6 Ways to Boost Your Beverage Business

Teas, customization and drinks-only retailers are impacting the traditional c-store beverage business.

6 Ways to Boost Your Beverage Business

October 2023   minute read

By: Pat Pape

Ever since the first red metal soda box was placed in front of a neighborhood grocery store, retailers have relied on beverages to attract customers and increase sales. That continues as today’s health-conscious shoppers seek new forms of refreshment. Here are six trends that are taking off in both convenience stores and emerging drinks-only retailers.

Americans Heart Iced Tea

Although tea itself is nearly 5,000 years old, the United States is credited for inventing the tea bag and popularizing iced tea. It’s the only country that consumes most of its tea chilled (about 80%), according to the Tea Association of the USA.

In Texas, iced tea is big business—Texans practically sweat iced tea. It’s why several retailers in the state are capitalizing on their customers’ thirst for the beverage—sweet or unsweet.

Fort Worth-based HTeaO is a “QSR beverage-only store” with a drive-thru, according to CEO Justin Howe. “We wouldn’t consider ourselves a competitor to the convenience store by any stretch, although there is a convenience factor,” said Howe. “We sell 26 flavors of iced tea and lots of it. It’s high-quality, fresh-brewed, broad-leaf tea that we make in-house all day every day.”

HTeaO purifies its water with a reverse osmosis system and then, according to the store, polishes the water with minerals to make its tea stand out. The store also uses the same water for its ice, which comes to order, either cubed or crushed.

There’s also a secret menu on HTeaO’s website with flavors like cotton candy, violet or wedding cake. One thing customers won’t find at stores are tables and chairs—HTeaOs are for grabbing iced tea on the go.

When Starbucks began selling coffee in a freestanding walk-in café, “Everyone said ‘These guys are idiots. They’re just selling coffee.’ But that’s what we’re doing,” Howe said. “We took iced tea out of the chicken restaurant and made it the primary focus for our entire existence.”

Today, HTeaO has 80 stores, mostly franchised, located in Texas, Oklahoma, New Mexico, Florida and Kansas, and another 100 under construction.

Consumers love iced tea. That’s why two Texas-based companies are betting that their tea-focused drive-thru stores will be a big hit.

Would an iced tea-only concept work in a colder region? “We decided that Interstate 40 is probably our northern boundary,” Howe said. “But we have stores in Wichita, Kansas, so we’re already violating that rule.”

Lubbock-based Tea2Go TeaN’ergy is another drive-thru focused on tea, along with propriety energy drinks. “We have 45 different loose-leaf teas that we brew in the store and sell for take-home use,” said Stephanie Chavez, CEO. “People are so health-conscious now, and tea is an alternative to soda, but we do have a tea with carbonation that tastes like a cherry-flavored soda.”

Chavez is sold on the positive benefits tea provides. “Oolong tea helps break down carbs and sugars. Green tea and white tea are high in antioxidants,” she said. “We have all types of herbal teas that target certain health issues.”

When Chavez acquired the business in 2018, the chain had five stores. The company began franchising in 2019 and now has 35 locations, all in Texas. Tea2Go is moving into Colorado and New Mexico and plans to have 50 units by the end of this year.

At Curby’s Express Market, based in Lubbock, customers will find 20 linear feet of iced tea. Along with standard black tea, the retailer sells 20 different tea flavors, such as apple pie and blackberry jasmine, and each beverage is available sweet or unsweet.

“I have 40 tea dispensers and a team that makes iced tea all day,” said Tony Sparks, head of customer wow for Curby’s. “In the summer, we sell 600 to 800 teas a day. One Wednesday, we did a 24-hour promo where we offered a cup of iced tea for $1, a half gallon for $2 and a gallon for $3. All we did was announce it on social media that morning, and we went from 700 customers to 1,300 in one day. If I want to double my customer count tomorrow, all I have to do is run a special on tea.”

Bubble Tea

Cold, sweet bubble tea, also known as boba tea and pearl milk tea, appeared in Taiwan in the 1980s and was an immediate success. The word “boba” refers to a broad category of chunky drinks, according to Eater, which includes “everything from iced tea with tapioca pearls to fresh juice loaded with fruity bits.”

The drink’s popularity has spread. According to IBISWorld, there are now more than 3,600 bubble tea shops in the United States, an increase of 21.2% over 2022. Available in 200-plus flavor combinations, bubble tea features the health benefits of green and black teas. Originally marketed to females, the drink is starting to win male fans.

In May, Sheetz announced that its mango-flavored boba tea, with popping pearls as opposed to the traditional tapioca pearls, would roll out to all its stores. Wawa sells “popping bubble” tea in flavors like dragonfruit lemonade and mango lemonade.

Don’t be surprised if more convenience retailers jump on the bubble tea trend. Allied Market Research says the bubble tea market, valued at $2.4 billion in 2019, will hit $4.3 billion by 2027.

Craft Sodas

Two years ago, Pennsylvania-based Rutter’s gave customers more choices at the fountain by adding craft drinks from Sunny Sky Products in flavors like pineapple cream and homestyle lemonade. The retailer also offers its proprietary birch beer at the fountain. The non-alcoholic drink is a carbonated soda made with herbal extracts and birch bark, said Chad White, food service category manager.

Whether canned or from the fountain, craft sodas are made in small batches using natural ingredients and cane sugar instead of high-fructose corn syrup. As a result, consumers haven’t balked at paying a higher price.

If I want to double my customer count tomorrow, all I have to do is run a special on tea.”

“Craft sodas mix natural flavors and unique flavors, creating an attractive pairing for younger consumers who are seeking better-for-you options with flavor combinations that still feel somewhat familiar,” said Isabel Atherton, director of marketing for Sunny Sky. “Craft soda at the fountain allows c-stores to expand dispensed beverages beyond leading national soda brands, not to displace but to offer a complementary alternative.”

For now, the craft soda category is small compared to carbonated soft drinks. In 2021, the size of the global craft soda market was valued at $651.3 million, according to Grand View Research, but it’s expected to grow at a compound annual growth rate (CAGR) of 5.0% through 2030.

Made to Order

Self-serve coffee is fast and convenient for consumers and retailers. Starbucks helped pave the way for the reality that even the busiest customers are willing to wait for a cup that’s made exactly how they want it.

At Curby’s, discerning customers can get a cup of coffee made to their specifications with a variety of flavors, toppings and add-ins. “Our menu depth is about the same as Starbucks,” said Sparks. “But all our growth is coming from the other stuff that Starbucks doesn’t do.”

Curby’s customization doesn’t stop with coffee. The chain also offers a generous selection of proprietary energy drinks and sodas. “Our beverage sales far exceed what we thought they would,” said Sparks. “And our customer experience is different from that of the traditional c-store, which is one reason we skew heavily with women.”

Rutter’s also offers made-to-order hot and cold beverages, which “broadens the reach of our program,” said White. The chain uses high-quality ingredients but keeps drink prices competitive. “This has allowed us to gain customer traction in this category and build out the program even more,” he said.


Last year, sales of no- and low-alcoholic beverages that are traditionally alcoholic jumped by more than 7% in volume across 10 key global markets and topped $11 billion in market value, according to IWSR Drinks Market Analysis. That’s up from $8 billion in 2018.

These pronouncements aren’t lost on Chavez of Tea2Go. “We’re working to be one of the first drive-thrus to have a tea-based mocktail option,” she said. “By the first of next year, we’ll have more of an idea of what we’ll be doing. We have a passion for tea, but it’s a business.”

Beverages in Bulk

Cans, cups and bottles are great, but if you’re serving a crowd, you need a bigger container. Few convenience stores offer bulk beverages, but that service is proving profitable for some retailers.

Today, 56 Rutter’s stores sell frozen Spiked Slushies in 20-ounce cups and also in 64-ounce and 128-ounce containers for parties and events. The drinks come in several flavors, ranging from assorted fruity margarita-styles to a version made with wine.

We’re growing our heavy-user customer base through drinks, not food.”

Sip Fresh, a new beverage-only chain with outlets in Arizona and California, offers fresh juices prepared in-store by employees known as “sipistas.” Customers may purchase individual servings or one-gallon and two-and- a-half-gallon barrels of the juices for meetings and parties.

This marketing concept has legs, according to White. “We’ve looked at other options to sell in bulk but have not made any moves,” he said. “With online ordering and mobile becoming more prevalent, this will certainly become more of a priority.”

Positive consumer response to today’s beverage innovations, plus the growth of beverage-only outlets and Curby’s own success with enhanced and customized beverages, has Sparks thinking.

“When I attend foodservice conferences, there is very little discussion of the beverage part of foodservice,” he said. “But I expect that to change. Everyone has been saying that through foodservice, c-stores will drive more traffic. But I believe that beverages will drive traffic and help food sales—not the other way around.

“Consumers change up the places where they eat every week, but where they buy their beverages doesn’t really change,” he added. “We’re growing our heavy-user customer base through drinks, not food.”

Pat Pape

Pat Pape

Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.

To provide complete functionality, this web site needs your explicit consent to store browser cookies. We recommended that you "allow all cookies" so you may be able to use certain features, such as logging in, saving articles, or personalizing content.