Coke Freestyle Grows in C-Stores, Enters Tedeschi

Coca-Cola Freestyle, an on-premise soda delivery system that allows consumers to build custom tailored beverages, is gradually making its way into the convenience store channel and recently gained a new partner in Massachusetts-based Tedeschi Food Shops. The convenience store chain, which operates 190 convenience store locations throughout Massachusetts, New Hampshire, and Rhode Island, will initially install Freestyle units in nine of its locations in the greater Boston area, with the possibility for expansion in the future. Coca-Cola now has approximately 7,200 Freestyle machines in operation in 4,500 locations across the U.S.

Launched in 2010, Freestyle offers consumers the ability to choose from 100 regular and low-calorie brands, including mainstays like Coke, Diet Coke, and Sprite, as well as sodas that have never before marketed in the U.S., such as caffeine-free Diet Coke with Lime, Fanta Peach, and Minute Maid Light Orange Lemonade.  The machines feature an interactive touch-screen on the front allowing consumers to choose and pour a single beverage or mix and customize drinks to their liking. According to Coke, the technology behind the machines is proprietary, and the concentrated ingredients for the sodas are stored in MicroMax cartridges as opposed to bag-in-box syrup.

While Coca-Cola initially targeted restaurant chains for Freestyle, the cola giant began to test the soda fountain machines in convenience stores late last year and is aiming for continued expansion in the channel. In addition to Five Guys Burgers and Fries, Noodles & Company, and select Burger King locations, Freestyle is now installed at a number of Hess Express, 7-Eleven, and Daily’s stores and Coke has indicated that it will continue to wade into convenience stores. However, some c-store operators might be wary of the costs associated with the machines. According to the Atlanta Journal-Constitution, retailers are forced to pay an overall fee for Freestyle, one that covers a variety of costs including equipment, installation and service, as well a more expensive drink concentrate than used in traditional soda fountain dispensers. Moreover, convenience stores must make an exclusive commitment to Coke if they want to carry Freestyle.

Despite the higher costs, Coke has indicated that convenience stores are increasingly embracing Freestyle as it becomes more popular with consumers. In an article in Convenience Store News, Gene Farrell, the vice president and general manager of Coca-Cola Freestyle Global, stated that, “[Coke’s] early learning in c-stores is that consumer excitement is just as great as it is in the restaurant channel and that the company “is seeing significant lifts in dispensed, and [Freestyle] doesn’t appear to be cannibalizing packaged product.”