The other day in the news I read about a new concept that Starbucks has introduced called the “Mini Frappuccino.” This new 10-ounce size treat apparently increased overall store sales in test markets. The “mini” (obviously) means less calories and sugar versus the current Frappuccino menu offerings – small (“tall”), medium (“grande”) or large (“venti”). It’s unsurprising that in a time when more consumers are paying attention to what they put into their bodies, many would opt for a smaller, “healthier” version of their favorite beverages.
In fact, the article notes that the idea of smaller size portions sizes is happening elsewhere in food and beverage segments. Have you seen the 7.5-ounce Coca-Cola cans? How about the Sonic chain’s mini ice cream shakes and (limited time offer) of mini hot dogs and chicken sandwiches?
Operators and suppliers in our channel have interesting benefits and risks to consider:
Benefits
- It is a good idea for us (as a society and as individuals) to “eat healthy” – whatever that means to each of us. Smaller portions (or serving sizes) are one approach recommended by nutritionists and medical experts – my own doctor included.
- In our business, an increasing number of our clients are demanding that we offer “healthier” selections. The benefits are easy to see – the people who purchase our food, snacks and beverages have a more varied and “better” set of choices each day.
Risks
- One risk for operators is that the smaller size packages will sell at a lower (retail) price point. So even if we serve the same number of packages daily, total sales will likely be lower than before.
- Another risk is that sales of BFY (better for you) products would cannibalize traditional products. In that case total sales dollars will likely increase (since many of these SKUs are more expensive). BUT, the higher price point might mean that people will purchase less frequently, possibly reducing overall unit volume and dollar sales.
Many micro market operators have enjoyed the very positive surprise of selling more higher-priced SKUs across all categories – products they might have never considered for their vending product line up.
My advice would be to pay attention to what restaurant chains are doing with mini products and keep up with new product introductions from suppliers in our channel. Additionally, it’s a good idea if you don’t already to watch the convenience store channel too. It seems likely that there will be more mini products in the news.
It will take very shrewd thinking about products to be offered and pricing strategies. This is a potential tipping point for our industry.
