The Clinton Parkway Hy-Vee convenience store in West Lawrence, Kan., is located near the 25,000-student University of Kansas, which heavily influences the product mix. Let’s take a look inside the site’s cold vault and see how well it’s keeping up with beverage trends.
A. Private Labeling
It could be the lingering effects of the recession, but more U.S. consumers are purchasing private-label products. Total U.S. retail sales of the overall private-label food and beverage market were $102 billion in 2013, up about 2% over 2012. Unit sales were virtually flat, with average unit prices higher during the year, according to market research group Packaged Facts’ Private Label Foods & Beverages in the U.S. (8th Edition), which was published in September.
B. High-Functioning Beverages
For the 10th consecutive year, according to New York-based Beverage Marketing Corp., sales of carbonated soft drinks have dropped. Last year’s decline was 2.3%. Filling that void are healthier beverages: water, fortified beverages, juices, teas, smoothies, yerba mate and sometimes even energy drinks. Chicago-based Mintel saw sales of sports drinks, nutritional drinks (including meal replacements) and protein drinks rise by 48% from 2008 to 2013. This segment totaled $12.3 billion in sales last year and is expected to grow by 44% to $17.7 billion by 2018.
C. Milk It!
Which came first, the c-store or the milk? Milk, of course. It’s the product many retailers have always pushed, even before gasoline. Despite that, it’s been a difficult category for the industry in recent years as grocers and mass-merchandisers play the pricing game, preferring volume to margin. The struggle is reflected in industry sales data. In the first half of 2014, milk unit sales dipped 2.9% (on top of a 6.1% drop in 2013) while dollar sales grew slightly at 1.6%, according to Chicago-based IRI’s convenience-store data.
D. Cold Beer, Warm Hearts, Can’t Lose
Nearly 22% of c-store shoppers purchase alcohol beverages every month, according to Technomic. And it makes sense that this number would be elevated on a college campus. As it is, domestic beer is by far the leading alcohol beverage purchased at c-stores, with 87% of all beer consumers purchasing at least once a month. However, craft and micro are making inroads, with 25% of all monthly beer purchases going their way, especially among younger consumers.
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