A beverage dispenser that uses a slurry ice bath to achieve heat transfer from coils containing a beverage. The invention provides a hopper into which a slurry ice bath is created. The hopper receives ice from an ice bin via an ice chute. The ice bin contains a rotating agitator for pushing ice down the ice bin. Coils containing a beverage to be dispensed are submersed in the slurry ice bath. Ice passing through the ice chute and into the hopper floats to the surface of the water in the hopper. As the agitator rotates, it continues to push ice down the ice chute, which in turn raises the water level of the water in the hopper. The water level then reaches an equilibrium level, where the buoyant force of the ice in the water will prevent additional ice from falling through the ice chute.