Single Store Owner

JAN-FEB 2016

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26 JANUARY 2016 With lower-priced gas having a favorable impact on c-store beverage sales, according to a recent Wells Fargo Securities "Beverage Buzz" survey, packaged soft drinks remain vital in the channel. IRI reports that sales of packaged carbonated drinks in U.S. c-stores were up for the 52-week period ending Nov. 1, 2015, with dollar sales rising 3.7 percent over the prior year and unit sales growing 1.6 percent. Tose favorable tailwinds put bever- ages in a better position to capture afernoon sales, but evolution in the category has also made packaged sof drinks more snack-friendly for shoppers seeking products with a healthier halo or a twist on tradi- tional sodas. Smaller portions, for example, in the form of 7.5-ounce mini cans, and bottles with 12.5 or 16 ounces instead of 20, mean fewer calories and less sugar in addition to lower prices. Another potential bright spot is the rise of craf/natural sodas. Tough a small category that is still quite young, these drinks are piquing consumers' interest for a variety of reasons, Mintel research indicates. As c-stores look to leverage beverage opportunities during the afernoon snacking period, one promising concept is a nonalcoholic "happy hour" similar to those at some quick-service restaurants: Taco Bell positions the period from 2 to 5 p.m. as Happier Hour, with fountain drinks and freezes priced at $1. Sonic, which has had its happy hour program in place nationwide since 2007, ofers fountain sof drinks, slushes and other drinks for half price from 2 to 4 p.m. Te concept has proven efective in helping to transform an of-peak period into a new afernoon daypart built around snacking. Even without discounting, c-stores ofer such a broad variety of beverages that simply marketing the idea of the nonalcoholic afernoon happy hour may elevate the carbonated packaged drink section (and the fountain) as a destination for bev- erage-oriented PM snacking. —Jenny Anderson What consumers like about craft sodas C-store packaged beverages 2014 dollar sales SOURCE: MINTEL, CARBONATED SOFT DRINKS: SPOTLIGHT ON NATURAL/CRAFT, JUNE 2015 SOURCE: MARKET RESEARCH, 2015 C A R B O N AT E D B E V E R A G E S Carbonated packaged beverages change with the (snacking) times % indicating attribute is appealing Bottled water 9.8% Sports drinks 9.7% Juice/juice drinks 8.5% Iced tea (ready-to-drink) 5.5% Enhanced water 5.5% All other packaged beverages 4.1% 54% 49% 42% Natural/real ingredients Premium/high-quality ingredients Creative favors Carbonated soft drinks 33.0% Alternative beverages (including energy drinks) 25.1%

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