CSNC EXCLUSIVE: Frozen assets to deliver summer profits for convenience stores

As the mercury rises, c-stores are gearing up for the seasonal sales spike of slushies, one of the highest-margin categories in the sector. Experts estimate profit margins of 60% and higher.

But while frozen beverages have been a summertime staple for decades, the category has gone a little, well, cold.

“The slushie is a niche category, but it’s a mature one, tapping into nostalgia for many adults (please see sidebar). That gives it ongoing potential,” says Emma Balment, director, food and beverage group, market strategy and understanding, Ipsos. “But it hasn’t been performing particularly well for the channel compared to the years leading up to the pandemic.” 

According to Ipsos research, over the past nine years, soft drink slushie consumption is three quarters what it used to be in c-stores.

“Canadians drink over 56 million slushies per year,” says Balment. And while that number sounds pretty high, she says “it’s only a third the size of the slushed coffees they consume, which over the same time frame has grown by 60%.”

In recent years, she says QSRs have grabbed more of the market. Last summer, for example, Harvey’s partnered with PepsiCo Beverage Canada on $3 frozen beverage drinks, with options like Brisk Lemonade, Crush Cream Soda and Crush Orange.

“The largest swings in the category are driven more by promotional activity and limited time offers at top QSR chains,” Balment notes

A few years ago, she says QSRs were capturing 40% of all soft drink slushie and frozen lemonade sales. But with the sector having since deprioritized these menu items, QSR has since returned to holding about 18% of the market. 

Convenience, meanwhile, served 67% of all slush soft drinks in 2024, up from 56% in 2019. And it looks poised to command more of the market in 2025 and years to come, thanks in part to new entrants.

Take Frazil, a premium frozen uncarbonated beverage brand of fruit-based flavours from Freezing Point LLC, which was founded in Salt Lake City, Utah in 2004. Billing itself as the fastest growing slushie brand in North America, with over 40,000 machines across the U.S. in every state, it’s also now in Canada.

Each flavour of Frazil comes with distinct branding, with catchy names like Tiger’s Blood (strawberry-coconut) and Blue Razmatazz (raspberry) to Bermuda Triangle (banana, strawberry, peach) and P.O.G. (passion fruit, orange and guava). 

The brand is being rolled out to Shell Canada locations following a successful test pilot in Q1 with 14 locations, eight in Ontario, and two each in Manitoba, Alberta and Saskatchewan.

Freezing Point has also signed a contract with foodservice distributor Core-Mark in Canada.

Drew Dennis, national accounts manager including for Canada at Freezing Point, says its main program for retailers provides both the beverage machine to the store and all service maintenance, with cleaning only required once a month, as opposed to weekly for syrup-based slushies. 

“There is zero capital required in getting a Frazil program up and running,” he says. “All the store has to worry about is ordering the product flavour case, straws and cups through the distributor. We take care of the rest.”

With 10 flavours available to choose from, the Canadian locations will all be offering Tiger’s Blood, which is its top seller in the U.S., commanding a whopping almost 30% of sales. They’ll also have two or three other varieties on offer.

Freezing Point also offers Cafe Tango, a branded frozen coffee with over 4,000 machines in U.S. stores. Some of the Canadian stores will also be installing Cafe Tango machines next to the Frazil equipment.

Slushed coffee is an untapped opportunity for c-stores, according to Ipsos data. “QSR maintains a monopoly, as convenience has only been able to carve out 1% of that market,” says Balment. “But the slushie soft drink and slushie coffee consumer are quite similar to each other.”

“As c-stores have successfully carved out a competitive space for hot coffee from QSR, slush coffee seems like an optimistic new frontier for c-stores" she adds, especially given other investments by the category in food service.

Cambridge. Ont.-based Adept Food and Beverage is another provider of both iced cappuccino machines and slush mixes. “Iced coffee has even become popular with younger adults,” notes Jackson, president of Adept Food and Beverage. 

When it comes to promotions, stores are finding they can move even more volume on this highly profitable category.