A Six-Pack of Insights
Consumer data drives product placement, promos as suppliers, researchers battle insights desert
By Steve Holtz
CSP Daily News | February 2, 2012
OAK BROOK, Ill. — Whether you want to call it a blessing or just a lot of pressure, it’s generally agreed that beverages are the biggest draw for getting customers into a convenience store.
In fact, 58% of consumers reported buying a nonalcohol beverage on their most recent c-store visit, driving more traffic into the store than any other major category, according to consumer research specialists The NPD Group. And 64% of these purchases were packaged beverages.
But that’s just the tip of the consumer data iceberg. In this report, CSP aims to provide statistics, data points and consumer insights to apply to your store(s) based on typical traffic, demographics and other factors.
Each of the vendors interviewed for this story devote considerable time and effort to collecting consumer-insights data, some of which they were willing to share, and others that they opted to keep close to the vest pending proprietary agreements.
The convenience retail channel “is an insights desert compared to other channels in the amount of data that’s available to us,” admits Scott Finlow, vice president, shopper and channel insights for PepsiCo, Purchase, N.Y. “So our approach is more direct investment in understanding the channel and to make those investments directly in partnership with our customers so that we can get real-time learnings.”
Consider it the result of the c-store industry once being the underappreciated mutt of retailing: It’s lovable, and always there when you need it, but it’s the first dog to get kicked to the curb in the fight for the dog bowl or, in this case, budgeting the funds to collect consumer insights.
But that’s changing as retailers, consultancies, researchers and suppliers realize the value of the c-store industry.
Current C-Store Sales Trends:
For most of 2011, packaged-beverage sales in c-stores saw some trends continue and new ones emerge. Carbonated soft drinks, in general, continue to struggle, while iced tea continues to break out as a must-have subcategory. Meanwhile, sparkling bottled water is seeing double-digit growth. The good news: The most volume growth came in subcategories that offer the largest margin (notably energy drinks and wine). And where there were declines in volume–small drops for both beer and carbonated soft drinks (CSDs)–there were still increases in dollar sales, thanks to price increases.
Total cases of beer sold have slipped a bit, but dollar sales are up. Recession or not, a tip of the hat goes to those higher-margin craft beers and progressive adult beverages (think Four Loko), which may not deliver the volume but still pack a margin and market-basket punch. Of course, light beers and premium beers still rule the day, so don’t throw the baby out with the bath water.
Bottled-water sales trends have turned based on health reports, they’ve turned based on eco-friendly efforts, and they’ve turned based on the economy. Results from 2011 sales suggest a return to growth for the subcategory, with unit sales of PET still water up a healthy 5% even as dollar sales dipped a smidge. On top of that, sparkling-water sales grew double digits in c-stores, most likely on Nestle Waters’ rollout of its regional brands in sparkling formats.
In an age when health and anti-obesity initiatives are the rule of thumb, carbonated soft drinks remain challenged in c-stores and beyond. Still, through ambitious marketing and promotional campaigns by the major manufacturers, volume growth was down only a bit (0.36%), while price increases bumped dollar sales up slightly (0.75%).
A few years ago, energy drinks took the c-store industry by storm, offering an entirely new–and highly desirable–subcategory of beverages that attracted key c-store demographics and high margins. More recently, sales growth began to slow as those key consumers grew up, the recession took away discretionary spending and energy shots stole the thunder. In 2011, sales growth was easily in the double digits for both subcategories.