It's hot out there, people. Temperatures were dipping into the 40s here in Chicago a mere three weeks ago; today's high is set to be in the 80s. A quick look at USA Today's weather map shows that much of the eastern half of the country is in the same boat. Rising mercury can mean only one thing: increasing demand for frozen treats.
Enter 7-Eleven (NYSE:SE). Of course, the convenience store operator is already well-known for its signature Slurpee. The icy treat recently had an even better than usual showing thanks to a specially branded SpongeBob SquarePants flavor and mug.
7-Eleven is now adding to its stable of frozen goodness with a new product, Stir Crazy, in some of its stores. The concept behind the dessert is pretty simple. 7-Eleven recognized the success that outfits such as Cold Stone Creamery were having with ice cream freshly mixed with bits of candy or cookies. So it approached a partner, Wells' Dairy, to create a similar product that could be stored in a freezer. The result was Stir Crazy, a vanilla soft-serve treat that offers buyers the option of stirring in chocolate cookie dough or pieces of Kraft's (NYSE:KFT) Oreo cookies.
Stir Crazy is just another example of 7-Eleven offering a convenient alternative to a popular product. Sure, making a cappuccino yourself at one of the company's stores might not be as nice as having a barista brew one up for you at Starbucks (NYSE:SBUX), but a 7-Eleven cappuccino will do the trick in a pinch. The same logic could hold true for Stir Crazy. In hot weather, instant gratification often becomes the order of the day, and the new product seems to tap into that instinct.
At 26.5 times the high end of projected 2005 earnings, 7-Eleven's valuation is probably too rich to dive into now. But with the kind of innovation 7-Eleven continually shows, investors would be wise to watch for a buying opportunity.
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
