Branching Off Beverages
Follow the consumer decision tree to nurture more packaged-beverage sales.
The Consumer: As packaged beverages go, bottled water is among the most widely consumed, according to research by Chicago-based Technomic Inc. Seventy-one percent of consumers had bottled water in the past month, although this skews even higher among 35- to 54-year-old, upper-income women. Flavored water skews younger; while 25% of consumers overall say they have consumed the beverage in the past month, among 18- to 34-year-old males and females the figures are 34% and 36%, respectively.
The Factors: According to Chelsea Allen, senior manager of category and shopper solutions for Nestle Waters North America, Stamford, Conn., brand has risen up the decision tree to take greater priority. The bottled-water supplier—whose brands include Nestle Pure Life, Arrowhead, Deer Park and Ice Mountain, as well as sparkling water brands Perrier and San Pellegrino—shared the latest CDT for the segment, based on research from The Nielsen Co.
“A few years ago, brand wasn’t up there,” says Allen, citing that the type of water (still or sparkling) typically came first, as well as the water source (spring, purified, etc.). But bottled-water brands have so differentiated themselves that they now communicate more than the label.
A CDT can help retailers better organize the bottled-water section to make it more shoppable. “Right now [many retailers] place the still water together; there’s no premium cut-out section. It’s more on who is distributing, what the region is,” she says. Instead, Nestle Waters suggests carving out sections that reflect each area of the CDT: premium brands, flavored and unflavored, sparkling water, glass and plastic bottles, flavored and unflavored, etc.
“Sparkling is such an untapped opportunity,” says Allen, pointing out that its share of c-store bottled-water sales is still small. “This is an untapped opportunity that will help try to drive this channel further.”
The Consumer: “Beer’s a pretty universal piece of the social fabric and diet for quite a few people,” says Prestridge of A-B InBev. Hispanics and African-Americans skew slightly higher in beer consumption, as do millennials, according to company research. Baby boomers drink beer but like to alternate with wine. Even by gender, beer is surprisingly democratic, with a 55/45 split toward men, although newer types of brews specifically designed to appeal to women’s palates are straightening that lean.
The Factors: According to A-B InBev research, occasion is the top factor in making an alcohol-beverage choice. “What am I using it for, how am I consuming it?” Prestridge says. “Is it for me and right now, or is it for sharing?”
Once the occasion is decided, consumers move on to beverage choice—beer, wine, spirits—brands and price segments, and then the desired shopping experience. “It’s choosing which store will have what I need at the right price, cold or on sale,” says Prestridge. “I’m not just shopping the cheapest. Is it convenient, and who will have what I want?”
Indeed, variety is key in this segment, he says. “If the store is out of stock, they will go somewhere else,” says Prestridge. “If it happens a couple of times, the shopper stops thinking about that as a beer store: ‘It won’t have what I need, so I will take it off the list.’ ”
According to MillerCoors research, the beer decision tree also begins with that immediate-consumption mindset. “The most important factors in choosing a store for beer are cold beer, brand and package size availability,” says Jeffrey Schouten, director of channel marketing for Chicago-based MillerCoors. “Price is also important, especially for millennials.”
Schouten of MillerCoors agrees that variety is key for beer: “Keep it cold and in stock, and make sure the assortment has the most popular brands and pack sizes.”