The May issue of NACS Magazine included an article, excerpted here, written with support from Vitamix, a NACS Hunter Club member. The complete article is available online.

Blenders have been around for more than 80 years, producing tasty ice cream treats—perennial favorites—and more recently, juice concoctions that have appealed to an evolving consumer palate that favors nutrition.

In response, dedicated smoothie shops have begun springing up at a strip mall near you, while grocery stores have begun preparing smoothies onsite, offering freshly made temptations that directly target the convenience store’s grab-and-go customer. While their appeal of smoothies doesn’t approach that of a coffee program, consumers are clearly trending away from sodas and toward drinkable whole foods.

Convenience store retailers can tap into this escalating foodservice opportunity by implementing a smoothie program—a low-cost addition to an existing beverage program that offers robust margins and healthy returns.

Far from an insignificant sales blip, the smoothie market (away from home) represents sizable opportunities, according to a 2015 Mintel Menu Analysis study:

• $14.8 billion annual sales (freshly prepared smoothie bought away from home market)
• 3.1 billion drinks each year (based on the 2015 Smoothie Tracker Fielded monthly by ORC International).
• Average sale of $4.77 per drink

Convenience stores lag far behind other channels in capitalizing on these sales, however, with just 7% and 9% of dollar and unit shares, respectively.

While the numbers point to market share opportunities for c-stores, more significant is the case for higher price points and margins. “The c-store numbers (whereby unit share exceeds dollar share) suggest that their average price is lower than the market [price] in general,” said Scott Hackman, business insights director for Vitamix. “Smoothies at smoothie shops and coffee shops can cost up to twice as much as a smoothie at a QSR … It is clear that people are willing to pay extra for smoothies that align with the trends related to health and wellness and customization.”

In terms of demographics, convenience store smoothie buyers track gender-neutral, according to the 2015 Summer Smoothie Trackers study released by intelligence firm ORC International. With an even 50-50 split between men and women, smoothies rate highest among the key 25-34 age demographic (33.7%), followed by 18-24 (25.7%) and 35-44 (13.4%).

In contrast to most foodservice programs, a smoothie offering requires minimal cost and infrastructure for the convenience store operator. “For low volume locations, or locations that just want to dip their toe in the water of crew-serve smoothies, the only investment that they need to make is in a blender,” said Brian Harvanec, senior product manager for Vitamix. “And they just need a small amount of counter space for the blender and a refrigerator to keep their purees after opening.”

While aspirations for improved health are contributing to the smoothie’s ascending appeal, building a program that nurtures that interest is a matter of quality, Harvanec said. It’s not a matter of simply, “If you blend it, they will come; but rather, if you blend it well, they will come again.”

As with any new food and beverage offering, profitability and return on investment will attest to practicality. And no matter your program’s scale, smoothies offer generous margins, according to Harvanec. “In many cases, the cost of the equipment (per drink) will be less than the price of a straw,” he said. “Because smoothies require little capital investment and generally yield high margins, it doesn’t take many drinks per day to justify the addition.”

Jerry Soverinsky is a Chicago-based freelance writer. He’s also a NACS Magazine contributing writer.