With summer quickly approaching, what better way to cool off than with your favorite bottled beverage and the latest category news? We're sharing the piping hot tea on all things packaged beverage.
In this week’s episode of How Convenient, Koupon's Manager of Data and Analytics Allison Berti joins Greg Crow to highlight trends that brands are capitalizing on to win consumers in the packaged beverage category, as well as how unique positioning is vital for high performance within subcategories.
Listen and subscribe to the full episodes at one of the following links. Below is the episode’s transcript which has been edited for readability. If you have any comments, questions or would like to learn more, contact us below.
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Transcript:
[Music]
Greg Crow: In this episode, we highlight trends that brands are capitalizing on to win consumers in the packaged beverages category. Welcome to How Convenient, a new podcast about the essential role convenience stores play in the busy lives of consumers. Our hope is to equip innovative C-store leaders as they seek to earn lasting shopper loyalty. In each weekly episode, we'll briefly share an update on C-store sales trends and what we're learning from billions of in-store purchase transactions. Today's episode was reported on April the 30th, 2021, I can't believe it's nearly May. I'm Greg Crow with Koupon, today I'm joined by Allison Berti. Allison, for those who haven't met, you introduce yourself and tell us what you've been thinking about recently.
Allison Berti: Hello everyone, my name is Allison and I manage the data team over at Koupon. And what I've been thinking about recently, well, today, as we speak, Greg, it's very gloomy and rainy over by me, and so I've been thinking a lot about the upcoming summer months, and I'm just ready for some sunshine and warm weather, and I'm thrilled to be back on How Convenient, so thank you for having me.
Greg Crow: Yeah, fantastic. Well, we've had inches of rain here in Texas, so we're thankful for that, but yeah, it would be nice to see the sun again. Allison did host a great episode, number 12 with Brad Van Otterloo on activating consumers in your loyalty program, and I'm excited that for the 19th episode, we're finally on the podcast together. As always, we would love your feedback, we'll let you know how you can share that with us in a few minutes.
For the week ending April the 25th, in store sales are up 12% versus a year ago, alcohol up 15%, candy 3%, beverages 3%, tobacco 2%, food 2%, and snacks flat. Total trips are up 13%, basket dollars are up 7%, and it's great to see that performance on a year ago basis but given a year ago, things were quite different.
We want to start to look at what's happening on a week, over week basis and on that measurement, we are, let's see, plus one versus last week on sales and plus one on the basis of trips. So, there has been a lot going on in tobacco recently. We did spend the last two episodes on that and check those out if you haven't listened to them, but today we're going to return to our review of other categories and we're going to start with packaged beverages.
We've talked about packaged beverages before it was actually our first episode and then energy drinks in episode 14, and so today we're going to dig into two sub-categories that will provide some context for what we've been seeing across packed bev. And we're going to talk about bottle juice and bottle tea, or ready to drink tea. We've discussed in the past in this category, it's an interesting one because consumers, in many cases are navigating multiple categories. They're taking advantage of opportunities to try new brands in flavors and look for new alternatives and so loyalty in this space is certainly challenging. So, Allison you've been looking at the categories, how are they performing?
Allison Berti: It's an interesting compare and contrast. These sub categories have a few things in common. There’s seasonality to both with an increase in summer months, as consumers are out seeking hydration options and relief from the heat, and there's also a lot of options for consumers. We tracked more than 60 brands across the two segments and few brands which straddle both juice and tea. Tea has been a strong category in the past, but juice is on a growth streak. The biggest difference I would highlight as a starting point is the juice sub category had a strong 2020 while ready to drink tea struggled. Juice was up 2% in sales first, 2019, and at a similar level to bottle soda while tea was down 7%. Diving deeper, juice had a rough start to the year, but grew every quarter post COVID, whereas tea declined in each quarter. We're seeing that trend continue in 2021.
Greg Crow: Yeah, it's interesting, we would say 2% sales growth is a really strong year, but 2020 obviously was different for this category. So yeah, it is interesting to see, we think of these categories as being paired up in many ways in terms of sorts of consumers that are seeking hydration options, so it's interesting that there's such a large gap in performance. We did dig into this a little bit more deeply and wanted to understand why is tea not doing as well as bottled juice, but we want to do it from a consumer level. So, the average bottle juice drinkers spend about 40% of their sub-category dollars with a single brand. What that means is they're spending 60% on competing brands and a metric is even lower for tea brands. And so, at the end of the day, many consumers are reaching for a tea to fight and energy and attention deficit, there are a lot of other options in packed bev that also fit that bill.
So, we found that a lot of consumers in the sample shifted more of their spend in 2020 CSD and energy drinks, both of which experienced above average growth on the basis of comparing to the category as a whole. Sports strengths consumption held steady in this group and water slightly declined. And of course, CSD benefited last year from a shift away from fountain, and energy didn't need any push from COVID to grow share, but it got it anyway and had a fantastic year. Allison, we talked about some of the shifts out of the category for tea drinkers. What else did we learn?
Allison Berti: Beyond the shift you mentioned in tea, there are several things that work here. We spoke in episode 13 about Kinder, which has carved out a niche in chocolate and toys for kids with their joy egg. In the juice category, Good2Grow has a similar position with a focus on drinks for kids, but they have taken it a step further with a variety of licensing deals for dozens of characters. The packaging is kids sized and they have spouts design not to spill. Parents are increasingly buying for their kids as juice can be a fun option that is still more healthy than soda. As we've talked about in the past, several brands are winning consumers with better for you positioning across generational lines. In juice, ALO grew sales 20% last year. It's a plant-based non-GMO gluten-free and low-calorie option with a focus on functional positioning.
There are many consumers who know aloe for its benefits for the skin and are opting to try the product. A lot of consumers are open to alternatives that thy believe are healthier and manufacturers are continually bringing new functional options to market. We believe that increasingly, consumers operate on a continuum between better for you and indulgent throughout the day and throughout the week, and brands are eager to reach younger generations who build relationships with brands in ways their parents rarely did. Both of these brands engage consumers with unique positioning. We recently announced a partnership with Label Insights and in a few weeks, we'll be sharing another episode more about how that will bring incremental value to our clients.
Greg Crow: I think it's interesting, you're calling out, I think some trends that we have been seeing, and these are certainly brands that are still growing in terms of their share of the category. But it is very interesting, the point that you made, they're both focusing on a very specific positioning statement with consumers, and that does appear to be resonating. Allison, I understand you have a quiz for me today.
Allison Berti: Yes, I do. Okay, Greg, here we go. I'm going to give you a brand and two flavors within that brand and then you tell me if you can guess which flavor grew in sales per store versus a year ago in 2020. You ready?
Greg Crow: I'm ready. Let's go.
Allison Berti: Okay. So, our first brand's going to be the Peace Tea, 23oz. The flavors are green tea or razzle berry. Which grew?
Greg Crow: Green tea. I'm definitely a fan of green tea, but I think you've got to give it to razzle berry just because it's got a fun name. I'm going to say razzle berry.
Allison Berti: Ding, ding, ding. You are absolutely right. Green tea was down 28%, razzle berry was up 16%. All right, let's see if you can be two for two.
Greg Crow: No, let's stop now because I'm at a hundred percent.
Allison Berti: [Inaudible 08:36] A hundred percent accurate.
Greg Crow: All right.
Allison Berti: The next brand is the Next 12oz product, and we have a mango flavor and a strawberry banana flavor.
Greg Crow: I'm going to say mango. Mango's very popular right now.
Allison Berti: Sorry, Greg, we should have stopped at question one. Mango is actually down 18% and strawberry banana up 21%. But let's see if you can redeem yourself on this last question and come out a winner. The next brand we have is Good2Grow, the 10oz product and our flavors are orange mango or raspberry lemonade.
Greg Crow: I'm torn. I know raspberry lemonade is something we see across a lot of brands right now, but I'm going to say orange mango.
Allison Berti: And you would be correct. Good job Greg. Orange mango is up 8% raspberry lemonade is down 24%. So, two out of three, I think he came out a winner Greg. Great job.
a. With summer quickly approaching, we’re cooling off with our favorite bottled beverages and the latest category news! I don't know, I think that's still a failing grade when I went to school, but that was fun. Thanks for doing that. I appreciate you giving me the opportunity to embarrass myself Allison. We will continue to watch these interesting trends in packed bev and we'll report back on what we're learning in future episodes. In our next episode, we will continue discussing 21 insights with a focus on alcohol consumer demographics trends and Allison is going to be hosting that, so you'll have an upgrade for that episode. Thank you for listening to How Convenient, if there's a topic, you'd like us to cover, or you think that we got it wrong, we want to hear from you. You can reach us at koupon.com. Don't forget to subscribe and rate us and you can find more insights at blog.koupon.com.
Thank you for listening to How Convenient. If there is a topic that you would like to see us cover, or you think that we got some of our facts wrong, we would love to hear from you. You can reach us at koupon.com. Don't forget to subscribe and review us, and you can find more insights at blog.koupon.com.
Allison Berti: Hello everyone, my name is Allison and I manage the data team over at Koupon. And what I've been thinking about recently, well, today, as we speak, Greg, it's very gloomy and rainy over by me, and so I've been thinking a lot about the upcoming summer months, and I'm just ready for some sunshine and warm weather, and I'm thrilled to be back on How Convenient, so thank you for having me.
Greg Crow: Yeah, fantastic. Well, we've had inches of rain here in Texas, so we're thankful for that, but yeah, it would be nice to see the sun again. Allison did host a great episode, number 12 with Brad Van Otterloo on activating consumers in your loyalty program, and I'm excited that for the 19th episode, we're finally on the podcast together. As always, we would love your feedback, we'll let you know how you can share that with us in a few minutes.
For the week ending April the 25th, in store sales are up 12% versus a year ago, alcohol up 15%, candy 3%, beverages 3%, tobacco 2%, food 2%, and snacks flat. Total trips are up 13%, basket dollars are up 7%, and it's great to see that performance on a year ago basis but given a year ago, things were quite different.
We want to start to look at what's happening on a week, over week basis and on that measurement, we are, let's see, plus one versus last week on sales and plus one on the basis of trips. So, there has been a lot going on in tobacco recently. We did spend the last two episodes on that and check those out if you haven't listened to them, but today we're going to return to our review of other categories and we're going to start with packaged beverages.
We've talked about packaged beverages before it was actually our first episode and then energy drinks in episode 14, and so today we're going to dig into two sub-categories that will provide some context for what we've been seeing across packed bev. And we're going to talk about bottle juice and bottle tea, or ready to drink tea. We've discussed in the past in this category, it's an interesting one because consumers, in many cases are navigating multiple categories. They're taking advantage of opportunities to try new brands in flavors and look for new alternatives and so loyalty in this space is certainly challenging. So, Allison you've been looking at the categories, how are they performing?
Allison Berti: It's an interesting compare and contrast. These sub categories have a few things in common. There’s seasonality to both with an increase in summer months, as consumers are out seeking hydration options and relief from the heat, and there's also a lot of options for consumers. We tracked more than 60 brands across the two segments and few brands which straddle both juice and tea. Tea has been a strong category in the past, but juice is on a growth streak. The biggest difference I would highlight as a starting point is the juice sub category had a strong 2020 while ready to drink tea struggled. Juice was up 2% in sales first, 2019, and at a similar level to bottle soda while tea was down 7%. Diving deeper, juice had a rough start to the year, but grew every quarter post COVID, whereas tea declined in each quarter. We're seeing that trend continue in 2021.
Greg Crow: Yeah, it's interesting, we would say 2% sales growth is a really strong year, but 2020 obviously was different for this category. So yeah, it is interesting to see, we think of these categories as being paired up in many ways in terms of sorts of consumers that are seeking hydration options, so it's interesting that there's such a large gap in performance. We did dig into this a little bit more deeply and wanted to understand why is tea not doing as well as bottled juice, but we want to do it from a consumer level. So, the average bottle juice drinkers spend about 40% of their sub-category dollars with a single brand. What that means is they're spending 60% on competing brands and a metric is even lower for tea brands. And so, at the end of the day, many consumers are reaching for a tea to fight and energy and attention deficit, there are a lot of other options in packed bev that also fit that bill.
So, we found that a lot of consumers in the sample shifted more of their spend in 2020 CSD and energy drinks, both of which experienced above average growth on the basis of comparing to the category as a whole. Sports strengths consumption held steady in this group and water slightly declined. And of course, CSD benefited last year from a shift away from fountain, and energy didn't need any push from COVID to grow share, but it got it anyway and had a fantastic year. Allison, we talked about some of the shifts out of the category for tea drinkers. What else did we learn?
Allison Berti: Beyond the shift you mentioned in tea, there are several things that work here. We spoke in episode 13 about Kinder, which has carved out a niche in chocolate and toys for kids with their joy egg. In the juice category, Good2Grow has a similar position with a focus on drinks for kids, but they have taken it a step further with a variety of licensing deals for dozens of characters. The packaging is kids sized and they have spouts design not to spill. Parents are increasingly buying for their kids as juice can be a fun option that is still more healthy than soda. As we've talked about in the past, several brands are winning consumers with better for you positioning across generational lines. In juice, ALO grew sales 20% last year. It's a plant-based non-GMO gluten-free and low-calorie option with a focus on functional positioning.
There are many consumers who know aloe for its benefits for the skin and are opting to try the product. A lot of consumers are open to alternatives that thy believe are healthier and manufacturers are continually bringing new functional options to market. We believe that increasingly, consumers operate on a continuum between better for you and indulgent throughout the day and throughout the week, and brands are eager to reach younger generations who build relationships with brands in ways their parents rarely did. Both of these brands engage consumers with unique positioning. We recently announced a partnership with Label Insights and in a few weeks, we'll be sharing another episode more about how that will bring incremental value to our clients.
Greg Crow: I think it's interesting, you're calling out, I think some trends that we have been seeing, and these are certainly brands that are still growing in terms of their share of the category. But it is very interesting, the point that you made, they're both focusing on a very specific positioning statement with consumers, and that does appear to be resonating. Allison, I understand you have a quiz for me today.
Allison Berti: Yes, I do. Okay, Greg, here we go. I'm going to give you a brand and two flavors within that brand and then you tell me if you can guess which flavor grew in sales per store versus a year ago in 2020. You ready?
Greg Crow: I'm ready. Let's go.
Allison Berti: Okay. So, our first brand's going to be the Peace Tea, 23oz. The flavors are green tea or razzle berry. Which grew?
Greg Crow: Green tea. I'm definitely a fan of green tea, but I think you've got to give it to razzle berry just because it's got a fun name. I'm going to say razzle berry.
Allison Berti: Ding, ding, ding. You are absolutely right. Green tea was down 28%, razzle berry was up 16%. All right, let's see if you can be two for two.
Greg Crow: No, let's stop now because I'm at a hundred percent.
Allison Berti: [Inaudible 08:36] A hundred percent accurate.
Greg Crow: All right.
Allison Berti: The next brand is the Next 12oz product, and we have a mango flavor and a strawberry banana flavor.
Greg Crow: I'm going to say mango. Mango's very popular right now.
Allison Berti: Sorry, Greg, we should have stopped at question one. Mango is actually down 18% and strawberry banana up 21%. But let's see if you can redeem yourself on this last question and come out a winner. The next brand we have is Good2Grow, the 10oz product and our flavors are orange mango or raspberry lemonade.
Greg Crow: I'm torn. I know raspberry lemonade is something we see across a lot of brands right now, but I'm going to say orange mango.
Allison Berti: And you would be correct. Good job Greg. Orange mango is up 8% raspberry lemonade is down 24%. So, two out of three, I think he came out a winner Greg. Great job.
a. With summer quickly approaching, we’re cooling off with our favorite bottled beverages and the latest category news! I don't know, I think that's still a failing grade when I went to school, but that was fun. Thanks for doing that. I appreciate you giving me the opportunity to embarrass myself Allison. We will continue to watch these interesting trends in packed bev and we'll report back on what we're learning in future episodes. In our next episode, we will continue discussing 21 insights with a focus on alcohol consumer demographics trends and Allison is going to be hosting that, so you'll have an upgrade for that episode. Thank you for listening to How Convenient, if there's a topic, you'd like us to cover, or you think that we got it wrong, we want to hear from you. You can reach us at koupon.com. Don't forget to subscribe and rate us and you can find more insights at blog.koupon.com.
Thank you for listening to How Convenient. If there is a topic that you would like to see us cover, or you think that we got some of our facts wrong, we would love to hear from you. You can reach us at koupon.com. Don't forget to subscribe and review us, and you can find more insights at blog.koupon.com.
[Music]
