When stocking the cold vault, it’s no secret that retailers need to start with a basic planogram featuring big sellers. Operators must then make sense of the wide array of variables that can sway cold vault success or failure. Add to that the current influx of innovation in the category, and decisions can be difficult.
Mike Nelson, senior category manager with Beaverton-Ore.-based Plaid Pantry, operating 110 stores in Oregon and Washington, relies on his own knowledge and a list to guide him, as well as insights from supplier partners.
“We assign a category captain each year, so they kind of guide us as independently as they can,” he said.
But once the solid, proven performers are slotted, the real work of choosing what additional beverage products to include, and how much of them to stock, begins — and it’s usually a gamble. Savvy beverage category managers use a number of methods to help them make tough decisions. Here are three tips of the trade when balancing the cooler set.
1. Indulge Risks, But Know When to Say When
“Don’t be afraid to maybe steal a little space here and there for taking a chance,” Nelson said, adding that the Pacific Northwest may be a bit more innovation friendly than other regions of the U.S.
“We’re lucky out here,” he said. “We kind of like more oddball stuff.”
“Don’t ignore the little guys,” Nelson cautioned. Smaller brands are often the drink makers whose products set future trends. The large manufacturers keep a close eye on what these small houses are doing, too, and factor that into their plans.
If a larger distributor requires so much space it crowds smaller brands out of your cooler set, though, Lafayette, La.-based Hit-n-Run Food Stores’ President Brent Mouton said to hold firm. He tells them, “We’re going to move more product at the end of the day, if we do this right, which means we’re going to move more of your product, as well.”
But how does a retailer know if a gamble on a new product is going to eventually pay off in sales?
For Mouton, who operates 11 stores throughout Louisiana, most products reveal pretty quickly whether they’re going to take off. Hit-n-Run will leave a new product in the cooler for about two months, and if it doesn’t pick up some steam, then it’s swapped with another trial product. Resist the temptation to give it just a little more time, Mouton advised.
“We only have so many doors,” he said. “We only have so many shelves. We only have so many slots. That’s all we have, and we can’t afford to have (beverage products) that aren’t moving.”
2. Listen to Customers, Talk to Retailers
Minimize risk by doing your homework to stay updated on what’s happening in the industry, Nelson advised.
Nelson is a big fan of product expos as a source of information. “I think those are just absolutely fantastic,” he said.
While many trade shows aren’t convenience driven, Plaid Pantry has “found some decent nuggets,” Nelson said. “Even if you don’t specifically find the brand you’re looking for, you learn so much of what’s out there and what a lot of people are buying.”
But with many events on hold due to the pandemic, retailers need to be proactive in finding other ways to gain information, as well, including talking with other retailers and customers.
Listening to regular customers’ preferences is key, and a savvy retailer knows not to take consumer intel for granted. “Keep them happy,” Mouton said.
“If that one loyal customer,” he said, “if they’re going to be in my store every day, and they want a certain type of energy drink, one that maybe we didn’t get a lot of traction on when we first had it in … we’ll bring that back, gladly.”
Why? Because the customer who stops for that daily, go-to beverage is also filling her basket with snacks, sandwiches, candy and probably putting fuel in the tank, too.
3. Trends Can Become Staples
With so much innovation in the beverage category these days, trends come and go — sometimes quickly. But trends can also settle comfortably into the routines of consumers — and into a slot in the cold vault.
Take cold-brew coffee, for instance. It has earned its place by attracting steady followers, Nelson said.
“Coffee is still good. Coffee is still very powerful,” he said. While he observed that a lot of consumers are looking for different energy sources, cold-brew coffee seems to have withstood the onslaught of energy drinks and their associated trends, pushing back to maintain its own share of the market.
The previous year’s sales data supports that expectation. According to sales data from Beverage Marketing Corp., dollar sales of ready-to-drink (RTD) coffee in the convenience channel roughly tripled from 2015 to 2017, going from $76.9 million to $249 million, and sales continued to grow with marks of $369 million and $538 million for 2018 and 2019, respectively.
It’s no secret that numbers like that across the cold vault are sure to keep innovation booming.
