Cold Beverages Trends
by: Curtis Davison
Sparkling water has remained on the what’s hot AC Nielsen president’s report for Convenience Retailing for the last eight quarters. The most recent report has it at number one, delivering 50 per cent dollar growth.
One of the toughest challenges we face in convenience retailing is how do we deliver improved revenue margins and bottom line profits when some of largest categories such as tobacco, beverages and snacks are flat to declining in unit volume?
Convenience retailing is consistently showing modest revenue growth of four per cent over each of the latest 52 week periods. This growth is being primarily driven by inflation. This strategy is not a sustainable model during the tougher economic times that we foresee on the horizon.
Cold beverages has been one of convenience stores largest categories and is currently delivering on average three per cent growth. This is predominately being driven by lower carbonated soft drink sales, which represent the largest share of cold beverages. There are retailers who are showing significantly better results across all indicators, revenue volume and profit. You may want to ask them how they did it or what supplier has the magic bullet but the answer is right in front of you every day with your consumer.
Consumer trends are shifting but has your strategy in convenience retailing changed? Consumer trends are changing faster than ever. Has our space management approach for beverages changed? If not, you will never capture the rapid pace of change that is going on with consumers. In the 90’s when category management become popular consumer trends shifted about as fast as our dial up internet. Today the amount of information obtained daily and the pace of change means what I like today will change tomorrow. Yes, big categories sustain tough times but we cannot sit around and or expect them to start to grow again. Those retailers producing greater results have taken an approach to space management that has both art and science but the most important factor is they also apply forward thinking. So, I say, stop looking in your rear-view mirror, you’re in a self-driving car and the world is changing rapidly right in front of your eyes. Have the courage to change with it and reap the benefits.
In the beverage category, there are segments of business that are producing double digit growth year after year. Some of these segments include energy drinks, premium water, ice teas and sparkling water.
Sparkling water has remained on the what’s hot AC Nielsen Presidents Report for Convenience Retailing for the last eight quarters. The most recent report has it at number one, delivering 50 per cent dollar growth. This beverage segment is being led by, but not driven by, the brands Perrier and San Pellegrino–more so by consumers who are demanding all natural low to no calories.
So back to the harder question how do we deliver accretive growth to our business in a very large category? Add space for not only the strongest growing segments of today but also listen to your consumer and understand how and what they intend to purchase in the future. If your suppliers are coming in to tell you about the next great product they have ensure that their belief in the product and what it will add is consumer based. If you not sure, talk to your consumers. They are right in front of you every day trying to give you money for products they want vs products we want them to want.