More than Just Convenient

The convenience store industry gathered in Atlanta this October for its huge annual get-together known as NACS, and the event didn’t disappoint, especially in the beverage department. Dozens of beverage companies were on hand, often in larger-than-life, glitzy booths, exhibiting their new products and providing a peek into their strategies for the fast-approaching 2014.

In fact, there were so many new beverage products on display at NACS that it’s really impossible to include them all in one article. But many of them did fit into some overarching trends:


1. Just Add Protein
Protein continues to be a popular ingredient for beverages based on its health halo and its ability to satiate. But it’s also now being tapped by energy drink companies as evidenced by Monster, which used NACS to promote Muscle Monster, which adds 25 grams or protein to its popular formulation.

“There is really no other ready to drink protein product with an energy blend in it,” explained Geoff Bremmer, Monster’s vice president of marketing. “You drink a Muscle Monster and it gives you that motivation to make it to the gym. Then once you’re at the gym, the energy blend makes it so you can work harder, get a couple more reps in, run a little bit longer on the treadmill and really get a better workout in. And then of course protein’s always really great for post-recovery.” Muscle Monster comes in chocolate, vanilla and, newly introduced at NACS, the two flavors of Strawberry and Coffee.


2. A Taste of the Tropics
What’s almost as good as a vacation in a tropical paradise? How about having a drink that tastes like it? That, along with the great flavor and healthful profile, are some of what’s been fueling the popularity of tropical flavors like coconut, mango and pineapple. One brand taking advantage of all three is POM Wonderful. The brand was at NACS announcing its line expansion into what it calls “POM Blends.” The three different varieties mix the brand’s core pomegranate juice ingredient with each tropical ingredient to create the new 100 percent juice products. “So they have the great antioxidant benefits of pomegranate juice, plus this amazing taste, that is really light, refreshing and delicious,” said Marc Seguin, the brand’s vice president of marketing.

And, of course, the new Blends will be packaged in the brand’s iconic pomegranate-shaped bottles.

Also, Vita CoCo, was at NACS with its recently-launched Vita CoCo Kids line, a naturally fruit-flavored coconut water that comes in pouches, in flavors like Very Cherry Beach, Paradise Punch and Apple Island.


3. Conscious of Health
As POM’s line extensions attest (the brand stresses the antioxidant power of pomegranates in its new Blend line of drinks), healthy and natural has become a vitally important element to many convenience store beverage brands. It makes sense, as both moms and younger millennial consumers are becoming closer label readers, checking closely the ingredients of the food and beverages they consume.

The growing trend toward healthful and natural beverages was perhaps most evident at NACS in the announcement by kids’ beverage maker In Zone Brands that it will from now on be doing business under a new name, good2grow. The change replaces the company’s two previous brands, Belly Washer and Tummy Tickler, with the one good2grow brand and a completely new look favoring more natural packaging graphics that include bright pictures of fruit. Importantly, the new good2grow brand will keep the top characters on each bottle that kids have grown to love.

 “If you imagine a kids’ seesaw, it was tilted 100 percent to fun,” explained the brand’s chief marketing & commercial officer, Carl Sweat. “The label looked fun, the names were fun and the character toppers were all fun. So the challenge for us was to even the seesaw up so that we believe the label speaks to mom and the topper still draws the child while mom feels great about the nutrition of not only our current products, but a new fruit and vegetable blend that has less calories.”

Added Jim Scott, Founder and CEO at In Zone, “Belly Washers/Tummy Ticklers didn’t resonate with health and wellness consumers and that’s where we’re going. We see the real need in this beverage industry to change healthy habits of kids so we tried to redesign the brand to fit that. And now we’ve got one brand moving forward instead of two.”


4. Changing CSDs
The healthful beverage trend also was top of mind for several of the carbonated soft drink (CSD) companies at this year’s NACS. They were quick to speak of their continued quest for an elusive low-calorie sweetener that doesn’t impart any off-tastes to their sodas. “Health and wellness are obviously the key trends,” said Derek Dodge, SVP National Accounts with Dr Pepper Snapple Group (DPSG). “The industry’s changing, the consumer’s changing and we need to change with them.” In the meantime, Dodge said, DPSG is putting its focus on its mid-calorie “Ten” line of sodas. “We’re continuing to get really behind it because it is bringing new users back in the category, it’s growing the overall category and it’s where trends are going,” he said.

The Big Two, Coke and Pepsi, were also on-hand in a big way at the show, demonstrating very high-tech ways to boost sales for their brands in c-stores. Visitors to Pepsi’s booth, for instance, received text-based promotions to their smartphones through geofencing technology from Frisco,Texas - based Koupon Media. The technology is being used by 7-Eleven, Dollar General, Cumberland Farms, and other companies, to create social media relationships with consumers.

Coke was demonstrating its newest technology—the Digital Cold Vault—that enables it to create and review beverage sets that best appeal to c-store customers’ shoppers based on demographics. This “technological sensation,” as Coke called it, is a life-sized, interactive digital display. With a few taps and a sweep of the hand on a computer screen, the cold vault doors transform to reveal products, insights, videos and shopper marketing information designed to help maximize customers’ cold vaults to increase sales and shopper satisfaction.

The Digital Cold Vault also provides a stage to discuss the company’s latest strategies for growing Coca-Cola’s sparkling immediate consumption portfolio.


5. More Room for Coffee
Americans love coffee and there’s no end in sight to this love affair. That was evident by the use of coffee flavors by non-coffee beverages at NACS (such as with Muscle Monster), and also with a big move announced by the popular ready to drink tea company Ito En. Ito En introduced at the show its new Jay Street coffee brand, in attractive-looking bottles bearing scenes of urban Brooklyn, N.Y., where its headquarters in the U.S. is located. “This is really an effort for us to become more than just a tea company,” explained Adam Hertel, Ito En’s vice president grocery & natural sales. “We’re coming out with a vanilla latte and a mocha line of Arabica bean coffee in the same 16.9 ounce PET bottle, the square shape that we have the equity in. We’re branding this completely separately because we want to have something where we can play in some of that white space in the ready to drink coffee category which we think there’s an opportunity for.”
Hertel says Jay Street will also be using non-fat skim milk powder, instead of whole milk, in order to keep the calories down, along with cane sugar.


6. Hipper Water
The water category continues to be a powerhouse for the c-store channel, especially when the weather cooperates and delivers scorching hot summers. But water by its very nature, and the look of many of its bottles, is also one category that always runs the risk of becoming commoditized. The Sausalito, Calif.-based Fred Water wanted to avoid that trap when it launched four years ago. To do this, it uses a flask-shaped bottle that Adam Gayner, founder & CEO, said gives it both personality and easy portability. “We wanted to give personality to water, because water has no personality,” he said. “I was just over at the Monster booth and there are all these other drinks that have lots of personality. So given that water is like the best thing people could possibly be drinking, we have this mission to defend water as being cool, fun, interesting and engaging.”

Along those lines, Gayner said they chose the name Fred after noticing it was the least popular name for babies when the company was founded in order to give it an offbeat twist. “People who use our bottle drink more water,” he added. “Also, the back pocket says a lot. It’s not a luxury brand. It’s a cool brand.”


7. Shifting Alcohol Trends
The mainstream beer brands that have long dominated the c-store channel find themselves being hit from all directions these days, whether its millennials moving to craft beer, or even to other categories entirely such as wine and spirits. One big brewer, MillerCoors, is trying to bring millennials back to its products through the introduction early next year of its higher alcohol Miller Fortune, which it was promoting heavily with signage and displays at its NACS booth. “Our No.1 focus this coming year is Miller Fortune which is really targeted at millennials who have moved into spirits, especially flavored spirits,” said John Knapp, director, category solutions-convenience for MillerCoors. “How do we get them back into the beer category? So we think Miller Fortune, which is a high-alcohol beer, which is a growing trend among Millennials, with a very smooth taste, we really think the position of this product is going to help bring those millennials back into the beer category.”  Fortune has 6.9% alcohol by volume and comes in an edgy-looking all-black bottle. Knapp also said Fortune will have “the largest brand support” since the joint venture of Miller Coors. It will be available February 10, 2014.

Another brewer, Pabst Blue Ribbon, has positioned itself as a parent company of many local beer brands during a time when consumers are seeking out local products. “We have a full stable of local legend brands,” said Mark Beatty, Vice President of sales, National Accounts, Pabst Blue Ribbon, “that are just waiting to be revived and brought out and all on a local basis, nothing on a national scale.” PBR, for example, has made recent investments in the Texas market into its Lone Star & Lone Star Light brands and has rebirthed Lone Star Bock. In Chicago it has its Old Style brand, Stag in St. Louis, Primo in California, and Rainier in the Pacific Northwest and the company’s National Bohemia brand, he said, is growing by double digits in the mid-Atlantic. “So it just continues to tell us that if we stay local and stay true to that, we’re going to be able to rebirth and renovate more of our brands,” he said.

Beatty also credits PBR’s success with some untraditional marketing. “Our brand is a lifestyle brand, so our marketing’s very much driven by the consumer. If you look at our website, it’s 100 percent consumer driven content. They own our site. So it really is about us not telling them what the brand is—they define the brand in their terms.  So that adoption is really what continues to fuel the brand.”

One example, he said, is PBR doesn’t do traditional outdoor advertising. Its booth at NACS displayed replicas of outdoor Pabst Blue Ribbon-themed murals drawn by consumers. “What you will see is sides of buildings painted with murals,” he said. “Our consumers, that have adopted our brand, that’s what the brand means to them.

On the wine front, E& J Gallo Winery, had a large booth at the show displaying smaller and portable, c-store friendly 500 ml. box packages of its wines with resealable caps. “We look at wine as a huge opportunity in the c-store channel where it is growing at a double-digit rate, almost 3 to 1 when compared to the grocery channel,” said George Ubing, Gallo’s national director convenience channel. “We think a big driver is that wine is becoming more of an everyday occasion and the c-stores have that approach as an everyday stop. I think the millennials don’t want to spend the time in a grocery store so they’re going to in and out and they’re more apt to drinking wine as well as beer. So it’s a perfect in and out for them.”

When it comes to the demographics of the wine drinker, Ubing said, “the c-store channel is still male dominated, but I think as the convenience channel evolves into bigger, brighter, friendlier stores in many ways, I think the female customer is starting to gravitate towards that channel.”


 

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