Frozen Assets

frozen assets by gary vegaTo many, the term “frozen assets” carries a negative connotation, especially with today’s struggling economy. But to the innovative beverage director, “frozen assets” has a much more positive meaning. In fact, you could say it’s a potential recipe for success.

I’m not referring to assets held by your bank. I’m referring to larger deposits you can take to your bank! All you have to do to unleash these assets is create and promote your very own frozen drink program. Aren’t frozen drink programs difficult to manage? Don’t they require a large investment in equipment? Don’t most bartenders hate making frozen drinks? The answers are “No,” “No,” and “I seriously doubt it, especially if the tips are rolling in.”

I would assume that most on-premise operations have some type of blender on hand capable of making frozen drinks. It may be the Hamilton Beach® Commercial 908® blender which has appeared at one time or another in a great majority of bars and restaurants around the country.

Perhaps you have something a bit more powerful but have never aggressively put it to work creating great-tasting frozen drinks.

In this case your assets are, well, “frozen” as are your potential financial rewards. But what if you could, in a little over a week, cover the cost of purchasing the equipment necessary to properly introduce a frozen drink program, and create a highly-profitable new business platform that will pay off for the remainder of the year? This would not only unlock your assets but it would also unlock your creativity, as the flavor options for frozen drinks are endless.

You might be saying, “This sounds intriguing, but I need to see the numbers.” Well, for starters, millions and millions of cases of frozen drink mixes are produced and sold each year. Finest Call, Kerry, and Monin, to name a few, offer a wide range of products in delectable flavors such as margarita, strawberry daiquiri, piña colada, mango, banana, raspberry, and “hurricane,” as well a large assortment of frozen coffee-style drinks. Mixing some of these traditional flavors together to create such attractive options as strawberry colada, mango margarita, and banana raspberry is just the tip of the frozen drink iceberg. The only limit is one’s own imagination.

Now you might be thinking, “I like the way this sounds but don’t I have to also invest a lot of time and effort to launch a successful frozen drink program?” Like most things in life, you reap what you sow. The more you embrace the program, the more reward you will see. One important fact that is sometimes overlooked when considering a frozen drink program is the appeal of alcohol-free frozen drinks. This appeal is not just for anyone under the legal drinking age; we need to remember that not every occasion is an occasion to drink alcohol. This means that a successful frozen drink program will include options both with and without alcohol.

Although many operators have embraced the frozen drink concept in a big way, let’s look at two examples of how to get started without dramatically changing your overall beverage approach.

Option One – The Cautious Approach
This approach requires little effort or investment. Purchase 1 case of a premium drink mix, 3 liters of rum, an entry-level blender, and make a sign promoting frozen drinks. You can budget $100 for the blender, $50 for a case of drink mix, and $50 for 3 liters of a premium rum product. The total investment is $200. The mix and spirit purchased will make about 100 12-oz. frozen drinks. Using a $7.50 drink price, you would generate $750 in product sales on an investment of $200. This creates a profit margin of 73% when factoring in the cost of the blender, and 87% on all future sales. Selling only a dozen frozen drinks per day would generate almost $1,900 in extra profits over the course of the year.

Option Two – The All In Approach
This approach is much more ambitious: you commit to purchasing 6 cases of premium drink mixes in 6 distinct flavors, 2 cases of a premium rum product, and 3 high-performance commercial blenders similar to the Hamilton Beach® Commercial Tempest® blender. Then, you not only create the proper signage, but you also make sampling an integral part of the program. You do this by assigning 2 people to be designated Frozen Drink Ambassadors on each shift for the entire week of the program’s introduction. These ambassadors’ role would be to welcome each bar or restaurant patron, introduce the program, and place alcohol-free samples of the featured flavors on each table. They would then suggest to each guest of legal drinking age that these drinks could be made with alcohol. Try this, and watch your frozen drink business explode.

The second option is a bit more expensive on the investment side but dramatically more appealing on the profit side. Initially, the costs are about $1,200 for the blenders, $300 for the premium drink mixes, and $300 for the rum, for an investment of $1,800. Additionally, you’ll need to consider the designated manpower cost allocated for the rollout week. Your investment will produce 600 frozen drinks generating $4,500 in sales and a profit of $2,700. This approach produces a profit margin of 60% when factoring in the initial cost of the blenders, and 87% on all future sales.

Whether you choose option one, option two, or your own unique option, one thing is certain: your “frozen assets” won’t produce future profits unless you create the right investment blend moving forward. Frozen today—profitable tomorrow! It really can be that simple!