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NATIONAL REPORT — When a customer enters a convenience store, the odds are they plan to purchase a packaged beverage — or will end up doing so anyway. However, with products ranging from carbonated soft drinks (CSDs) to tea to energy drinks, this category takes work to properly manage.
One important step to optimizing packaged beverage sales is simple: look at the facts. "We recommend that customers use sales and consumer preference data to determine what products to sell and how and where to sell them within the store," Clint McKinney, director of Convenience Retail Category Advisory and Space Strategy for The Coca-Cola Co., told CSNews Online.
Another strategy recommend by supplier experts is to capitalize on emotion by encouraging impulse purchases. "An effective way to grow incremental sales at retail is through making impulse purchases more visible," said Ivan Alvarado, Dr Pepper Snapple Group's director of category management. He described the most visible positions in the cold vault as a "strike zone."
Placing impulsive flavors in the strike zone can do more for incremental sales than simply putting the biggest brands there, Alvarado explained, noting that flavored drinks are more impulsive than colas.
"We need to merchandise in ways that we can proactively influence what consumers see and choose," Alvarado said. "If a shopper wants a cola, they will find it wherever we put it in the store. The same is not true for root beer or ginger ale. They are not thinking about these flavors, and our job is to make them visible and generate that incremental sale."
Flavored CSDs in general have seen strong growth in the last year, according to Coca-Cola, thus providing retailers an opportunity to capitalize.
Alternatively, it might be a good idea for c-store owners to pare down the variety of options they offer in the energy drinks segment.
"Many suppliers have attempted to jump into the business and subsequently many retailers have taken on far too many unproductive products, which makes for a very crowded and confusing category to shop," said John Showalter, director of business insights for Red Bull North America.
While retailers shouldn't be afraid to add space for energy drinks, they must carefully examine available products and stock what sells rather than "me-too" items," he explained.
Overall, variety is crucial, provided the product assortment is made up of brands consumers want.
"Shoppers want choices and have brand preferences, and it is important that retailers have these brands available," Showalter said. "If there is only one brand, there will be less competition, leading to lower investment and lost households. Over time, this will translate to category declines."
Editor’s note: This Bonus Content story is an add-on to the Convenience Store News Guide to Category Management, published in February. A digital edition can be accessed by clicking here.