Convenience stores looking to grow business cannot overlook beverages or Gen Z.
Gen Z orders 4.5 beverages per week from foodservice establishments, while the average consumer orders 3.5, Supper Co. co-owner Kesha Alexander said at CSP’s C-Store Foodservice Forum, held June 17-19 in Schaumburg, Illinois. Alexander, who owns the business with Kyle Drenon, cited data from CSP sister research arm Technomic, Chicago.
“Beverage is big business. You guys all know that,” Alexander said. Dirty sodas, carbonated soft drinks with added flavor syrups or creamers from companies like Swig, Dunkin’ and others are all the rage today—and consuming these beverages is not a special occasion anymore, Alexander said.
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“They’re an everyday, multiple-times-a-week occasion that we have to capitalize on in order to win,” she said, adding that four of the 12 fastest-growing chains—Dunkin’, Panera Bread, Sonic and Starbucks—on Technomic’s top 500 list specialize in beverages.
“And the reason for that is that Gen Z is obsessed with beverages, and Gen Z is also expected to be the wealthiest generation,” she said. “By 2030, they’re supposed to have $12 trillion in spending power. They are going to make waves. They already are.”
Because of this, the top chains are paying attention and getting into specialty beverages, Alexander said.
Under the TikTok hashtag #drinktok, many consumers are creating content “demonstrating how they are mixing new beverages in their house—or they’re going to pick up beverages at different places and they’re making videos about it,” she said. “These beverages are craveable, colorful, they represent the individual, and people are identifying themselves based on what is in that cup.”
Alexander pointed out Taco Bell as one company moving further into this.
“They are testing Live Mas Cafe in Chula Vista, California, with a specialty beverage program where they are working to figure out how to roll that out,” she said, adding that Taco Bell has had 9% same-store sales growth, but in the Chula Vista market has enjoyed 40% sales growth selling 300 beverages a week.
“This is going to change the market for Taco Bell,” Alexander said. “They are coming for your beverage customer. They want it, and you guys have an opportunity to hold on to it by continuing to innovate in the category.”
Elsewhere, Pepsi’s dirty soda entry is Drips, she said.
“They are taking their entire beverage portfolio and mixing them in new ways and calling it a new platform,” Alexander said. “They’ve introduced eight specialty beverages, and they are rolling this out. They are finding new ways to meet the consumer demand in specialty beverage.”
Alexander added that Wawa, Pennsylvania-based Wawa has been “doing this for a while, and they are seeing that consumers want to move from prepared beverages to specialty beverages, and it is working for them.”
However, Alexanders added, “They’ve had to invest in all types of equipment, and not everybody can do that.”
At the flagship store of Worcester, Massachusetts-based Yatco, they have introduced a full dispensed-beverage program with lemonade, slushies, energy drinks and 20 soda products—and are touting their dirty soda line—“they’re just asking the consumer to come in and do it themselves,” Alexander said. “If we tell consumers that you can do that in the c-store, they will come. We just have to let them know that it’s possible.”
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