFI]: Unquestionably, self-serve drives sales. Pay attention to your profit centre – wipe up spills and keep the equipment full so customers can buy the product.

Overall, we learned that dispensary drinks in the C&G channel is BIG – a big growth category, big in product and flavour innovation and that operators can sip and slurp a big profit margin.

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