Convenience retailer Circle K embraces 450,000+ beverage subscription customers with their “Sip & Save” program.
Innovations in fountain and drink dispensing technologies offer customers sleek digital displays and other innovations. One of the hottest trends foodservice providers and convenience retailers are investing in now are mobile app-powered beverage subscription programs.
In May of 2021, Circle K launched Sip & Save, a program offering beverage subscription customers one daily fountain, tea or frozen beverage including iced coffee, for just $5.99 a month. Their success in the convenience retail industry is one that just a few retailers have embraced signaling the opportunity is ripe for ambitious, forward-thinking retailers. One other large U.S. retailer to hop on the beverage subscription trend include Pennsylvania-based Sheetz who offers unlimited beverages for $14.99 per month.
Panera Bread, one of the founding retailers of this beverage subscription craze, recently expanded its unlimited coffee program to include all dispensed beverages for $10.99 in May of 2022. By the end of 2021, two years into the coffee program, Panera had more than 300,000 paid subscribers.
According to Forbes, “recurring revenue has been boosting sales at Panera since many subscribers end up frequenting its restaurants more often and buying more items to accompany the beverage. Hence, its coffee club subscribers frequented its eateries at eight times higher visits than in the past and 30% of them added a food item to their check.”
Cold Dispensed Beverages Are Huge Profit Drivers
Serving restrictions and lower customer traffic from the pandemic are thankfully in the rear-view mirror as life for most returns close to pre-2020 times. Foodservice and beverage sales in the convenience and foodservice industries surely have rebounded to pre-pandemic levels as people continue to return to regular activities. According to NACS Daily, the NACS State of the Industry Report for 2021 Data reported sales of cold dispensed beverages improved in 2021 as consumers returned to the beverage fountain to seek out their favorite self-serve drinks. Average sales of cold dispensed beverages grew 7.4% on a per store, per-month basis in 2021.
Further, Mintel recently reported that carbonated soft drinks make up the nation’s largest non-alcoholic beverage category, topping $39 billion in sales. But Mintel also cautioned that the category will remain stagnant if consumption frequency among lighter users doesn’t grow.
Convenience Customers are Ready for Fountain Subscription
Customers stop at gas stations and convenience stores to buy fuel, for beverages and snacks and to use the bathroom, essentially in that order of priority. A NACS survey of gas-buying customers found that half went into the store while half left just after filling up with gas. Of those that went into the store, 42% went in to buy a beverage and 37% went in to buy a snack.
Case in point, Convenience Store News reported in July 2022 that the Circle K Sip & Save subscription program has more than 450,000 active subscribers enrolled as beverage subscription customers. That’s just a small fragment of the 165 million customers that convenience stores across the country serve every day signifying a massive opportunity.
Circle K has certainly realized that subscription programs are more than guaranteed monthly revenue, it can be a profit driver for other categories in and outside the store. In Q4 2022, for the three-month period, same-store merchandise revenue increased 2.3 percent in the United States. In addition to the popular Sip & Save program, Circle K offers a profitable unlimited monthly car wash subscription program in the U.S. and Canada and expanding globally.
Capitalize on The Subscription Beverage Program Trend
Consumers value choice and having the option to select and customize their drink choices can be an absolute treat. And, embracing the routine and familiarity to find one’s favorite beverage at the exact right time of cay can also make someone’s day a little brighter.
Whether the customer is a child wanting to create their own special cola+sport drink+lemon lime+root beer concoction or a stalwart morning diet cola drinker, offering a worry-free subscription program makes beverage subscription customers of all ages happy. With 92% of consumers constantly looking for great value deals, the idea of unlimited fountain beverages every day from a favorite local convenience store for one fixed fee makes great business sense.
The opportunity is loud and clear that customers can certainly be enticed to buy a food or beverage and with the right marketing and technology, retailers can not only increase in-store foot traffic but convert those thirsty shoppers into frequent customers. Additionally, it is likely that beverage subscription customers will leave a store with more than just a fountain drink. And further yet, retailers can transform impulse buyers into automatic customers, ensuring they stick with their subscribed store over competitors.
About Liquid Barcodes
Liquid Barcodes is a leading global loyalty and digital marketing technology company specializing in the convenience and foodservice industries. The proprietary, cloud-based technology platform allows retailers to create and manage their digital marketing campaigns with a process called the “customer connection cycle’ to engage, promote and reward customers’ activities in real-time across digital and media channels.
Liquid Barcodes loyalty platform is powering loyalty programs for industry leaders across several global markets, by offering unique subscription, mobile payment programs, machine learning, personalization, gamification, loyalty, and other capabilities.
Learn more about Liquid Barcodes at LiquidBarcodes.com.
About the Author
Carolyn Schnare, Chief Content Officer, Liquid Barcodes
Carolyn Schnare has been involved with the convenience retailing industry for two decades with extensive knowledge of customer engagement and marketing, sustainability, and community outreach. Prior to Liquid Barcodes, Schnare worked at NACS (National Association of Convenience Stores) in a variety of roles from event production to membership and most recently as Director of Strategic Initiatives and host and producer of the popular industry podcast, Convenience Matters. Schnare currently anchors the popular Shop Talk LIVE! video series produced by Global Convenience Store Focus media group.