Take A Shot
As the energy shot market continues to thrive, alternative shots search for success
The past few years have been good for the energy shots market. The fledgling product category made a number of strides in innovation and sales. Convenience Store News' 2012 Industry Report showed that health and beauty care items posted the largest sales increase among in-store merchandise items last year, with energy shots playing a major part.
Sales have been so good, in fact, that category leader 5-hour Energy recently announced that it sold $450 million in notes, due 2019, which it will use to expand production, extend its product line and explore strategic acquisitions.
And that's not the only kind of innovation going on. Shots themselves are becoming more than just energy boosters. Manufacturers are turning out more relaxation shots, anti-hangover shots and sexual performance shots. But will they be received as warmly in the convenience store market?
At least one alternative shot did well enough to win honors in last year's CSNews Best New Products Awards Contest in the health and beauty care category. The Zazen Sleep Formula Relaxation Shot was described as being especially useful for travelers who cannot take pharmaceutical products, and praised by several insomniacs on the judging panel.
Hangover Joe's recovery shot, an official licensed product of the movie "The Hangover," hit shelves in 2011 and "sales exploded," said Shawn Adamson, co-founder of Hangover Joe's Inc., who noted that convenience stores are the No. 1 sales point for the product.
Most customers tried the shot as an impulse buy, liked it and came back, according to Adamson. The shot is meant to be consumed following a night of alcoholic drinking.
While it is not an energy shot, some people also use it that way. "Tons of people use it every day because they like how it makes them feel," he said. There's also an incremental business with sufferers of migraines.
In general, though, convenience retailers haven't given alternative shots as warm a welcome as energy shots, and some have reported sluggish sales when they tried. Others haven't seen much initiative from the manufacturing side.
"I have never been presented with an alternative shot product line," Max Hunsaker III, vice president of marketing for ProStop Convenience Stores, told CSNews. "I'd say that we are open to it. The success of energy shots demonstrates that there is a customer audience for products like that, but no one has emerged as a leader within the alternate shots category, at least as far as I'm aware."
Hunsaker speculated that for alternate shots to find a solid place in the convenience store environment, it is a two-step process. First, a manufacturer needs to commit to a broad-based advertising strategy with the capital to back it up. "Customers need to know that these products exist and they can make their lives better," he said.
Once product awareness is sufficiently established, customers who come in, see the product and try it will ensure its success or failure.
"I question the extent to which the 'trend' is being manipulated by manufacturers trying to create a new market," he said. "If they can convince me, then they've hit their goal which is to sell product, but that doesn't help me sell theirs because they haven't invested in a marketing mix to create consumer demand."
Manufacturers also need to compete on different aspects besides price, said Hunsaker. Those who position their shots on a lower price point are less attractive because all it does is cut into his penny profit.
Ultimately, ProStop is open to the possibility of doing more with alternate shots, but conditions have to be right.
"Trends alone don't bring success. We have to have the right product with the right marketing strategy," Hunsaker concluded.
For comments, please contact Angela Hanson Assistant Editor, at [email protected].