Smoothies help Tropical Smoothie Cafe capture demand for snacks.
Snacking has almost become its own daypart as consumers spend on their mid-morning smoothie, afternoon bubble tea or quick pre-dinner bite. Franchises in the snack segment grew total sales nearly 9 percent last year, recently released Franchise Times Top 400 data shows.
Leading the snack brands in sales and unit percentage growth in 2023 was Tropical Smoothie Café which landed at No. 66 on the Top 400. Systemwide sales for the Atlanta-based company hit $1.3 billion, up 16.5 percent, and its unit count increased by nearly 15 percent as it finished the year with 1,372 stores.
The annual Top 400 ranking lists the largest U.S.-based franchise systems by global systemwide sales.
Cheryl Fletcher is chief development officer for Tropical Smoothie Cafe.
“We had our 12th consecutive year of positive sales growth last year, which we’re very proud of, and this year will be another big year for us,” said Cheryl Fletcher, chief development officer for Tropical Smoothie. “We’re expecting to reach 1,500 locations before the end of the year.”
Tropical Smoothie isn’t the only snack brand that turned in strong sales growth. No. 209 Wetzel’s Pretzels (up 15.2 percent), No. 105 Smoothie King (up 14.6 percent), No. 85 Auntie Anne’s (up 14.5 percent) and No. 193 Shipley’s Do-Nuts (up 10.1 percent) were the other big gainers in the snack category.
No. 12 Dunkin’, by far the largest brand in the snack category with $13.3 billion in sales, grew sales by 7.5 percent. It added 429 locations to its global footprint, up 3.2 percent. The coffee and donut company, which was founded and maintains a headquarters in Massachuetts, finished the year with 13,790 global units.
Meanwhile, No. 16 Tim Hortons increased sales 9.5 percent to hit $7.8 billion as it grew its unit count by 4.2 percent. The Canadian legacy brand, which is again making a big push in the United States, added 233 locations in 2023 to end the year with 5,833 stores.
Adding further proof to the strength of the snack category, even the bottom three brands on the Top 400 posted positive sales growth. No. 307 Nekter Juice Bar increased revenue by 5.3 percent, No. 140 Gong Cha by 4.6 percent and No. 145 Jamba by 1.6 percent. Gong Cha, one of the fastest growing snack brands in terms of unit growth, added 384 net new stores in 2023.
Still, with a lot of snack brands posting strong growth, it’s Tropical Smoothie that emerged as the big winner in the crowded and competitive snack category. Fletcher attributed much of that success to company’s existing franchisees.
“I would say 70 percent of our unit growth came from our franchisees,” she said. “They believe in the brand; they believe in the commitment and they’re continuing to grow.”
Fletcher said a key goal for the brand last year was improving the unit economics for operators and building out the company’s menu well beyond smoothies. She said the company rolled out tropical bowls and now serves breakfast, lunch and dinner foods along with its traditional snack offerings.
“We had supply chain, marketing, operations all working together with the franchisees to roll out four new bowls—acai, chia oatmeal pudding and then we’ve added two kinds of Greek yogurt bowls at the start of the year,” Fletcher said. “It’s helped drive average sales just shy of $1 million, which is nearly double the initial investment for our locations,” she said.
Jon Fischer is head of development for Westzel’s Pretzels.
Wetzel’s, acquired in 2022 by MTY Food Group, is another snack brand on a fast track. The company, which is celebrating its 30th anniversary this year, added 29 units in 2023 to get to 396 locations. Jon Fischer, head of development, said the brand passed 400 stores in January and is on track to open 40 more locations this year.
“The big difference for us in our growth and success the past few years has been a real push to get our story out there and letting people know what makes us unique,” he said. “We’re working hard on keeping the messaging on our story fresh to gain more exposure for the brand and help drive business to our franchisees.”