Shifting Consumption Patterns and Considerations for the Cold Vault

It is no surprise there has been massive proliferation of beverage choices, including new brands entering “traditional” categories and an influx of items toeing different category lines. But how has this affected category share of consumption occasions across generations or category consumption frequency? Are consumption occasions evolving? What does it all mean for the traditionally indulgent convenience channel assortment and, more importantly, how might we leverage these consumption trends to inform space allocations across future planograms? Keurig Dr Pepper explored these questions in their Total Beverage Consumption Generational Study of Kantar’s World Panel, 1987-20181.

cold vault

The importance of the in-between meal beverage occasion is rising. From 1987 to 2018, the percentage of beverage occasions consumed with a meal dropped from 65% to 53%. The influx of snacking occasions and solo dining bodes well for the immediate consumption-centric convenience channel, but consideration of shifts across categories is required to ensure c-stores are protecting their base and evolving with the times.

While the number of beverage choices appears to be inching towards infinite, the average number of weekly drinking occasions per person has remained stable at 35 for the past 30 years. This category fragmentation and consistent number of consumption occasions has impacted staple categories such as milk, brewed coffee and carbonated soft drinks. Total water (tap, still, flavored, and sparkling) consumption has increased 9% in the past 15 years, taking share from CSDs, fruit juice/fruit drinks and even milk. Emerging Categories shifted from about 5% of all drinking occasions in 2003 to about 10% in 2018. These “New Age” categories play significant roles in consumption occasions amongst key convenience store cohorts. For example, teens significantly over-index with flavored still water (173 teens vs. all consumers index), while flavored and sparkling water both attract “acculturated Hispanic” consumers (169 and 155 acculturated Hispanic vs. total all consumers). As a result, on-trend flavored water and sparkling brands, such as Keurig Dr Pepper’s Bai, Core Organic, Penafiel and Bai Bubbles can help Convenience stores drive conversion and loyalty amongst key shopper groups. Similarly, ready-to-drink (RTD) coffee has grown in popularity amongst younger consumers and Hispanic consumers, and also tends to skew female.  Brands such as High Brew, Peet’s and Forto can also help attract these important shopper groups. 

While carbonated soft drinks have declined slightly in overall share of consumption, their weekly penetration remains one of the highest (42% for regular CSDs, 21% for diet) across all consumption occasions, and even higher amongst convenience store visits. However, ginger ale has gained share of drinking occasions amongst 18- to 49-year-olds, key shoppers to the convenience channel.  Canada Dry has helped buck the carbonated soft drink consumption trend with 12 consecutive years of sales growth and the introduction of Canada Dry Ginger Ale Lemonade and Orangeade innovations, making them perfect convenience store staples.

Ready-to-drink (RTD) tea has experienced a new wave of growth with younger consumers. In fact, millennials adopted RTD tea at an early age and continue to increase their RTD tea consumption. Gen Z is now trying RTD teas at an even younger age and could follow a similar trend to millennials. While unflavored tea-forward brands initially expanded the RTD tea category offerings, flavored RTD teas have nearly doubled the weekly consumption penetration of unflavored tea. Additionally, RTD tea consumption, once a key category for dinner, has shifted to more of a lunch occasion. Given these trends, an opportunity exists for lunch/afternoon daypart promotions with flavored teas and juice drinks, such as Snapple or flavored tea-forward teas, such as Bai Antioxidant Supertea™.

Considering these broader consumption trends in addition to year-over-year c-store sales allows retailers to better anticipate shopper needs and how to best deliver what they want. 

  1All Data Cited – Source: KDP Total Beverage Generational Study, Kantar World Panel 1987-2018

This post is sponsored by Keurig Dr Pepper

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