"The word ‘demographic’ has a totally different meaning today than it did yesterday.”
Samantha Barry’s words reflected many of the retailer attendees’ thoughts just one day into CSP’s Cold Vault Summit, held last month in Rosemont, Ill. Barry, marketing manager for E.J. Pope & Son, Mount Olive, N.C., had weathered a day of presentations on consumer insights that left her feeling certain of one thing: It’s time to think differently about the faces walking in and out E.J. Pope’s Handy Mart convenience stores.
Take age. Technomic data shows 62% of Gen Z customers and 66% of millennials purchase a packaged beverage when visiting a c-store. Compare that to 59% of all consumers.
Gender plays a role, too. Gen Z females (60%) are more likely to purchase beverages in c-stores than women from other generations.
Considering ethnicity takes the variation even further. On average, 91% of consumers purchase a beverage in a c-store at least once a month. For Gen Z and millennial-aged African-Americans, that average rises to 97%; for Hispanics, it’s 95%, according to Technomic.
“This is not the same consumer that we think of traditionally,” said Robert Byrne, senior manager, consumer insights, for Chicago-based Technomic, and summit speaker.
These changes come as consumers see a lot more options to quench their thirst.
“Competition for the on-the-go beverage customer is definitely growing,” said Donna Hood Crecca, Technomic associate principal, citing increased use of coolers in fast-food and fast-casual restaurants, as well as drug stores and even category killers such as Best Buy. “All of those folks are looking to satisfy that consumer demand for [a beverage].”
And the data proves it. From 2010 through 2015, mass merchandisers saw their beverage volume sales increase 8.5%, while “other off-premise” retailers (such as club and dollar stores) saw 17.0% growth, according to Beverage Marketing Corp., New York. Somewhere in the middle are c-stores, which saw beverage volume sales grow 11.3% during the same period. Category volume overall grew 5.6%.
“The competition is going to grow for you as consumers are conditioned that they can get a beverage just about anywhere,” Crecca said.
What consumers are buying has also changed incrementally. The biggest change came in CSDs, which saw their share of stomach decline by 2.9 percentage points during the same time period, and bottled water, which grew by 4.2 percentage points.
In volume growth, ready-to-drink coffee showed the most significant percentage of growth at 18.5% during 2015, followed by energy drinks (8.9%), value-added waters (8.7%) and bottled water (7.9%), according to Beverage Marketing Corp.
So with varying shopping habits and increasing options, what makes a consumer choose a c-store over some other channel?
Certainly, “thirst” is the most significant and obvious reason for purchasing a packaged beverage in any location, at 56% of respondents, according to a Technomic survey. Thirty-one percent said a “convenient location” was a significant reason, followed by “It’s the beverage I always get” (30%).
A “conveniently located” store is the most common site attribute cited by consumers (70%), while “a variety of beverage types” is the top store-offering attribute (52%).
However, it’s where the generations divide that beverage categories are seeing growth.
- Forty-six percent of consumers ages 18 to 34 “at least occasionally” purchase energy drinks in convenience stores; only 20% of consumers 35 and older do.
- Fifty-eight percent of those 18 to 34 purchase ready-to-drink coffee beverages, compared to 49% of those 35 and older.
- Forty-one percent of younger consumers purchase sports drinks, while only 28% of older consumers do so.
Where consumers 35 and older do outpace younger generations is in consumption of CSDs and iced tea.
It’s around these need states—elements such as hydration, energy and meal replacement—that beverage suppliers and retailers are trying to stay ahead of trends through innovation, space allocation and promotions.
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