According to the National Restaurant Association, food and beverage outlays for restaurants were up 21.8 percent in 2022, while labor costs rose 18.3 percent. This left operators with little choice but to raise menu prices.
Unfortunately, consumers are dealing with inflation as well. That means higher menu prices have led to a decrease in foot traffic. This has forced operators to be as creative as ever when designing their menu—food and beverage has to be affordable, easy to execute, and something the consumer can’t necessarily replicate at home.
Frozen beverages offer operators a solution. They are also established, well-loved menu items—consider wildly popular LTOs and menu mainstays at Taco Bell, like the Mountain Dew Baja Blast Freeze, or the slew of signature frozen drinks served by coffee brands like Starbucks and Dunkin’. These are items that would be challenging for somebody to make daily in their own kitchen, making them a great way to drive foot traffic.
Frozen beverages are also operator friendly in that the margins on such items are robust. Frozen Beverage Dispensers (FBD), a leader in the frozen beverage space, reports that retailers can generate profits up to 80 percent from these frozen treats.
“Especially with the younger generations, one of the biggest consumer trends is specialty beverages,” says Ed Robinson, President of FBD. “It’s all about premiumization and customization. And when you’re offering something that is perceived as premium, you can charge a little bit more for it.”
So what’s the catch? If customers love frozen beverages and they are proven to be profitable, why would some quick-service restaurants not offer them? For one, it’s possible that some operators may associate frozen beverage machines with being messy and requiring more maintenance than a beverage fountain, but that’s not necessarily true.
“Our machines are self-sufficient, which is a huge win at the store level,” says Chris Parks, senior director of sales of the QSR channel at FBD. “They are just like a fountain beverage machine in that they use a BiB system—and they only require a wipe down once per day, cleaning the filter once per month, and service once per year.”
Operators may also believe a frozen beverage program requires more labor than a fountain beverage program. With The Association reporting that 86 percent of restaurants are now spending more on labor than they were pre-pandemic, restaurants have been streamlining operations to do more with less.
“Some frozen drink programs are really complicated,” Robinson says. “They’re hard to execute, especially if you’re dealing with turnover and constantly having to train people. Our equipment makes it so easy to serve an exciting, profitable drink. It is really just as simple as the fountain beverage program they are used to operating.”
Best of all, operators can use FBD's solutions to tap into all types of trends. They are compatible with both Coke and Pepsi products, meaning operators may not even have to change distributors to bring in new and exciting beverage products. The machines can generate alcoholic beverages, like margaritas, or combine up to 16 different flavor combinations.
“As the innovation leader in our industry, our dispensers offer some very unique features to provide additional product variety,” Robinson said. “Our multi-flavor dispensers allow you to create a very unique tasting—and looking—beverage by mixing in a variety of colorful flavors to the base flavor of your choice. We’ve seen a lot of success with frozen lemonade and the option to mix in the colorful flavors like strawberry, blueberry or many other options.”
Parks and Robinson estimate that serving just 20–25 frozen beverages per day can be a profitable program for quick-service restaurants. The machines can pay for themselves in 2–5 months. At a time when restaurant operators need to find any possible way to generate foot traffic during various dayparts, frozen beverages offer a great solution.
“Frozen beverages are a fun, affordable treat for the consumer,” Parks says. “It’s something they can’t make at home, and it’s highly profitable for the operator. It’s a win-win in that way. This is something that’s been around a long time. It’s a proven revenue stream that can be done fairly easily and generate a lot of foot traffic for retailers.”
For more on Frozen Beverage Dispensers, visit the company’s website.