The convenience-store channel continues to grow, but not without its obstacles. A couple of trends are working against this growth in driving shopping occasions. Cars are becoming more fuel-efficient, meaning shoppers can go longer between stops, and today’s teenagers aren’t driving as much as they used to.
But despite those headwinds, beverage and food trips continue to increase. In fact, a Meyers convenience-store study last year found that 58% of c-store visitors said beverages and food are the primary reasons they make a trip to a c-store.
While there may not be an app that satisfies a shopper’s craving for a cold Dr Pepper, the past decade has brought a lot of change to our channel’s beverage business. Energy has grown from a niche part of nonalcohol beverages to the second-largest beverage category, and every year more than 1,000 new beverage products are launched in our channel (Nielsen FY 2013-2015). One thing has remained constant: Carbonated soft drinks (CSDs) are king of the hill. Approximately 50% more single-serve CSD units have been sold year to date than were sold in the energy category, according to Nielsen data for the 52 weeks ending June 18, 2016.
But with all of the focus on everything new and shiny, shoppers are beginning to feel as if there isn’t enough variety in CSDs. Shopper research shows that a net of 27% of shoppers say they want more variety in the CSD category vs. only 4% in energy (Nielsen Affinova Incrementality Study 2015). And, arguably more important, nearly 40% of shoppers also say that they would travel to a different store if the variety they are seeking isn’t available.
So how do we provide more variety in CSDs without either building a bigger store with a bigger vault or taking space away from newer, promising beverage categories?
Move stuff around!
For many c-store operators, colas are still found in the all-important strike zone. But they are mostly planned purchases (85% of Cola purchases planned according to research conducted by VideoMining in 2015). If that’s what a shopper wants, they’re going to find it. But noncolas are where the flavor variety is—and so is the growth. Noncola CSDs now make up 58.5% of total CSD sales in our channel, according to Nielsen year-to-date data through July 16, 2016. However, in many stores, noncola CSDs are hidden away on the bottom shelf, where shoppers will see them only when they bend down to tie their shoes. With 30% of noncola CSD purchases unplanned, shoppers have to see these products, according to a Nielsen Homescan Panel from June 27, 2015. Visibility is key.
Operators who have improved the visibility of noncola CSDs by moving them to the strike zone have seen significant results, with sales of 20-ounce CSDs up 7% more than in accounts where flavors are still buried down in the well (Nielsen 2015 data, “Flavor Zone” accounts vs. Total Convenience). And growth hasn’t just been in noncolas. Colas have also grown at a 6.8% greater rate in these accounts that have turned their CSD strike zone into a flavor zone.
Move stuff around. Make your strike zone a flavor zone and provide your shoppers with the variety they want, and your cold vault will continue to pop!
This post is sponsored by Keurig Dr Pepper