The coolers in convenience stores today are a great deal different than they were a decade ago. While carbonated soft drinks (CSDs), juices and teas used to among the top sellers in the cold vault, they’ve slowly given way to energy drinks, bottled water, enhanced waters and teas. As the popularity of CSDs wanes, so does their space in convenience coolers, but not necessarily their importance.
"Where CSDs used to require 75% of the nonalcoholic cooler space, with the strides the noncarb drinks have made, it’s really now a 50-50 split" said Jim Callahan, marketing director for Geo. H. Green Oil Co. Inc. in Faiburn, Ga., which owns 50 c-stores and distributes to another 114 units.
Despite being reduced to half of Green Oil’s cooler space, CSDs, juices and teas still generate strong sales, especially since CSD suppliers, most notably Coke and Pepsi, continue to introduce new products to keep the category fresh.
One message Callahan sends out to his dealer-operated stores is to capitalize on the power of promotions. An assertive approach could produce profitable packaged beverage sales, he said. Green Oil is rewriting the book on CSD purchases. Through aggressive promotional activity, the company has become a destination for take-home packaged beverages—the Coca-Cola 12-pack, in particular.
"Cigarettes still hold the No. 1 sales spot in our stores at 30.9%. Packaged beverages come in second with 16.2% of sales, followed by beer at 11.9%," said Callahan. "We sell a lot of packaged beverages by the case off the floor. The top-selling package by far is 12-pack Coke products—our six stores sell more than 60,000 cases of Coke per year. We run an everyday special and have found it very effective in building our overall inside business."
The key to capitalizing on category trends is knowing what suppliers are doing. Of the 83 key decision makers to participate in CSD’s Brand Preference Study, 11%, or nine respondents, reported no sales presentations from soft drink, juice or tea suppliers in the last two months. In fact, 50% of buyers reported less than five presentations from the top 20 companies in the market.
However, 50% of buyers said they had received five or more sales presentations from CSD, juice or tea companies in the past 60 days. Another 17% had presentations from three or four category suppliers.
As expected, Pepsi and Coca-Cola ranked high among retailers. Pepsi (42%) edged Coke (41%) among buyers as having the most effective sales program. Cadbury Schweppes finished strong with 14% of chains reporting its Dr Pepper and 7-Up brands as having the best product quality in the cooler.
Among juice and tea brands, Tropicana, Lipton, SoBe, Minute Maid, Nestea, Dole, Veryfine, Campbell’s, Sunny Delight, Ocean Spray, Naked Juice and Tetley Harris all were recognized for having memorable sales presentations.
No matter what your retailing strategy is, Callahan said chains need to analyze the products on the market and adjust their product mix accordingly. "Take a look at your cooler setup and make sure it’s consistent with the times," he said. "National trends won’t necessarily apply to each of your stores so stick with what sells."