Demographic Keys to the Cold Vault
There is a strong case to be made for targeting millennials and Hispanics when it comes to the c-store’s cold vault.
According to Technomic, 44% of millennials visit convenience stores once a week or more, and Hispanics visit a c-store just as frequently. Specific to adult beverages, more than 15% of both groups report purchasing alcohol every or nearly every time they visit a convenience store, which outpaces the general population.
Millennials should be noted for their adventurous but thrifty alcohol purchases. They are more likely than the average consumer to try new adult beverages away and at home, and with 89% of them reporting that they consumed an alcoholic beverage at home in the past week, capturing their business is a substantial sales opportunity. When drinking at home, millennials are most likely to drink beer (70%) with wine a close second (62%). However, nearly a quarter of millennials have bought an adult beverage that they have never tried before for at-home consumption. They are mostly experimenting with new spirits, but 30% are trying new beers.
Despite their propensity for trying new things, millennials are loyal customers, with 92% reporting that if they enjoy a new drink they are extremely or somewhat likely to buy it again for at-home consumption.
Hispanics have long been c-store traffic stalwarts, and their importance to adult-beverage sales remains high. With 33 million Hispanics of legal drinking age (LDA) in the United States, Hispanics represent 14% of the total LDA population. The Hispanic population skews young and male, so it isn’t surprising that more than half of Hispanics in a recent Technomic survey said beer was the adult beverage they most recently consumed at home. Compared to the general population, they are significantly more likely to drink imported beer, especially beer from Latin America.
When deciding what alcohol to purchase, millennials often look to their peers. Influential factors for 20-somethings include the suggestion of a friend or family member and the people that they are with at the point of purchase.
Hispanics are more likely than the general population to buy a brand for at-home consumption that they also order at a restaurant or bar. However, they are not above the influence of friends, family members or people they are with when making purchasing decisions. Forty percent said the people they were with influenced their decision; 30% made a purchasing decision based on a suggestion from family or a friend.
In-store promotion and samples also provides an opportunity to win over the Latin market, because that influenced nearly a quarter of consumers. This tactic also might work for millennials, who are likely to listen to the people around them at the point of sale. A sample wouldn’t necessarily have to win over the buyer; if a friend enjoyed the product, he or she could influence the millennial making the purchase.
It is important that c-stores promote popular brands, especially those popular in foodservice locations, because that plays a large role in decision making for Hispanics. While targeting millennials, c-stores should promote on-trend items. This could inspire a sale, considering they might have tried the popular brand on a whim and are likely to be repeat customers of new beverages. Also, on-trend items might have captured their attention via word-of-mouth marketing, because the suggestions of friends and family play a major role.
The cost of the alcohol plays a large role in decision making for both demographics, so in-store specials and other promotions will likely drive business. It is also important for operators to consider price points when rationalizing SKUs.
Understand Both Groups
A commonality among millennials and Hispanics is price sensitivity. Cost is a deciding factor for both when selecting beverages at c-stores, yet the advantage is that both groups see at-home drinking (or purchasing at a c-store) as a greater value than purchasing away-from-home. Rationalization of SKUs for these diverse drinkers will be a challenge, but putting resources toward understanding and meeting their needs could pay healthy, long-term dividends for cold-vault sales.