Restaurant operators participating in product tests of Coca-Cola’s new Freestyle fountain dispensers say despite some challenges, including retrofitting operations and consumer training, beverage sales have increased steadily since installing the high-tech machines.
The Freestyle System uses touch-screen technology and dispenses 106 variations of drinks, including combinations of different sodas, water and flat beverages, a big departure from the traditional soda fountains that offered only six to eight flavors.
After undergoing beta tests in 50 stores from September 2009 to April 2010, the Freestyle dispensers are now in a second phase of testing, according to the Atlanta-based Coca-Cola Co.
Foodservice executives at Stevi B’s Pizza and Firehouse Subs, which have participated in tests of the Freestyle system, said the dispensers' sleek design and ability to serve a variety of flavors, as well as the interactive nature for customers, have resulted in a surge of drink sales.
Stevi B's chief executive Matt Loney reported an increase in takeout beverage sales at the three stores that began using the system in late June. He said nine of his pizza-buffet restaurants are involved in the second round of testing.
“I can tell you, and this is kind of interesting, that we offer [special] to-go cups as an upsell, and in the seven days before [we put in the machines] we sold 29 cups,” he said. “In the four days since June 23, we sold 133.”
Firehouse Subs chief executive Don Fox said the amount of in-store dining has increased since the machines were installed at stores in Atlanta last September.
“We’ve got more people eating in the restaurants,” he said. “We’re up 3 percent, which is important for our brand. The consumer loves [the machine]; we’ve sold more soft drinks because of it. I do know that we’ve seen an increase in fountain sales as a percentage of our beverage mix. Our soft drink incidence is up about 5 percent.”
Slow pours, ice dispensers some challenges to overcome
While the machine has helped restaurant chains increase beverage sales -- a large part of any foodservice operation and the most margin friendly -- some challenges do exist, executives noted, including longer pour times and a smaller ice machine.
According to Coke, the pour time for a first-time user is about 26 seconds, but repeat customers average around 17 seconds per pour.
“The queue is a little long, but it does seem like people are figuring it out pretty quickly,” Stevi B’s Loney said.
Fox also noted that lines for the machine can be long, but that customers had yet to complain.
The executives from Stevi B's and Firehouse Subs also said there were challenges involved in the switch to the new dispensers. They had to retrofit their drink counters to accommodate the Freestyle system, which is narrower and taller than traditional dispensers, and the ice machine required some changes to operations.
The ice machine is smaller, Loney said, “you either have to hand-load it or buy a new icemaker so there certainly is some cost."
Fox of Firehouse Subs also cited the ice as a challenge in using the new dispensers.
“We had a little issue with the ice dispensing,” he noted. “There was too much spillover since it’s such a small area. And since you don’t have the same amount of space as normal, you can’t afford to let anything accumulate. That was the one technical glitch we ran into.”
Loney and Fox both said the Freestyle system works well for their specific operations, however. Stevi B’s estimated a return on investment at stores where retrofitting occurred to hit about 70 percent. At new locations or if construction is not an issue, the company expects to achieve a much larger return.
“For us, this was as much about being the right fit with our system as it was additional Coke purchases,” Loney said. “Being a buffet [operation], the customers interact with the [soda] machines. To be able to roll out a machine that has 106 flavors is a good marketing fit for us. It expands the flexibility we provide to our customer base.”
Added Fox: “We’re more fast casual, and dining times are longer [for us] so it’s really a good fit in our case.”
Coke's fresh take on soda
Gene Farrell, Coca-Cola’s vice president of jet operations, said the new technology behind the Freestyle is the result of the company's search to expand its foodservice business, which he said was limited by the traditional dispenser equipment.
“The business model hadn’t changed in years," he said. "We could only offer six to eight choices and knew we had different tastes to feed, but didn’t have the ability to deliver in the foodservice environment.
"We realized we couldn’t do it through incremental change; we had to think about reinvention," Farrell added. "So we looked at other technologies in the marketplace to revise the dispenser technology and realized if we brought together dispensing and packaging technology we could reinvent our restaurant-side business and give consumers the variety they are looking for.”
Farrell said the Freestyle dispensers were designed to allow for more interaction, upping the customer’s entertainment quotient.
“We spent a significant amount of time designing the user experience,” he said. “While the actual transaction time takes a bit longer, it hasn’t had an impact on the customer’s perception of or overall speed of service.”
Contact Elissa Elan at [email protected].