A Holistic View of C-store Beverages

CHICAGO -- Convenience retailers from across the nation gathered here on Thursday for the 2012 Convenience Store News Beverage Retailing Summit. The Summit, the industry's first event to take a holistic view of c-store beverage retailing from packaged and alcoholic beverages to fountain and frozen dispensed drinks, included presentations from the Nielsen Alcoholic Beverages team leadership on opportunities for c-store retailers in beer, wine and spirits, and from event sponsor Red Bull on the future of energy drinks.

In addition to Red Bull, the Summit was sponsored by Wilbur Curtis Co., Domino Foods Inc. Foodservice, Insight Beverages, New Whey Nutrition, Parish Manufacturing, Scotsman Ice Systems and WhiteWave Foods.

Retailer participants included representatives from 10 of the industry's largest and most innovative chains, including BP ampm, Alimentation Couche-Tard's Circle K Stores unit, RaceTrac Petroleum, Giant Eagle/GetGo, VPS Convenience Group, Thorntons, Tedeschi Food Shops, Wawa, Casey's General Stores and Hill City Oil. Wholesaler Eby-Brown also contributed to the roundtable discussions.

The event delved into the beverage categories of:

• Beer
• Carbonated soft drinks
• Hot dispensed beverages
• Non-carbonated and alternative beverages
• Cold and frozen dispensed beverages.

Danny Brager, vice president, group client director, beverage alcohol team, at Nielsen, pointed out that the convenience channel is growing dollar sales in alcoholic beverages faster than all other outlets combined, according to Nielsen research. Yet, he said c-stores have opportunities to grow even faster in several emerging product areas, such as alcoholic "pouch" drinks, a category that has doubled in sales over the past year, but hasn't caught on yet in most convenience stores.

Brager also noted that while wine sales are not huge at c-stores, industry retailers could benefit from following emerging trends, such as the rise in Moscato wine, which "has come out of nowhere and is very popular with women, younger, lower income and multicultural consumers."

Co-presenter Andrea Riberi, senior vice president at Nielsen, presented a comprehensive view of beer sales trends in the convenience channel. "Sizeable growth in premium, new brand introductions and growth in malternatives" are driving growth in beer, which has resurged since the end of the recession. Riberi noted that c-stores are under-developed against other retail channels in craft, import and super premium beers -- mostly due to lack of merchandising space for all the different craft varieties.

Guy Wooton, director of category insights for leading energy drink maker Red Bull, provided attendees with a look at the future of the energy category. Four trends, he said, will continue to fuel the growth of energy products:

• Consumers' insatiable need for an energy boost. "That need is stronger now than ever," he noted, adding that energy drinks have evolved from a "crutch," to a restorer of a user's energy to normal levels, to an "enabler" to increase and enhance a user's performance.
• A bigger focus on category management.
• Growth of energy's core demographics, especially high-indexing Hispanic shoppers.
• Continued category innovation. As Wooton cited, "108 new energy products were introduced in 2011."

The wide-ranging discussion at the CSNews Beverage Retailing Summit also touched upon retailer frustration with the challenge of managing their own space in the cold vault; specialty coffee innovations; and providing consumers with more choice and customization at the fountain area.

Stay tuned for more Beverage Retailing Summit coverage in the November issue of Convenience Store News.