IRVING, Texas — This summer, 7-Eleven rolled out Quake Energy at 7-Eleven stores in four flavors. The energy drink contains no sugar or artificial flavors and features electrolytes, creatine, COQ10 and branched-chain amino acids. At a suggested retail price of $2.49 per can, Quake Energy “has exceeded expectations in becoming one of [7-Eleven’s] top sellers in the energy category,” said Tim Cogil, 7-Eleven’s senior director of private brands.
Cogil has overseen several private-label triumphs over the past few years, most recently the launch of Quake Energy, Roamer canned wine, Pure Water, 7-Select cold-pressed juices and ready-to-drink juices.
The buzz behind canned wine encouraged Irving, Texas-based 7-Eleven to launch its own private-label brand, Roamer, in December 2018. Offered in Chardonnay and Rose varieties, Roamer is a vehicle to reach a wider range of wine drinkers.
“More people are bringing drinks to a beach, picnic, concert or campsite,” Cogil said. “Because of this roaming ability, our core audience has been millennials who seek single-serving portion size and recyclable aluminum cans over glass bottles.”
In a Q&A with CSP, Cogil discussed 7-Eleven’s private-brand competencies and revealed where he and his team are drawing inspiration to drive innovation.
With Quake Energy, what did consumers and other data sources tell the team about the need for this type of product to further drive a winning category—energy with a nutritional benefit?
Tim Cogil: Three out of four energy drink sales are made in convenience stores. So when 7-Eleven customers told us they wanted an energy drink with more benefits than what they could find on the market, we got to work. When conducting beverage product development in today’s marketplace, less is more. Industry data shows that the fastest growth in beverages continues to be in varieties with reduced calories and sugar, and fewer but more natural ingredients. Label readers look for ingredients that offer benefits: vitamins, electrolytes, antioxidants and more. We followed the same guidelines when developing our newest private-brand drink, 7-Select Replenish sports drink.
Did folks who were either marginal or nonloyal consumers of energy drinks indicate they had concerns about the formulations of traditional energy beverages, and would they try new options?
I wouldn’t classify it as concerns, but more of a trend of customers seeking better-for-you options in the same energy space. And not just energy, but other beverages and snacks. Quake has caffeine, which is a known and natural, noncaloric stimulant, along with antioxidants, electrolytes, B vitamins and branched-chain amino acids. The biggest growth in the energy drink segment can be seen in the ones that are considered "healthier" by consumers. Quake, with zero sugar and "zero crash," definitely fills that bill. A customer who is not inclined to try one of the traditional mega-brand energy drinks might give Quake a trial.
How does Quake stand out in what is a sea of options in the energy drink category?
Great value, great quality, great packaging, great merchandising. For the past several years, 7-Eleven has been building a reputation for quality and uniqueness for its 7-Select and other private brands. We have especially been building our beverage portfolio in the vault: Pure Water, 7-Select cold-pressed juices, ready-to-drink juices, among others. Because of the continual improvement in quality and selection, I think our customers are more willing to try a new exclusive product at their neighborhood 7-Eleven store. Quality and value are what keeps them coming back.
7-Eleven continues to build a strong private-level network across other categories. What informs and guides the team on how to proceed with R&D for new innovation?
Our private-brand development team works within a very collaborative environment. We share successes as well as opportunities for improvement. A flavor trend in one category may have applications in another. A hot new private brand product in one category might identify a need for line extensions or affinity products in another. Our vendors, who follow market trends closely, bring us ideas as well that are shared among team members.
The race for innovation never ends. What’s new and hot this month might have run its course in just a few months. 7-Eleven launches an estimated 500 new private-brand items every year. Our stores have more than 1,500 private brand products they can choose to carry in their stores. Limited-time flavors and offers keep categories fresh and customers looking for the newest items on the shelf.
Can you describe the breadth and depth of new users to the energy drink category that have entered the picture with new offerings like Quake and others that have come to the market?
We always recognized the 18- to 36-year-old male as the core consumer of energy beverages: Is Quake appealing to these core loyalists as well? Understanding the needs of our customer is critical to the success of our private-brands program, starting with our core customers. While it is too early to know which segment of customers that Quake specifically appeals to most, based on sales, it appears to have found broad appeal. Our goal is to create products that appeal to our core customers, while adding attributes that draw in a new audience.
What is the tendency of consumers to migrate off-brand and try new energy brands, in this case a private label such as Quake? Is there bandwidth in this category where customers perhaps reach for their brand of choice along with another?
Private brands are tremendously popular among younger millennial and Gen Z customers. In fact, many believe that private brands offer more innovative taste combinations or higher quality standards than national brands—not to mention more value. With every new 7-Select or other 7-Eleven private-brand product, the product development team benchmarks against the best of the name brands, and then looks for ways to improve on it or offer taste profiles that are new and trending. If we meet customers’ expectations for quality and value, then we believe they will become loyal to not only the product itself but to 7-Eleven, the only place they can find it.
From a promotional and cross-promotional standpoint, what are some of the strategies the brand team has deployed to engage new users and offer them incentives?
Our 7-Eleven app and 7Rewards program have proven invaluable to new-product launches. For any new proprietary product, we leverage competitive analysis on other best-in-class category products to drive trial. A recent energy offer gave us insight into a large energy-seeking customer cohort, with a high affinity to water. We strategically collaborate with key vendors to drive affinity-based trial offers as well as feature new proprietary items on our 7Rewards redemption menu. 7Rewards offers are always changing, and we look for deals that we think will not only promote our products but also bring our customers real value.
Looking across beverage categories, is Quake getting some attention from those folks who might have consumed everything from isotonics to Muscle Milk as a pre- and post-workout option?
The line between functional beverages—energy, performance, protein, isotonic and recovery, and more—continues to blur with customers looking for more benefits in a single product. Customers communicated that they wanted an energy drink that provides more benefits than the traditional energy drink brands offer today. Likewise, our new 7-Select Replenish sport drink does more than replace electrolytes. Our goal is to have a chilled ready-to-drink beverage to meet whatever need our customers want met, whether they’re heading to or from a workout, or just need a boost to their day.
Can you provide some early returns on dollar and unit performance of Quake Energy since its rollout?
Specific sales information is proprietary, and 7-Eleven does not share that information. Quake has exceeded expectations and has become one of our top sellers in the energy category.