What's all the fizz about? Brands invest in fountain innovations

Canadians are thirsty—for fountain pop. In the 12 months ending December 2025, they drank 427 million fountain soft drinks, according to the Ipsos Foodservice Monitor. That’s up 6% from the previous year, making fountain drinks the top-selling cold beverage in foodservice.

The surge hasn’t gone unnoticed at Tim Hortons, the country’s largest quick-service restaurant chain, which is rolling out fountain drink dispensers at select locations nationwide. Using Coca-Cola Freestyle units, customers will be able to choose from flavour combinations of Coca-Cola, Diet Coke, Fuze and other brands via touchscreen. 

Speaking on the company’s fourth-quarter and year-end earnings call in mid-February, Axel Schwan, president of Tim Hortons Canada and U.S., said the machines will “play a key role” in driving more combo sales.

He also noted that cold beverages are taking a bigger share of the chain’s drink business. They accounted for 27% of beverage sales in the fourth quarter of 2025—up 8.6% year over year despite colder-than-usual December weather, and the highest fourth-quarter share on record.

“In the world of foodservice, beverages are having a bit of a comeback,” says Emma Balment, director in the food and beverage group for market strategy and understanding at Ipsos.

Despite high inflation, she says, “2025 saw beverages bought for immediate consumption grow across most foodservice segments: convenience, grocery, full-service and quick-service restaurants.” Coffee shops were the outlier.

“The immediate-consumption beverage customer is driving growth for the convenience channel across a variety of categories, including luring the loyal coffee consumer away from those coffee shops,” Balment adds.

While quick-service restaurants account for most fountain soft-drink growth, convenience stores have been moving further into foodservice. Still, fountain drinks are lagging behind other cold beverage formats in that channel.

“Fountain soft drinks are not keeping up with the trend at c-stores, where customers are flocking to their more preferred formats for cold beverages: bottled, slush or canned—in that order,” she says.

Balment suspects this is partly because many convenience stores have focused on promotions pairing canned and bottled drinks with snacks such as potato chips and chocolate bars.

“C-store beverage customers are increasingly deal-conscious, jumping their deal rates up by five points versus a year ago,” she says. “Those can-and-bottle bundle deals flagged across coolers may be having an impact.”

As convenience stores continue innovating to compete with quick-service restaurants for the “cheap and cheerful” occasion, she says retailers may want to reassess their fountain programs.

Beverage manufacturers are also stepping up their fountain initiatives in Canada.

Keurig Dr Pepper Canada (KDP Canada) has launched a new program, though its main focus for convenience stores lies elsewhere (see sidebar).

PepsiCo Canada is also investing in fountain drinks, highlighting their ability to reach a broad customer base.

“Fountain beverages play an important role in meeting the needs of a broad and diverse consumer base,” says Emily Sweet Kretz, general manager of away-from-home operations at PepsiCo Beverages Canada.

“Zero-sugar options resonate strongly with generation Z and millennials, while diet beverages continue to hold relevance with older consumers,” she says. “Our diverse flavour portfolio—across brands like Mountain Dew, Brisk, 7UP, Crush and Mug—also supports strong food pairings.”

That’s an important consideration as convenience stores expand their foodservice offerings and compete as a destination for meals and beverages.

PepsiCo is counting on fountain drinks as a driver of overall beverage growth.

“We see strong alignment between fountain preferences and bottle and can innovation, with taste, refreshment and flavour being the top drivers across both,” says Sweet Kretz.

“It also allows consumers to sample flavours and build affinity, which can drive purchases of other formats in channels such as grocery.”

In partnership with convenience retailers, PepsiCo provides “a range of merchandising and promotional tools,” she says.

These include digital screen takeovers in stores, social media assets highlighting exclusive flavour launches, and signage around fountain or frozen beverage machines.

“In select cases, we also collaborate on custom or limited-edition cups tied to broader brand programs or product launches to help elevate the in-store experience,” she adds.

For convenience retailers, the opportunity is to align with this foodservice trend and expand retail offerings to include high-margin fountain beverage programs.