Tired? There’s a shot for that. Nervous? There’s a shot for that. Can’t sleep? There’s a shot for that. Have a hangover? Yes, for that too.
Single-serve energy shots garnered $7.8 million in c-store sales in the year ending Oct. 30, 2016, according to IRI, with top brand Living Essentials commanding 93% share. But the 2-ounce trend has fully expanded into new functions. Anti-hangover, sleep and relaxation shots are now available in numerous varieties, and manufacturers and entrepreneurs are innovating in the space all the time. It mirrors much of the growth trends in the cold vault, where rare is a new rollout that doesn’t boast a functional attribute.
So what do you carry? Where’s the momentum? And how do you merchandise the shots for optimal movement?
Proceed With Caution
Despite the popularity of functional shots, the category isn’t without controversy. Some new products contain an ingredient that’s been called a “drug of concern” by the Drug Enforcement Administration (DEA). It even has been banned in five states.
Kratom is an herbal supplement and an active ingredient in many relaxation shots. The herb, part of the coffee family, has opiate and stimulant properties. It is used for chronic-pain management and to relieve withdrawal symptoms for opioids and alcohol.
On Aug. 30,2016, the DEA flagged kratom as an intended addition to Schedule 1 of the Controlled Substances Act. Schedule 1 drugs, which include heroin, marijuana and ecstacy, are drugs with no medicinal use and high potential for abuse.
It sparked protests from consumers and retailers who solicited the help of their government representatives. As a result, 60 members of Congress sent letters to DEA administrators, along with a petition with more than 140,000 signatures, to keep kratom out of Schedule 1 classification. The DEA withdrew its notice of intent in October, opening a review period for consideration and public comment that ended in December.
But several states, including Alabama, Indiana, Tennessee, Vermont, Wisconsin and Arkansas, along with the U.S. Army, have already banned kratom. Despite this—or perhaps because of it—it’s a force in the shot world, often advertised as a product in its own right rather than just an ingredient.
One player in this controversial space is Ultra Enhanced Gold, which contains kratom as well as L-Theanine, white willow bark, sacred lotus, passion flower and California poppy. It claims to help users relieve pain, recover and relax. Ultra Gold emerged after a similar product, Vivazen, achieved a 1,064.4% increase in dollar sales over a year period, according to Nielsen—only to be banned by the FDA.
Steve Montgomery, president of b2b Solutions LLC, Lake Forest, Ill., advises retailers to use caution with products containing ingredients that are “at best questionable and at worst harmful,” pointing to the “bath salts” incident as a case in point.
“These items should only be purchased from established suppliers and known brands,” says Montgomery. “This may not eliminate all the risks but should help minimize them.”
Keep your radar up for companies—whom Montgomery calls “trunk slammers”—that appear to be trying to make a fast profit by rushing products to market or using nontraditional methods to call on retailers. Such companies are often not careful in the ingredient-sourcing production processes.
Smart Shots
Of course, opportunities exist to expand the shot category beyond traditional energy players, and c-stores are uniquely equipped to sell functional shots. Consider stocking them by the registers with other shot options, but also with over-the-counter medicines and health-and-beauty-care products to attract customers looking for pain-relief alternatives.
But just as with vetting vendors, take caution when merchandising these products. Montgomery recommends displaying items where store staff can carefully monitor them. Shelving them back by the cold vault or deep in the aisles puts them at risk of theft or, in the case of age-sensitive products, misuse by children and young adults.
Functional shots—energy or otherwise—may also offer unique market-basket opportunities, and an examination of how energy drinks sell may provide ideas for bundling or cross-merchandising ideas with shots. According to sales data from Management Science Associates, Pittsburgh, full-size energy beverages are the top-selling packaged beverage during the morning (6 to 10 a.m.), and second most common from 3 to 7 p.m. It’s the second most commonly purchased item with cigarettes (following carbonated soft drinks) and alternative snacks (also following carbonated soft drinks). Energy drinks also often appear in a market basket of fuel, lottery, other tobacco, beer and confectionary items.
Regardless of what’s inside, the convenient, palm-sized-portion shot has proven its place in the c-store. So carefully vet and monitor your vendors, test different merchandising options and ride the shot wave in the way that’s best for your brand.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.