The Thirst For Knowledge

10/1/2012

Use these top 10 trends to refresh your packaged and malt beverage strategies

Thinking about drinks? Convenience Store News has combed through the latest c-store industry data, beverage industry data and our very own exclusive CSNews research reports to compile a top 10 list of the "signs of the times" in the cold vault.

1. Smaller sizes command the spotlight. A downsizing of packaging is now popular in packaged beverages due to consumers' calorie and cost concerns. From the retailer's perspective, "the idea is to get consumers strapped for cash to buy a drink and not leave the store empty-handed," relayed Bonnie Herzog, managing director, beverage research for Wells Fargo Securities in New York.

2. Package "lightweighting" goes along with that. As smaller sizes push ahead in packaged beverages, so too, does reducing the packaging weight/size, also known as "lightweighting." Manufacturers are doing this not only as a cost-savings move from production to market, but also as an environmentally friendly effort. Lightweighting may also enable retailers to stock a bit more in the same space and encourage consumers to buy more and carry more due to the reduced weight.

3. Twofer promotions maintain muscle. Promotions that allow customers to buy two packaged beverages at a better price (individually speaking) than if they had only bought one are reportedly the most popular around the convenience channel, with no sign of stopping. The loss in margin is worth the gain in dollar ring, according to many convenience store operators. Some say twofers have refueled the energy drink category, bringing it back into double-digit increases. During the hot months, "threefer" promotions have even popped up with varying degrees of success.

4. Java moves over as the morning beverage. It certainly isn't all about hot coffee in the morning anymore. Energy drinks, bottled iced coffee drinks, ready-to-drink teas, hybrid juices and carbonated soft drinks are increasingly more popular with younger generations looking to get a preferably colder "morning buzz." That is one reason why energy drinks are considered a mainstay. As some retailers tell it, half of their morning customers head for the coffee machine and half head for the energy door.

5. Beer caves grow as a forward-thinking dimension. Just like with higher-quality food-service, c-stores are featuring deep walk-in brew coolers as another store attribute and shopping attraction. The caves allow retailers to drive foot traffic to an otherwise low-traffic corner of the store; stock and sell bigger packages of cold beer; and add more microbrews and crafts, both of which are on-trend in the malt beverage category.

6. Chilled wine is very fine. According to the latest research from Mintel, more consumers are drinking wine at home and are thus seeking value-priced wine options (preferably chilled) in off premise channels such as c-stores. Mintel found that wine drinkers are rating California wines as the topmost quality wines, outpacing wines from traditional wine-producing countries such as France and Italy.

7. Innovation swirls around finding that "perfect" sweetener blend. Whether it's diet drinks, mid-calorie sodas or naturally sweetened beverages, "companies are racing to find the perfect sweet blend for consumers," noted Wells Fargo's Herzog. "But consumers are fickle; they want something that tastes the same and with the same 'mouthfeel' as sugared drinks, but at a significantly reduced caloric content." Currently, many kinds of altered sweetener profiles are getting the beverage industry's attention.

8. Women and children are the bull's-eye for healthier beverages. It's no secret that "healthier" beverages are not a big push at c-stores â unless your store has a large female demographic or wants to attract one. Mintel research recently revealed that "food-based" energy drinks, fresh-juice-based energy drinks, coffee extract energy drinks and those sweetened with stevia may appeal to women who, so far, lag behind as consumers of energy drinks. Moms are also attracted to "healthier" kids beverage SKUs, such as real-juice TummyTicklers that are sold at some c-stores.

9. Higher-quality beverages can be an on-the-go hit. Despite the stereotypical "quick and cheap" c-store consumer and the fact that economic times are still questionable, many c-store shoppers are on trend with wanting to treat themselves during hard times with a good quality, more "premium" beverage. While still budget-conscious, consumers are buying higher-quality beverages such as teas in glass bottles that cost up to $2 and even juice and protein drinks like Odwalla that sell for around $4. Industry trends show a majority of budget-conscious consumers seek out affordable luxuries, and they consider food and beverages to be just that. Individuals are also looking to boost their vitamin, mineral, antioxidant and Omega 3 fatty acid intake in a convenient format. High-quality packaged beverages of the near future are expected to fulfill this need.

10. Can technology gets special attention. The technological improvements currently swirling around beverages mostly have to do with cans. The use of self-chilling can technology is expected to result in increased category SKUs at c-stores, where shelf and cold vault space is already limited, Mintel reported. To help drive beverage purchases this summer, PepsiCo teamed up with Chromatic Technologies to feature cans with specialized ink technology that changes color when the can is chilled to 46.4 degrees Fahrenheit. This feature was touted as elevating the consumer interaction potential with the beverage package, thereby building excitement and increasing sales.