Branching Off Beverages
Follow the consumer decision tree to nurture more packaged-beverage sales.
CSDs and Juices
The Consumer: According to Technomic, 66% of all consumers say they have consumed a regular carbonated soft drink (CSD) in the past month, with the figure skewing toward 18- to 24-year-old males, 80% of whom have consumed a regular CSD. Meanwhile, 44% of consumers have had a diet CSD in the past month. This segment skews toward Caucasian, middle-age consumers, likely because of health concerns, with no strong skew by gender.
For juice, 16% of consumers claim to have made this purchase in the past month, skewing toward 18- to 34-year-olds. Meanwhile, 13% of consumers say they purchased bottled or canned iced tea, with a strong skew toward 18- to 24-year-olds.
The Factors: Alvarado of DPSG shared research from the company’s 2011 c-store study, the findings of which he says continue to be relevant. According to DPSG’s research, there are two groups of c-store shoppers: regulars who stop at a store because it is on the way to work or to home, and those who treat the store as a destination stop for buying a beverage for the work day (e.g., construction workers or landscapers).
When asked why they go to a c-store, 20% of consumers mentioned the need to buy gas, followed by the desire to buy an alcohol beverage (12%) and a meal or snack (11%), according to DPSG.
“The decision of what type of beverage they will purchase is determined by the need they are trying to fill,” says Alvarado. For c-stores, immediate consumption is the sweet spot.
The first item on the CSD decision tree is regular or diet, followed by single- or multi-serve, can or bottle, cola or flavored. For juices, the decision process is simpler and largely dictated by the end user, according to Alvarado. If the purchase is for an adult, the choice will likely be orange or cranberry juice. If it is for a child, apple or grape juice is more popular. For energy drinks, functionality and brand are paramount.
Variety is critical for beverages, DPSG research found. “A shopper is willing to drive past a c-store because they know it won’t have the variety of beverages they’re looking for,” says Alvarado. “Once I do get to the store, the very first factor that will determine what I want to drink is whether I want packaged or fountain. Fountain is preferred because of the value for the money, or size. On the cooler side, it’s mainly variety that plays a very, very important role.”
With CSDs, a large variety of flavors can help drive impulse sales. Of course, this is limited by the number of cooler doors and the need to stock core brands, but leveraging the impulse nature of other brands and flavors can drive incremental sales. For example, DPSG research shows flavored CSDs are more impulsive purchases than colas, but they are not necessarily displayed in a way that maximizes that impulse buy.
“If I go to a typical c-store, the most prominent position is typically allocated to colas, just because historically it’s always been done that way,” says Alvarado. “The biggest brands are also ones that invest the most. We found that by moving flavor brands into premium position—the ‘strike zone’—you can drive impulsive, incremental sales for the retailer.”
Package variety, however, is not as important as flavor variety, says Alvarado: “Having a multitude of different packages won’t necessarily result in incremental sales. [For] energy, you have 8, 12, 16, 20 and 24 ounces. Do you really need all of those package sizes to address the needs of that consumer? If I don’t find an 8-ounce, will I have a 12-ounce instead? Or do I really need 24 ounces when a 20-ounce is enough?”