CHICAGO -- Put 70 beverage retailers and suppliers in a room for three days and you’re bound to hear some innovative ideas and interesting statistics. Such was the case during CSP’s recent Cold Vault Summit in Chicago.
Here are seven data points and ideas that stuck out to this observer:
Earth to Consumers
When asked “What triggered your convenience-store visit today?” in a recent Red Bull consumer survey, 80% of respondents said “habit.” “C-stores are the epitome of habitual behavior and selective attention,” said Red Bull North America’s capabilities manager Prashant Jairaj. How to jolt customers out of a daze? Put a promotion right in front of their faces, and consider technology—apps, beacons, etc.—that reach out to them. “We need to start thinking about what the consumer wants rather than what we want,” he said. That means “functional and entertaining” content rather than just trying to sell another beverage or other product.
What’s Up? What’s Down?
During the five-year period from 2010 through 2014, double-digit movement was par for the course within beverage sales trends at all channels of retail, suggesting consumer preferences are firmly entrenched in a period of evolution.
Change in per-capita consumption 2010-2014
| Bottled Water | +20.0% |
| CSDs | -10.7% |
| Dairy alternatives | +13.1% |
| Energy drinks | +44.8% |
| Fruit drinks | -14.7% |
| RTD coffee | +12.0% |
| RTD tea | +12.0% |
| Sports drinks | +10.2% |
Source: Beverage Marketing Corp., Technomic Inc.
Alcohol Favorites
For all the talk about craft-beer growth, domestic regular beer remains the largest piece of the alcohol pie in c-stores and beyond, and the “it” generation—millennials—still considers it its favorite alcohol beverage. Thirty percent of those surveyed chose domestic regular beer as its favorite, followed by imported beer (29%) and domestic light beer (29%). Craft beer? Ninth place with 17% of the vote.
Recommendation Culture
The consumer-value equation of yesterday was simple: product price divided by product benefit (see illustration). Today, a recommendation—from a friend, a celebrity or, increasingly, a trending item on social media—has become a major part of that equation. “Millennials are the least-trusting generation ever,” said Nik Modi, beverage analyst with RBC Capital. Only 19% say that, generally speaking, most people can be trusted. But a “thumbs-up” or a “like” from the right person can make a new product into a must-have status symbol. “Social media has given these things a false sense of importance,” Modi said, “but we live in a F.O.M.O. culture—fear of missing out—so we’re seeing consumers trade up despite a slow-growth economy.”
All SKU’d Up
On one hand, shoppers generally buy the staple brands in the cold vault. On the other, they’re drawn to a wide variety of beverage types, brands and flavors. What gives? “Appeal to the most valuable shoppers in your store,” said Jeremy McManes, shopper insights manager for Dr Pepper Snapple Group. Added Tom Collins, manager of The Home Depot FUEL c-stores, “The customer wants to shop in a place where they feel like they have options. They’ll still buy the top 10 SKUs, but they’re happy to know the option is there.”
Bundling Opportunities
Bundling is always encouraged to sell more stuff, but what products go best together? Some thoughts:
- 53% of gasoline shoppers also purchased a drink.
- 43% of sweet and salty snack trips have a packaged beverage purchased with them.
- 25% of prepared-food trips have a cold-vault product purchased with them.
- 22% of immediate-consumption purchases are to pair a beverage with a meal or snack.
And what subcategories work best together? Try energy drinks and granola bars, iced tea with lunch or CSDs with sweet and salty snacks.
Retail Results
Country Fair wants to be a destination for energy drinks. With three of its average 14 cooler doors dedicated to the subcategory, it’s well on its way. But sales manager Jaime Pukylo knows that doesn’t mean ignoring healthier products that customers expect today—whether they intend to buy them or not. “People want a store that stocks that good-for-you stuff, but they’re still going to buy a Snickers or energy drink,” he said.
Watch for complete coverage of CSP’s Cold Vault Summit in December issue of CSP magazine.
Steve Holtz,who writes the Fluid Thoughts blog, is the online news director and beverage editor for Winsight Media. He has been covering the convenience-store industry and the beverage category for more than a decade. Contact him at sholtz@winsightmedia.com.
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