Beverages: Retailer Perspective 2014
Q&A with Kris Kingsbury, marketing and merchandise manager, Robinson Oil
Q. Millennial shoppers form an important customer base in the markets you serve. How do these customers shape beverage trends?
A. I think local is important to them. I think fewer preservatives and fewer ingredients on the packaging are always helpful, but the product still has to taste good. They’re also very price-conscious.
Q. Where are your sales strongest in packaged beverages?
A. In energy, our two-for pricing is strongest. We have established buying two as a value for many years. Our customers are aware and take advantage of the offering. In beer, our everyday-low-price three-packs and our premium 18-packs remain very strong. Seasonal flavors continue to grow. We carry 30-packs in our caves and continue to expand import, craft and local beer.
Q. Tell us more about the trends you’re seeing in beer and alcohol.
A. We have beer caves in four stores currently and plan to incorporate more caves in newer or remodeled stores where we are able. Our stores in the North (Santa Rosa and Healdsburg) tend to sell more craft and super-premium beer than in the San Jose market. We’re actually trying to change that because the gross-profit dollars are nice and healthy in craft. The San Jose market is heavier into premium and imported beers. We also have added wine. Sutter Home and higher-end wines complete our sets.
Q. When it comes to craft and local beers, how do you balance variety against space limitations?
A. Craft is a very personal purchase. People have their special brew. When the seasonal comes out, you want to make sure you have that in for the period of time it’s available, if you have enough space. We like to support local companies if we can. Being in Northern California, there are a lot of different breweries around. Sierra Nevada is our No. 1. It’s a very well-known, well-established craft beer.
If you have a cave, you’re probably in good shape [to offer variety]. But we had a situation at one of our stores where we didn’t have any area in the cooler to stock anything. In that particular store, we just zeroed in on the top-selling items. You hate to do that because you like to have a great variety, but that doesn’t always work. We also do plug-and-pull (with new items) so that they’re not completely without brand-new products.
Q. How do you promote beer?
A. We are currently selling Mike’s Hard Lemonade 16-ounce cans as a two-for/ mix-and-match price every day. Traditional marketing includes temporary price reductions, banners, themed displays and cooler-door decals. Electronically, we have LIFT looping promotions at the cash wrap and our Rotten Robbie deals app through GasBuddy OpenStore Inc.
Q. What are some of the more challenging areas in beverages?
A. As always, there is not enough cooler space to house the variety of great brands available. We’re looking at expanding energy and water’s allotted space, which means taking space from some other cooler category. There’s also the possibility of more taxation and age restrictions for energy drinks.
Kris Kingsbury is marketing and merchandise manager, Robinson Oil, Santa Clara, Calif., 34 stores.