You are here
CHICAGO — Convenience stores have moved beyond being the traditional hub for gasoline and cigarette purchases. Today’s modern c-stores have become shopper destinations for prepared foods, coffee, and an emerging contender: energy drinks.
In fact, the growth of energy drink consumers can have a positive impact on the entire convenience store, according to Laura-Lynn Freck, shopper insights manager for Red Bull North America, who spoke at the fifth-annual Convenience Store News Beverage & Beer Retailing Summit, held June 22-23 at the Hard Rock Hotel in downtown Chicago.
In her presentation, entitled “Snacking & Daypart Opportunities in C-stores for Energy and Beverages,” Freck shared the results of a two-pronged research study of consumer and convenience store retailer insights. The study was conducted in conjunction with Carbonview Research, a sister company of Convenience Store News.
Soda and energy drinks are "destination categories" in c-stores, Freck explained, with 53 percent of shoppers purchasing soda and 28 percent purchasing energy drinks, followed by coffee (16 percent), water (15 percent) and sports drinks (14 percent).
“I see a great deal of our customers trending toward energy drinks as a main staple instead of an every-now-and-then purchase,” one retailer in the study remarked.
Another commented: “The energy category is crucial to helping meet our objectives and selling goods."
And still another retailer added: “Counterintuitively, energy continues to grow nicely, despite the trend toward ‘clean’ ingredient labels. I can assume the customer’s desire for functional benefit outweighs any angst they feel regarding the ingredient label.”
Energy drinks can be classified as a mission driven item, Freck noted, while snacks and other beverages satisfy impulse occasions.
Seeking an energy boost remains the foremost reason for the purchase of an energy drink, according to the study, cited by 61 percent of purchasers. In addition, more than a quarter of shoppers said they purchase energy drinks as an impulse buy (32 percent), because they craved it (30 percent), or because they sought a snack (27 percent). On a lesser scale, 23 percent were saving their energy drink for later, while 20 percent of purchasers sought it as a treat.
Along with their energy drink purchase, these consumers are also buying salty snacks (53 percent), sweet snacks (50 percent), prepared foods (30 percent), meat snacks (17 percent) and fresh foods (9 percent), creating an opportunity for c-store retailers to capitalize on increasing their basket size, according to Freck.
One way to do so is with bundling. The research revealed that heavy energy drinkers will bundle their energy drink purchase with either a salty or sweet snack, or a soda. Light energy drinkers will bundle their energy drink purchase with a sweet snack, soda or prepared food item. Heavy buyers are defined as frequenting a c-store for these products several times a week or once a week.
Additionally, energy drink buyers are more likely to purchase energy bundles, and equally likely to purchase beverage bundles, with a snack (76 percent) or with a prepared food item (57 percent).
Overall, Freck wanted the c-store retailers in attendance to leave with these six key takeaways:
1. Foundation. Foundational attributes are a key need to perfect in order to build loyalty with shoppers.
2. Function. Energy still holds a functional niche, leading it to be more of an occasion-based beverage.
3. Trip Driver. Energy drives bigger baskets in the store. Heavy energy buyers are also far more likely to be heavy buyers of snacks and other beverages.
4. Mission. Forty-two percent of energy purchases only have energy in the basket, the highest ratio out of beverages and snacks in the c-store environment.
5. Merchandising. Merchandising snacks and beverages together can lead to more purchases, specifically right at the counter, at the foodservice area, or up front.
6. Bundles. New opportunities are with prepared food and light energy buyers. A key time for bundles are between 10 a.m. and 2 p.m.
This year's CSNews Beverage & Beer Retailing Summit was sponsored by Red Bull North America as the gold sponsor, and V8, Sparkling ICE, 99 Bottles and Jumex as silver sponsors.