Drinks With Added Flavor or Added Ingredients and “2-for” Deals Drive Sales.
The landscape of beverage sales is changing. The pandemic brought out consumers who wanted to stock up on multipacks while neglecting singles. Now we’re returning to a more normal consumer behavior, and sales of singles have come back.
Retail promotions were scaled back during the pandemic since people were spending more freely and pricing power was strong. Now people have settled more-or-less into their pre-Covid routines and their old way of consuming beverages, except that they want more.
Energy Drinks Plus…
As far as non-alcoholic drinks, Energy Drinks continue to dominate, but consumers want bolder flavors and nutritional or performance enhancements. The sector is expanding with new offerings like Ghost Energy, Red Bull’s Fig Apple flavor, and 5-hour Energy’s large 16-ounce cans.
“It’s hard to explain. You expect energy to peak at some point, but it hasn’t. Energy drinkers are hooked,” says Joseph Brumfield, senior category manager of packaged beverages for La Lomita Inc…”
“Low- and no-sugar innovations are expanding, and the innovation pipeline keeps filling up just when you think it might have peaked,” he says. *
Consumers have been craving even more from their energy drinks than just a pick-me-up. It may be extra supplementation to enhance endurance or recovery for the daily athlete. It might be an extra something to help concentration for students cramming for exams. Somehow there needs to be “more” than the familiar standby. The great thing for many Convenience Stores is that this segment of energy drinks has increased by 10-15% in the last year.
Normalcy,… Kinda?
So now that the pandemic era abundance has been depleted for most American consumers, finding a good value has become important again.
Convenience store chain G&M has found that bundling products to create value deals can be very effective. Mike Orwat, category manager of packaged beverages for G&M believes in activating combo deals like:
“two-fors” and “buy one, get a second at a discount” on SKUs within the same brand family, such as Arrowhead or Poland Springs water. Cross promotions tied to all package beverages have long found traction for the West Coast chain, and energy drinks tied to food service deliver results. G&M stores also combined Red Bull into a Taquito meal deal in late 2022 and saw transactions increase, Orwat says. *
Part of a successful strategy now includes using multipacks instead of single-serve for important floor displays. Optimizing limited space within a few cooler doors also means keeping vigorous track of what sells and what kind of margin each item brings in. Brumfield at La Lomita Inc is excited about their new line of private-label bottled waters. The new offerings will be a clear way to improve margins in their stores.*
Carbonated Beverages
The well-known brands continue to dominate carbonated beverages though some smaller players have found niches with strong flavor-forward drinks, like Jones Soda Key Lime Pie.
In C-stores, carbonated drink sales revenue increased by approximately 7.5% in 2021 and 2022. Unit sales, however, while up 1.7% in 2021, were down 2.7% in 2022, making the focus on increased sales volume important going forward.*
It’s a Post-Covid World
Consumers have been coping with high inflation as well as spending money on things they haven’t been able to do over the last couple of years, like dining out and traveling. They are as concerned as ever about getting good value as much as experiencing bold new flavors.
The industry is concentrating again on everyday low prices (EDLP), promotions, and flexibility with mix-and-match for singles. Consumers are inspired now to save money by purchasing large multipacks, not because they want to stock up but because of the better value.
Making sure there is some variety mixed in with the name-brand products helps get regular shoppers to try an additional item. Ready-to-drink cocktails have continued to grow and can inspire impulse buyers.
Yes, we’re in a post-covid world, and patterns that used to work for business are returning. At the same time, consumers are focused on value and willing to pay for new experiences and bold flavors. Be ready for normalcy, … with a twist.
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