More than meals: Sonic touts its drink combos

With 'ultimate drink stop' campaign, fast-feeder tries to grab snack-time crowd

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With a mind-boggling 168,894 custom beverage combinations, Sonic is hoping to separate itself from quick-serve rivals by positioning itself as the "Ultimate Drink Stop."

It's a fitting moniker for Sonic, known as much by regulars for its multihyphenated drink options as its old-fashioned drive-up service, where carhops on roller skates serve orders at your vehicle.

While V. Todd Townsend, Sonic's VP-chief marketing officer of 10 months, concedes some chains and convenience stores offer ways to customize drinks, he claims there is no other "national brand that will customize every drink that goes out the door and that has the multitude of combinations and ability to customize the way that we do."

Drink sales are important to the industry-84% of all of all restaurant visits include a beverage, according to NPD Group. But drive-through chains such as Taco Bell have found in recent years that customers don't always buy drinks if they're taking their food to a destination rather than eating on the run. But Mike Smith, restaurant analyst, Oppenheimer and Co., estimates about 10% of sales at Sonic are beverage-only.

Other chains, such as McDonald's and Culver's, are aiming to boost average checks with dessert offerings rather than drinks. Darren Tristano, managing director, Technomic Information Services, however, expects rivals to take notice of Sonic's push into the in-between-meal times now owned by Starbucks. "There are people that don't drink Starbucks," said Bobby Merritt, a Sonic franchisee for 34 years with 140 drive-ins. "People think of coffee, they think of Starbucks. We're a place to go for drinks or a treat." Among the regular requests he gets are Suicides, with a shot of everything, and chocolate-cherry Cokes.

growing sales

With more than 3,000 units, mainly south of the Mason-Dixon line, and sales of $3.1 billion at the end of last year, Sonic is the country's 12th-largest restaurant chain and fourth-largest burger chain, according to Technomic. Same-store sales grew a brisk 6% in Sonic's fiscal year 2005.

Sonic drive-ins feature up to 11 different fountain beverages. Then there are the flavored syrups, juices, fresh fruit and candy mix-ins (see box). Menu boards encourage customizing and show how to do it.

"Instead of just getting a Diet Coke, they get a Diet Coke with fresh lime," said Mr. Townsend. He said the majority of drinks sold are customized, with cherry limeade the most popular.

Sonic doesn't break out its beverage-marketing support by line. But its media budget is $145 million, up $20 million from the year before, split equally between national broadcast and cable TV.

Through its agency, Barkley Evergreen & Partners, Kansas City, Mo., the chain is using at least two TV spots that continue the chain's improvisation-based campaign by allowing actors to make up the script based on a couple of required elements. In one spot, characters Pete and P.J. try to up the ante on their drink orders with bizarre combinations. "It feels very off-the-cuff, and yet it perfectly describes that moment of 'What do I want right now?"' said Brian Brooker, CEO-chief creative officer at the agency. Other elements include radio, outdoor and interactive efforts.

Beverages drive high profits in the fast-food sector-four to five times the margin of a high-value sandwich, said Dennis Lombardi, exec VP-food-service strategies for consultant WD Partners. "Most companies make a few cents off products on dollar menus, but they can make a 60% to 70% margin on soft drinks," he said.
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