Convenience Store News

MAR 2017

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56 Convenience Store News | MARCH 2017 | WWW.CSNEWS.COM 2017 points of distribution (2,800) and signifi- cant dollar sales increases ($10.7 million). • General Mills Convenience also worked with a large c-store customer to move crackers from the cookie bar to the warehouse salty set by leveraging Nielsen audit info. This research showed that merchandising crackers with other salty items is beneficial to the category. This move resulted in growth of both the cracker segment, up 13 percent, and the overall warehouse salty category, up 6 percent — both above comp market trends — and led to market share gains for this retailer. • By leveraging space-to-sales analysis, General Mills Convenience showed a customer that it had some segments and brands in the warehouse salty category that were not jus- tifying their current shelf space. By reducing these segments and brands and by simultaneously increasing segments and brands that deserved more space, this customer was able to optimize its assortment significantly. The customer showed the work to other manufacturers and it was referenced as best-in-class. The result was 10-percent growth, which was over twice the rate of the retailer's comp market. • General Mills Convenience aided a large distributor in allocating the correct amount of space across multiple categories, seg- ments and subsegments. The company armed the distributor's leadership team with the analytics, tools and custom recom- mendations that led them to making significant changes to their sets for optimal growth. This work has led to incremental SKU gains of approximately 15 SKUs across their snacking cat- egories, with an estimated 7,500 new points of distribution. Overall, to help retailers meet the distinct needs of c-store shoppers looking for a salty snack, General Mills' main focus this past year has been on increased distribution of core items. Across the total U.S., the top 25 salty snack items still only have an average distribution of 82 percent. General Mills has part- nered with both retailers and distributors to develop gap-fill pro- grams to target core gaps across the top salty snack products. General Mills Convenience's Category First team also worked with a few select retailer partners to leverage its Virtual Store capability. This allowed the retail partners to instantly see the visual impact of decisions in a virtual store, including creating the right adjacencies across the DSD salty, warehouse salty, nuts/seeds, and meat snacks segments. ••••••••••••• WINE & LIQUOR: E. & J. Gallo Winery E . & J. Gallo demonstrated its category leadership through a partnership with Wawa, the 700-plus c-store chain based in Pennsylvania. Working with Gallo, the retailer took an entire- ly different approach to the convenience wine category when expanding into the Florida market. For many years, the wine category in the convenience channel has been stagnant. Research shows that 38 percent of c-store customers buy wine somewhere, but only 4 percent of them buy within the conve- nience channel. This low conversion rate results in a potential loss of total wine business, but also misses a large generation of millennials, who in January 2016 surpassed baby boomers as the largest generational group over the age of 21. In 2016, Wawa opened 50 new locations in Florida. The retailer challenged the norms by providing a clean store format and best-in-class merchandising. Within the wine category, this new approach means a limited but thoughtful selection with innova- tive merchandising strategies, including alternative packaging to capture the young, on-the-go beverage alcohol customer. Gallo research found price to be the most important factor to 53 percent of millennial drinkers when selecting a wine. So, the focus was on creating a limited assortment at the right price. In addition, research showed that 55 percent of wine drinkers are unaware that convenience stores sell wine so the stores merchandised a single cold shelf of wine accompanied by a one-case program rack of their best-selling SKU, Apothic Red, within high traffic areas to generate awareness and trial. Additionally, this year, Wawa has expanded to include a 24-inch rack with red wine and 1.5-liter bottles. Alternative packaging helped drive overall growth, as well. The Liberty Creek Tetra (500ml) item sold 109 percent more cases than its next largest new item introduction for the chain in 2016. This item is selling out so fast from the cold box that the teams are looking at potentially adding extra stock of this product to the dry shelf. Lastly, Gallo incorporated moscato wines in all of Wawa's cold shelves because research shows 9 percent of millennials state they drink this wine most often. These innovative, category management methods are work- ing, as Wawa is seeing incredible growth in its wine category. Wine sales are up 49 percent in comparable stores, outpacing the overall Florida market, which was up only 5 percent in dol- lar growth for wine, according to IRI. Additionally, Wawa has been able to successfully target the millennial customer with this approach. Millennials now represent 20 percent of Wawa's Florida customers, larger than any other age group. CSN

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