2018 will be “a challenging year unless something takes off.”
This take on the state of beverage retailing from Kevin Platt, director of category management for Worcester, Mass.-based Nouria Energy’s Lil’ Mart, isn’t pessimistic. It’s realistic.
There will never be another Coca-Cola Classic. And it’s highly unlikely there will ever be another category-creating juggernaut like Red Bull. Those beverages remain the most popular products in the two best-selling beverage categories in convenience stores. But consumers’ increasingly evolving need states—driven by changing tastes, shopping habits and health concerns—make it nearly impossible for a single brand to rise to the level of a Coke, a Red Bull or another household beverage name.
The challenge for retailers trying to reset their cold vault is consumers are “not generally switching from one beverage to another,” says Clint McKinney, group director of category strategy for The Coca-Cola Co., Atlanta. “It’s not an ‘or.’ It’s an ‘and.’ Consumers look for balance and, depending on the day, time of day or consumption occasion, that may mean a sparkling water or a sparkling soft drink, an organic tea or a lemonade.”
That puts more pressure than ever on retailers to really know a market and to know what works and when in a store. There’s a stronger need for retailers to embrace consumer trends on the way up and have a plan to move on to something else if or when the bottom falls out, according to Gary Hemphill, managing director of research for Beverage Marketing Corp., New York.
“Convenience retailers need to … be open to taking on new products,” he says. “They must also merchandise their beverages well because so many of convenience-store beverage sales are impulse-driven.”
What follows is CSP’s annual look at how the biggest beverage categories in c-stores are performing, and what is coming down the pike.