EDINBURG, Texas — Planning a convenience store’s cold vault is part science, part art and part contracts.
Joe Brumfield (inset) is the new category manager for beer and packaged beverages at La Lomita, a 35-store chain based in Edinburg, Texas, that operates traditional convenience stores under the El Tigre brand and Tex Best travel centers. In the spring, Brumfield, a 36-year c-store veteran, made the move from the more than 7,100-store chain Circle K, owned by Laval, Quebec-based Alimentation Couche-Tard. But while the size of the two chains is vastly different, he said many strategies remain the same.
One strategy Brumfield has kept at La Lomita: Put best sellers in the “strike zone,” which is between eye and belly level so they are easy for consumers to grab.
He also places best-selling items toward the door handle for easier access and slower-selling items closer to the hinge.
When deciding what products go where, Brumfield considers a few factors. The first is available space, then shopability.
“Because sometimes things don’t fit where you really want them to go simply because of the physical limitations of the cooler door, so you have to try to accommodate that the best you can,” he said. “You typically put your larger bottles toward the bottom, but you really never want to put your best-selling items on the bottom shelf.”
It’s important to keep the cooler looking full and having products available for customers.
Exceptions sometimes must be made as Brumfield assembles the cold vault puzzle, the complexity of which varies depending on the size of the vault.
Regardless of the number of doors, Brumfield has a flow to his products developed during decades in the business.
Brumfield’s preferred cooler flow situates energy drinks in the center because it’s the largest subcategory and the one with the biggest growth. The U.S. energy drink market, valued at $14.3 billion in 2020, is expected to grow at a compound annual growth rate of 6.9% from 2022 to 2026, reaching $21.01 billion by 2026, according to Dublin, Ireland-based Research and Markets.
Brumfield’s cold vault layout, from left to right, includes dairy, juice, sports drinks, waters, ready-to-drink (RTD) coffee, RTD tea, energy, carbonated soft drinks (CSDs) and beer.
Brumfield said this lineup works because it makes sense in the consumer’s mind, allowing them to find products easier.
“The problem is, you have some product lines that blur, like coconut waters, Monster Hydro, and Bai, which are considered enhanced waters,” he said. “But they can be considered a sports drink as well, so placement of those items can vary from cooler to cooler.”
Benefits of Smaller
One perk of managing a cold vault for a smaller retailer is there are fewer contract restrictions.
At the larger chains he has worked for, Brumfield was more tied to contract specifics with big suppliers. “It was often a very regimented system,” he said. At La Lomita, there are still agreements with suppliers, but he’s not locked into large national and international contracts, so it’s easier to customize cooler sets based on each store’s sales and other needs, Brumfield said.
For example, if he has a contract with an energy drink manufacturer for a full shelf of a new product and it doesn’t sell well, at La Lomita he can simply pull the product.
“The key is to make sure you’ve got the right assortment based on a couple of things, including the sales percentage of what the store does,” he said. “If energy drinks are 35% of total cold vault sales, at least 35% of that cold vault space should be dedicated to energy.”
There are several ways retailers can manage their coolers: by looking at sales, looking at profit dollars and looking at space to sales. “I use a combination of things,” he said.
“If energy drinks are 35% of total cold vault sales, at least 35% of that cold vault space should be dedicated to energy.”
At Circle K, Brumfield would conduct one major reset yearly plus a smaller refresh “simply because with 700 stores just in Texas, it’s a massive project,” he said. And while La Lomita resets its coolers yearly, Brumfield’s goal in 2023 is to complete an initial reset by April 2023 and a refresh that includes an updated planogram by mid-September.
Another aspect to managing the cold vault occurs outside the doors, where Brumfield strives for uniform signage that is sparse and printed in-house. He avoids clutter on the doors, such as clip strips that hold bags of chips, so customers can better view what’s inside.
“I’m also replacing the missing price rails on the cooler shelves to make sure we have the ability to price everything,” he said, adding that signage should speak only to a promotion and pricing.
Brumfield also is switching to a better back-office computer system that will allow printing price tags at the store level. “That’s something that big chains have, but we don’t have that ability,” he said. “We’re relying on vendors to price our coolers.”
Rethinking Resets
Supply-chain problems have forced Brumfield to rethink how and who does the actual resets as well. Brumfield has used several big-name vendors and third parties, the latter being easier for him to manage because he deals with just one company, “as opposed to trying to manage four or five going into my cooler to do the sets.”
With one company, “They go in with a crew and move from store to store, and they do it the way I want to do it,” he said. “It works out a lot better” and eliminates the potential conflict among vendors over what goes where in the coolers.
Another issue with using vendors to reset coolers is the problem everyone has right now: labor and cost cuts, Brumfield said. “A lot of times they don’t have the people to do it like they used to.” Because of this, Brumfield said, vendors nowadays are often agreeable when he offers to have a third-party reset shelves and bill the vendor for the work.
And when it comes to products, Brumfield struggles with merchandise flow. To combat stock shortages, he has brought in alternative products to fill holes.
It’s important to keep the cooler looking full and having products available for customers.
A downside, however, is data gets skewed and presents a misleading picture of what’s selling.
“You’re going to have sales of substitute or lower-velocity items become much higher than they probably would have been if fill rates were normal,” he said.
Room for Innovation
Brumfield also tries to leave room on his shelves for innovation. Failing to leave flex space limits the ability to bring new items to the market.
“That’s one of the challenges when you’re dealing potentially with a big company with contracts, whereas my contracts are probably going to be more flexible,” he said.
Brumfield said he enjoys the pace in the innovation of new items and the category’s dynamic nature. There’s an accompanying challenge, too, in deciding on new products and selecting those trending upward.
“You don’t want to be missing sales opportunities because you didn’t bring in a certain item,” he said. “On the other hand, if you bring in something that doesn’t have a track record, you may hurt your category’s sales and profits.”
This for Brumfield is a big difference between working for a large chain versus a smaller company. “It’s hard for a small company to be a brand builder, and so I have to balance that and won’t be a first adopter,” he said, adding that he regularly looks at national sales trends. “I may have to wait to make sure a certain new item has some legs before I bring it into my stores.”
What’s New at La Lomita
Brands added in 2022:
- Black Rifle RTD Coffee
- C4 Energy
- Celsius Energy
- Eternal Naturally Alkaline Spring Water
- Gatorlyte Zero Lime Cucumber (which has the highest unit sales of all the new items introduced in 2022)
- Texas Tea
- Corona Seltzer
- Limonada Strawberry, 24-ounce can
Items coming soon:
- Black Stag RTD Coffees
- Hostess Iced Lattes
- Ghost Energy
- Simply Spiked
- Slim Chillers (wine-based ice pops and shots)