NACS Show Rewind: Unbottling Cold Vault Success

CHICAGO — Unlike a decade ago, when the vast majority of innovation in the cold vault occurred in the non-alcoholic space, these days find beer, wine and the "beyond beer" segment of hard seltzer, cider, traditional flavored malt beverages and emerging ready-to-drink (RTD) cocktails significantly contributing to innovation.

"What we've seen in the past few years is a lot of innovation is coming to alcohol now," Chris Rapanick, director of business development at NACS, said during the "Cold Vault in 2021: Trends & Takeaways" education session at the recent 2021 NACS Show. 

Within the beer category, flavored malt beverages, craft, super premium and imports were the segments to experience the greatest sales growth when comparing the period of January to July 2021 vs. January to July 2019, Rapanick cited. 

He urged convenience retailers to "follow these numbers" and use NACS State of the Industry data or other benchmarks to determine what products should be cut to make room for emerging opportunities.

Lauren Quaglia, national channel manager — convenience at The Boston Beer Co., highlighted some ways that convenience store operators can get the increasingly important beyond beer shopper to make a purchase at their stores instead of going to another retail format.

These shoppers typically consider what segment they want first, such as hard seltzer vs. flavored malt beverages. They then think about brands, and finally pack size. In contrast, traditional beer drinkers think about brand first, then size, then segment, she explained.

"The decision can happen really quickly," she said. This makes it extremely important for c-stores to have various segments available and grouped together in an organized fashion.

To build the optimal beyond beer assortment, retailers should flex and adapt, revisiting what's working and what isn't more frequently than they do with other packaged beverage segments, Quaglia advised. 

Four key trends are likely to continue driving "beyond beer" growth:

• Convenience — This attribute favors RTD options, which don't require shoppers to buy and mix hard liquor.
• Better-For-You — This includes hard seltzer, as well as items like zero-sugar drinks.
• Flavor & Variety — Younger drinkers seek these qualities in particular.
• Premiumization — Many drinkers are moving to more premium beer, which delivers higher margins.

Todd Bollig, senior director of category management and shopper insights at The Boston Beer Co., encourages c-store retailers to keep their cold vaults organized while allowing room for growth in key segments. It is also important to have single packs of growing segments available at eye level to drive impulse purchases, he added. 

Retailers should be ready to tweak things and make adjustments based on the results.

"If it doesn't work, change it," Bollig said.

Meanwhile, the packaged beverages section of the cold vault is a reliable category, consistently staying flat or increasing in sales over the last five years. Despite being a mature category, "this is all dependable growth," Rapanick stated.

Additionally, while it was commonly assumed that skyrocketing packaged beverage sales in 2020 were an anomaly due to the COVID-19 pandemic, sales in 2021 to date indicate that packaged beverages are still driving merchandise sales growth, he noted. 

The 2021 NACS Show took place Oct. 5-8 at McCormick Place in Chicago.