Ruler Cooler

Sarah Jackson and David Oberman may not realize it, but as a pair they embody a curious trend in the c-store industry’s packaged beverage category these days.
“I used to drink energy drinks every day,” said Oberman, 20, standing outside a TravelCenters of America on Interstate 90 at the Ohio-Pennsylvania border. “I was an energy drink diehard, but I quit.” 
His 18-year-old girlfriend, Jackson, added: “I prefer Vitaminwater nowadays. I just grabbed it one day and liked it.” 
The two said they’ve departed from occasional energy drink purchases, opting instead to test other brands and beverages for a host of reasons, and curiously price was not a consideration.
Oberman, a longtime Monster drinker, now prefers a root beer over anything else, but Jackson said she finds herself increasingly committed to Coke’s Vitaminwater because of its taste and perceived health benefits. 
While energy drinks are still posting solid performance in the convenience channel—increases of up to 15% last year, according to Nielsen—the segment may be seeing a slowdown in growth across all channels as consumers tighten budgets and forego items sometimes perceived as “premium,” according to a recent Beverage Digest report. 
Energy drinks, it seems, may also be seeing sluggish sales in recent months because the category is reaching a saturation point; year after year of gangbuster growth is only sustainable for so long. 
A Beverage Marketing study last month showed the energy drink segment may in fact be seeing some fragmentation as new beverages are stealing thunder by adopting energy-drink qualities but adding twists or variations: drinks with green tea, B-vitamins or proteins, for instance. 
Functional Focus
This increased demand for functional beverages offering better-for-you qualities is being seen in virtually every segment of packaged beverages, where even some sodas are adding protein to their list of ingredients. 
No matter what the trend, the packaged beverage category is of paramount importance to c-stores these days. In the second quarter this year, the category as a whole accounted for 11% of in-store sales in the convenience channel, earning a third-place spot in the Top 10 highest-grossing categories, according to Nielsen data.  
Helen Wood, of Harrisburg, Pa., is among those consumers who are seeking specific drinks that have healthier benefits. 
Filling up her car’s tank at a Shell store in Pennsylvania, Wood said she generally chooses a ready-to-drink diet tea based foremost on brand—her preference is Lipton—also with little concern for the beverage’s price. 
On the other hand, north-central Ohio resident Cassie Reynolds, 20, said she consistently chooses a 20-ounce Arizona Ice Tea because of its standard 99-cent price. “Always Arizona, and always with a pack of Trident gum,” she said. 
Reynolds’ mother, Lisa Reynolds, 44, said she chooses her drinks—usually a bottled water—based largely on price. When she isn’t buying water in bulk from a grocery store, the elder Reynolds said she’s apt to grab the first bottled water she comes across at the convenience store. 
The same rang true with Mike Hain, 42, who stopped by a Country Fair store in McKean, Pa. “Water is water,” Hain said, adding that he prefers to buy the bottled water that’s selling for “less than a buck.”  
Often, that bargain price is found in a private-label brand. It’s a point not lost on convenience chains like Rutter’s, Wilson Farms, Kwik Chek and others who are pushing private-label growth in their stores.  
And with bottled water, energy drinks and a litany of spinoffs from both sub-segments diversifying the packaged-beverage category—with probiotics, nutraceuticals, energy shots and such—carbonated soft drink makers have long been moving to reclaim their share of the market.  
Consumers diverging from carbonated soft drinks to ready-to-drink teas, enhanced waters and the like have, in fact, been a savior for companies like PepsiCo, whose lackluster CSD sales in recent years were compensated by strong sales in other subsegments such as its Lipton Iced Tea, according to Beverage Digest. 
This all misses one colossal point, however: Coke and Pepsi make up more than a fourth of the volume in the packaged beverage category, so carbonated soft drinks are still commanding sizable sales.  
Battle of the Brands
Chalk it up to brand loyalty and decades-old habits in diehard consumers like Doug Nelson, 37, of Ohio, whose standard packaged-beverage purchase at a Circle K includes a 20-ounce Mountain Dew. “That’s all I ever drink,” Nelson said. “I used to drink Pepsi or Lipton or Nestea iced tea, but it doesn’t matter now. It’s always Mountain Dew.”
Near Edinboro, Pa., Country Fair customer Kelli Roger, 23, echoed the same. “It’s always Coca-Cola, $1.29 or whatever it costs.” 
At the same Country Fair store, 29-year-old Keith Hadlock: “I’m here at least one time every day, and I’ll get whatever I’m in the mood for – a coffee or energy drink – but usually a Pepsi.”  
At a 7-Eleven in Chicago, Jerome Garrity, said he was a loyal energy drink consumer, but finds himself more and more purchasing "old reliable Mountain Dew. When I was in college, this was all we had so it kind of grew on me."
Other CSD purchasers aren’t so ferociously brand-loyal, though they’re no less committed to soda. At a Delta Sonic store near Erie, Pa., Thurston Watson, 45, was weighing a choice between Pepsi and Coke. “Whatever’s there first, that’s what I get,” Watson said. 
Buffalo resident Sherry Arnold, 52, said it generally comes down to availability and price. “I’ll go with a Sprite or Sierra Mist,” she said, “but sometimes I’ll just get a bottled water if it’s there.”  CSD

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