Carrie and Zach McCaw found solutions to better manage the tidal wave of new cold vault beverages arriving at Shawnee Grocery, their Stout, Ohio-based convenience store.
One was activating the age-old premise of “less is more.” As part of a re-vamping of their 10-cooler beverage department, the McCaws—in one fell swoop—freed up precious cold vault space by terminating the supply contract with one large beverage supplier.
The decision was based on unappealing terms of its merchandising contract at the 1,500-square foot store, said Carrie McCaw.
“The supplier pressured us to expand their product lines above that of a competitor and also wanted us to install a smaller satellite cooler merchandiser that we couldn’t accommodate—the store is small,” said McCaw. “The combination of factors made the decision easy.”
From an efficiency standpoint, Shawnee Grocery re-designed the cold vault so customers would pass more doors of its 10 cold vault alignment to reach their beverage purchases—such as core segments of beer, sports drinks and energy.
“From left to right, we put beer to the far left—away from the entranceway—then energy, soda pop, sports drinks and, at the other end, dairy and juice. The rearrangement gets customers walking across the store to spark impulse sales,” she said.
Crafting an efficient cold beverage category management program amid the burgeoning sea of choices and new arrivals has grown vexing with so much inventory to consider.
The c-store non-adult cold vault is stocked with soft drinks, energy and sports beverages, protein/functional drinks, teas, juices, water, cold brew and dairy. The elusive goal is figuring out what works—and what doesn’t—to serve an array of local preferences.
“The explosion of SKUs has made cold-vault planning more complex,” said Jacob Jordan, category insight manager, Temple Texas-based McLane Co. “Analysis paralysis has become daunting for consumers. That’s why velocity matters more than variety. Modular vaults, rotational slots and data-driven curation are key to staying agile and profitable,” he said.
Crystallizing the process
To master category management, retailers have long relied on the three-prong approach of scan data, customer feedback and wholesaler-supplier input.
“Retailers are increasingly using POS and shopper data to guide resets and optimize assortments,” said Jordan. “Data sharing between the partners is central: retailers provide POS data and distributors (including McLane) share unit movement insights to build optimized planograms.”
Promotion tracking and coordinated resets all help retailers respond quickly to trends, he added. “While larger chains have access to resources, there’s a growing opportunity for independent retailers to tap into distributor capabilities and fill gaps in their technology resources. We see ourselves as a data-driven partner excited to support retailers of all sizes.”
Seth Carter, category manager-beer/wine/packaged beverages, OnCue, Oklahoma City, Oklahoma, said the c-store chain is “always analyzing data and sales trends to build (cold drink) sets that truly meet customer demand rather than relying on contract-based sets.”
The process of data-driven space planning “is more labor-intensive, but the payoff comes when planograms are designed with both the customer and retailer in mind,” said Carter.
As they obtain granular data to pinpoint trends, retailers must drill down to identify activity segment by segment. Far and away, functional beverages have taken retail channels by storm the way traditional energy had—and continues to do. Retailers that lean in on the functional drink trend often find it reaps benefits.
- OnCue is No. 99 on CSP’s 2025 Top 202 ranking of U.S. convenience-store chains by store count. Gate Petroleum Co. is No. 103 and Tri Star Energy/Twice Daily is No. 48.
“Outside of energy—which continue to lead in growth—we’ve seen strong momentum with functional hydration thanks to their dual appeal to taste great and offer added benefits like electrolytes and vitamins,” said Jordan.
“Flavored and enhanced waters are rising in popularity, protein-forward drinks and modern sodas Poppi and Olipop offer carbonation and sweetness with gut health benefits, resonating strongly with Gen Z and wellness-focused consumers,” added Jordan. “Retailers are tasked with balancing innovation with proven performance.”
According to Sally Lyons Wyatt, global executive vice president and chief advisor, consumer goods and foodservice insights, Chicago-based Circana, “when you look at the beverage universe in c-stores, it’s changed significantly over the last few years.”
Lyons Wyatt acknowledged the tailwinds behind functional hydration and modern soda, and adds that co-branding, new packaging formats such as mini cans, weight control beverages and refrigerated yogurt drinks as trending in consumer popularity.
Redefining energy
The traditional energy drink segment has evolved into a growing number of options made with clean ingredients. Brands such as Celsius, Ghost and Alani Nu are gaining significant momentum.
“These brands are capitalizing on health-focused messaging and vibrant flavors to attract consumers seeking functional energy that aligns with their active, health-conscious lifestyles,” said Armin Hadziomerovic, category manager, merchandising strategies/data-driven decision-making, for Bowling Green, Kentucky-based Houchens Food Group.
“As the year unfolds, (manufacturers) are rolling out new, inventive flavors and limited-time offerings to keep their audiences engaged and energized about the category,” he said.
New intake formats have also arrived. Wip is an energy pouch with caffeine, vitamins and minerals that is marketed to support physical and mental performance.
“Wip is redefining how energy is displayed and sold in convenience stores,” said Mike Sweeney, director of sales at Wip, previously a top executive at Bang Energy. “With a pouch format that requires no refrigeration, it unlocks entirely new merchandising possibilities across the store.”
Speaking of the enhanced hydration subcategory in general, it’s taking off, “primarily driven by our concentration of locations in warmer-climate states where the need for hydration products is higher,” said Mary Valenza, category manager/buyer, Gate Petroleum, Jacksonville, Florida. “Brands such as Electrolit and Gatorlyte have proven to be leaders in this subcategory,” said Valenza.
Some retailers are continuing to capitalize upon the growth of rapid hydration. Terry Messmer, sales and category manager for Nashville, Tennessee-based Twice Daily c-stores, is one of them.
“They brought life to the category similar to when Bang Energy came out and created the high-performance sub-category within energy,” said Messmer.
Single-serve beverages proliferate
Long the domain of c-store retailers, the single-serve packaged beverage format is now making inroads in other types of retail. This is only adding to c-store competition, and the onus is on the channel to wrest back a once-entrenched competitive advantage, experts said.
“Food (grocery), mass and club stores are just three channels expanding single-serve beverages, as it meets a strong customer need,” said Circana’s Lyons Wyatt.
In the meantime, many c-stores aren’t enjoying the same advantage of selling multi-packs in any great volume due to space limitations combined with the expectations of their customer base.
“At the end of the day, I don’t see multi-packs being a driver of growth in convenience other than for flavored and still water,” said Lyons Wyatt.
Added McLane’s Jordan: “The focus has moved from variety to velocity, with functional-first and premium single-serves playing a key role in c-store margin growth. Placement strategy matters: merchandising tactics like inside-door stickers are boosting incremental sales.”
Exploring flavors
For the remainder of 2025 and beyond, flavor innovation is certain to be a major trend that demands attention.
“With growing interest in unique and bold flavor profiles, especially those featuring exotic and global influences, this year has presented an opportunity to further explore flavors that align with evolving taste preferences and cultural trends,” Hadziomerovic said.
McCaw of Shawnee Grocery said ongoing dialogue with customers and understanding what they truly desire in their daily beverages—guerrilla marketing so to speak—helps greatly.
“We’re in a rural town. Most locals like what they like and don’t want a lot of ‘new stuff,’ like protein or functional drinks. Sports drinks, beer and soda pop move the fastest,” she said.
Understanding packaged drink desires of both local and traveling customers is another challenge for c-stores to master to compete more deftly for share of thirst.
“I would suggest zeroing in on the types of beverages to carry based on who lives nearby, but also who are the people passing through and entering a particular store: marry the buying trends of both. And retailers have to know that what works in mass or club stores might not resonate in the c-store environment,” said Lyons Wyatt.
On the other hand, c-stores “can often serve as the testing ground” for new brands and line extensions. “They have to take advantage of that exclusive opportunity,” she said.
With so much movement in the segment, some believe this is a terrific time to be a packaged beverage category manager.
“Consumer trends are evolving like never before,” said Carter of OnCue. “I appreciate the challenge of finding the next big thing. Of all the convenience store categories, I believe the beverage segment offers the most opportunity for trial and exploration.”
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