8 Retail Insights From CSP’s Cold Vault Summit

CHICAGO -- Even as the Chicago Cubs were in Cleveland making history by winning the team's first World Series since 1908, attendees of CSP's Cold Vault Summit were in the Windy City focusing on the trends and data driving beverage sales in convenience stores and beyond.

The meeting brought together dozens of retailers, suppliers and data collectors to discuss the future of the beverage category. Here are a few highlights ...

Shaken by growing competition in single-serve beverages? Don’t get comfortable just yet; there’s more to come. “Competition for the on-the-go beverage customer is definitely growing,” said Technomic associate principal Donna Hood Crecca, noting increased use of coolers in fast-food and fast-casual restaurants, as well as drug stores and even category killers such as Best Buy. “The competition is going to grow for you as consumers are conditioned that they can get a beverage just about anywhere.”

Millennials and Generation Z are proving to be a boon to convenience stores' beverage sales. Technomic data show 59% of the overall population purchase packaged beverages in c-stores, while 62% of Gen Z and 65% of millennials see c-stores as a destination for packaged beverages.

Consumers who buy packaged beverages in c-stores also buy something else more than 80% of the time, according to VideoMining data. The top five items most often purchased with a packaged carbonated soft drink (CSD) are:

1. Foodservice (20% of the time)
2. Salty snacks (16%)
3. Cigarettes (14%)
4. Candy (11%)
5. Fountain drink (8%)

The top five reasons consumers say they purchase carbonated soft drinks, according to a Dr Pepper Snapple presentation:

1. It’s one of my favorite beverage brands.
2. I always buy this brand.
3. I wanted this flavor.
4. I wanted a beverage with caffeine.
5. I wanted a sweet beverage.

Anheuser-Busch is taking a significant step toward recognizing that not every convenience store is the same. Based on a variety of locations, consumer demographics, square footage, amenities and other characteristics, the beer brewer has designate “eight statistically significant breakouts” of c-store types. They are:

1. Highway hub
2. Community centerpiece
3. Mini-mart
4. Upscale hotspot
5. Local pit stop
6. One-stop shop
7. The second dining hall (i.e. college)
8. Vacation station

“We used to come to you with one convenience-store plan,” said Josh Haegele, senior director of category leadership. “We now have a better understanding of the shopper decision within these key archetypes.”

C-stores’ share of the wine segment has doubled in the past four years, according to E. & J. Gallo. The channel now accounts for 0.4% of U.S. wine sales, compared to 0.2% in 2012. “A $3.4 billion opportunity still exists for the channel,” said John Sokol, director of Gallo’s Center of Excellence.

Sales of sparkling water in convenience stores are expected to triple to $300 million by 2020, according to Nestle Waters North America’s Anthony Pitagora, senior manager of category and shopper solutions. “It’s a natural consumer shift” from sugary drinks as consumers look for healthier options, he said.

Speaking of health, as the millennial generation seeks brands that meet their needs, juice is changing to satisfy. For Campbell Soup Co., it’s an opportunity to expand its 83-year-old V8 brand. “Today we’ve got a variety of vegetable juices and energy drinks,” said Christine Pelkman, research and development manager. “Consider including signage in stores relevant to the healthy benefits your products offer,” said Carol Mannino, director of insights for Campbell. “Embrace the new transparency and be ready with a health and wellness assortment.”