Everyone knows that energy drinks are a big seller in forecourt stores but is your store getting all the sales it can? Red Bull is keen to help retailers get the basics right and maximise sales and, to this end, has identified four key things needed to achieve a sale. These Category Foundations are: range, fixture, price and promotion. Rich Fisher, category development manager at Red Bull UK, says retailers need to ensure they have the right range, to generate the most sales. "Within energy, sizes are driving category growth, with core lines continuing to contribute significantly to share," he explains.
He therefore recommends retailers rationalise their range to focus on the key SKUs, providing them with the right amount of space on-shelf to drive growth and maximise sales. According to IRI data, currently both core lines and sizes are under-represented on shelf versus share of sales, yet flavours are over-represented. Core represents 34.7% of sales, while occupying just 13.8% of space on shelf; sizes account for 10.5% of sales, with only 8.3% of space on shelf; while flavours account for 40.3% of sales, yet currently receive 48.2% of space on shelf.
Says Fisher: "For the shopper, size creates loyalty Red Bull consumers know what they like and stick to it. For example, Red Bull Original 250ml has a broad target group of 18-35 year-old professionals; Red Bull Original 355ml has an older, more male consumer, aged 25-35; and Red Bull Original 473ml has a younger, less affluent and predominantly male shopper. By delivering a range, retailers can attract different shoppers into their store."
Size is important
In terms of the category, product size is the first or second most important decision for a consumer, behind which brand to choose. Both size and diet are driving the category, so by offering different sizes and charging a premium accordingly, retailers can ensure they are maintaining value in the category.
"Size is good for the retailer as it drives sales with sizes contributing 79.1% of category growth (IRI) and three of the top 10 functional SKUs being Red Bull Original 250ml, 355ml and 473ml," says Fisher. "Sales of big cans are incremental not only will they not steal share from the core 250ml SKU but they can, in fact, deliver additional rate of sale."
Apparently, shoppers only look at 40 items when in-store so Red Bull advises retailers to follow these simple merchandising principles to sustain category and sales growth:
Space: Red Bull advises retailers to stock the most efficient range to drive the greatest value. Category space should be aligned with share of sales to maximise sales.
Need states: the first shopper decision within sports and energy is the type of product required functional, refreshment or sport. Merchandise the fixture to meet consumer needs, from left to right Refresh, Stimulate, Hydrate. Use best-selling brands, such as Red Bull to signpost the category.
Focus on the top five brands: 50-60% of soft drinks’ space should be allocated to the top five brands. Ensure 60-70% of space for sports and energy brands, in line with their share of the category.
Strike zone: 94% of consumers shop by silhouette and colour, easily identifying well-known brands. Merchandising signpost brands at eye level improves shopability of the fixture by providing a clear starting point for the category.
Vertical blocking: Shoppers only see products within a 1.3m breadth. Vertical blocking helps shoppers to easily find the product they are looking for.
Stair step: stair-stepping size variants helps shoppers identify the correct size for their need.
Once the fundamentals have been established in store, Red Bull is keen for retailers to implement the following category growth initiatives to help to sustain category growth, by driving both demand and sales.
Sales drivers: positive consumption linking energy drinks to key energy occasions (driving, studying, working, exercising, gaming, socialising); education de-mystifying the product and driving everyday occasions; brand excitement driving awareness through cutting-edge marketing; product innovation innovating to overcome barriers.
Demand drivers: intensify spend targeting at-home consumption through new occasions; maximising on the go driving chilled can availability at the point of need; and everyday engagement maximising visibility in store.
Meanwhile, over at AG Barr, marketing director Adrian Troy says that as now one in three forecourt shoppers are choosing an energy drink, it is essential that retailers allocate enough space to the overall energy category, and also to the sub-segments that are driving sales.
He says tapping into three key opportunities will help forecourts unlock category growth:
More people: meeting the usage needs of new and existing energy shoppers.
More often: keeping energy shoppers engaged and coming back to the category with excitement.
More occasions: making sure energy drinks are available where shoppers want them, when they want them and how they want them.
Troy says shoppers choose energy drinks for three key reasons taste, functionality and lifestyle.
With regards to taste he says: "The flavours that shoppers can buy in energy are what keeps them excited. Flavours are fuelling growth with Rockstar’s range of 13 flavours leading the way. The brand’s innovative flavours with vibrant packaging appeal to core energy drinkers."
On functionality, Troy says: "Energy is being consumed more frequently, by more people for more reasons. It now plays a number of different roles in a shopper’s life a kick start in the morning, a pick-me-up during the day, before working out or getting ready for a night out, or simply a tasty drink while relaxing. The Rockstar brand meets all of these needs."
And on lifestyle, Troy says: "Understanding what interests energy shoppers and linking to their lifestyle is critical. Research shows that going to the cinema, listening to music, gaming, watching TV, working out and relaxing with friends are all central to energy drinkers’ lives. Rockstar connects with energy drinkers through links with positive and engaging platforms such as movies, motorsports, gaming and music, making Rockstar front of mind within the core target audience."
Amy Burgess, trade communications manager at Coca-Cola European Partners (CCEP), adds: "Energy brands undoubtedly have loyal consumer bases, and we have worked to align Monster Energy with fans of motorsport and video gaming, while building Relentless’ links with urban music and culture.
"Our investment in both brands will continue, with product development and a number of in-store promotions and striking marketing campaigns, all designed to strengthen links with their respective audiences."
Price and promotions
With half of sales within sports and energy bought on impulse (IRI data), Red Bull recommends encouraging trial and repeat purchase by introducing simple promotional mechanics that drive value as well as volume, for example, X for £Y.
"With an increasing number of SKUs entering the sports and energy category, many stores have placed an increased importance on standard and value tier brands, providing them with more space on shelf, resulting in a negative impact on the value of the category," says Fisher. "Within functional energy drinks, although standard and value brands have a higher frequency of purchase, premium brands, such as Red Bull, actually drive a higher spend per shopper.
"We therefore advise retailers to allocate the relevant space on shelf by consolidating their range and encouraging shoppers to trade into the premium brand tier, to generate the highest revenue."
Last year Red Bull reduced the rrp of its 355ml price-marked can from £1.59 to £1.49 which, according to IRI data, led to a 14% increase in rate of sale versus the same quarter in 2015. "With sales of the 355ml can now at their highest since the start of 2015 due to this launch, this new price is succeeding in its aim to maintain the premium position of the brand, while delivering an increased rate of sale and fuelling additional category growth," says Fisher.
"Shoppers are always looking for value for money," says Burgess, "and convenience stores are in the ideal position to use price-marked packs (PMPs) as a tool for growing sales. We offer a wide range of PMPs across our energy portfolio, with Monster Energy priced at £1.19, and Relentless at £1, helping to improve consumers perceptions of value."
Troy says shoppers are heavily influenced by price, and PMPs are one of the biggest influencers when deciding on a particular product to buy.
"PMPs reassure shoppers that they are not being over-charged and can be a driver of store choice. All of Rockstar’s popular big can flavours, are available in great-value 99p PMPs throughout the year, offering a clear profit opportunity for forecourt retailers."
As the number one sub-category in independents, symbols and forecourts, the sports and energy sector has continued to drive growth thanks to an increased spend from ’functional energy’ drinkers. According to IGD, this trend is set to continue with the category expected to grow 10%, to £1.37bn by 2019. IRI data has Red Bull currently growing 8.6% in value and 10% in volume, versus a sports and energy category that remains relatively flat (2.8% in value and 1.9% in volume).
As for trends, with the spotlight on sugar, more and more reduced or zero- calorie variants have entered the energy category.
Red Bull has three of the top 10 branded SKUs within Diet Energy. Red Bull Sugar Free Original 250ml is number one, followed by Red Bull Sugar Free 250ml four-packs at number four and Red Bull Zero at number five (IRI data).
CCEP has helped retailers meet the demand for zero-sugar drinks with its three calorie-free Monster Energy Ultra flavours: Ultra White, a light sparkling citrus flavour; Ultra Sunrise, which has a citrus and orange twist; and Ultra Red which combines the Monster Energy flavour with a refreshing, light and crisp taste.
These were joined this January by Monster Energy Ultra Citron, which combines a sparkling lemonade flavour with the light citrus sweetness of the Ultra range.
Burgess says: "It has been developed in line with research showing that citrus flavours are popular among Monster Energy’s target audience and, as well as its great taste and zero-sugar formula, it doesn’t compromise on the full energy hit that consumers demand from the sector. Its launch comes after sales of low-calorie energy drinks grew by 32% over the past year, making it the best- performing segment within the energy drinks sector (Nielsen data). Since its launch, the Monster Energy Ultra range can claim responsibility for 55% of this growth, with Monster Energy Ultra White the biggest generator of growth in the entire sector during 2016."
Burgess says CCEP is committed to "shaping choice", developing low- and zero-calorie variants to provide choice to consumers, and as such has invested £30m in research and development (2012-2017) to ensure its soft drinks portfolio offers a low- or zero-calories alternative.
"By stocking multiple variants of reduced-sugar options, retailers are able to extend their energy drinks offering to suit any customer preference, which can lead to increased sales."
Lucozade got in on the no-sugar action last summer with the launch of Lucozade Energy Zero in Orange and Pink Lemonade flavours, available in 380ml and 500ml bottles as well as a 380ml multipack and a one-litre format. At the time of the launch, senior brand manager Charlotte Flook said the introduction was part of brand owner Lucozade Ribena Suntory’s ambition to reduce calories across its portfolio by 20%.
Troy says 50% more low-sugar big cans were sold in 2016 and it’s estimated that low- or zero-sugar energy will be worth £200m in five years.
"In the next year one in four big-can energy drinks will be a zero-sugar version but energy shoppers don’t want low-sugar energy to feel different to full-sugar energy. That’s why Rockstar has recently launched Revolt, a revolutionary range of zero-sugar energy drinks that doesn’t compromise on look, taste or energy boost," he explains.
Rockstar Revolt comprises two 500ml can variants: Killer Citrus and Killer Cooler. Impactful camouflage pack designs provide great on-shelf standout for the drinks.
"Rockstar Revolt will appeal to the growing number of consumers who want zero-sugar energy, but don’t want it to look, feel, perform or taste different to full-sugar energy," says Troy.
He believes the new Revolt products reinforce Rockstar’s reputation as the leader in energy drink innovation and build on the brand’s proven ability to deliver incremental category sales. Rockstar Revolt will be supported by heavyweight sampling and a national social media campaign.
"Shoppers are constantly seeking new energy flavours and the new Rockstar Revolt packs will add excitement to the fixture," adds Troy. "We recommend that forecourt retailers display the range prominently and prepare for this revolutionary sales opportunity."
Burgess agrees that consumers are demanding a wide choice of flavours, and CCEP’s response to this was a new Passion Punch variant for Relentless last year. A new pack design was also introduced across the range. The new-look Relentless packs have been designed to be instantly recognisable, with refreshed branding across all variants to create one standout block on a shelf.
Finally, Boost Drinks is looking to increase its share of the energy drinks market with striking new packaging that will be introduced across all 40-plus SKUs over the next few months.
The brand’s logo has been updated with a more contemporary feel, featuring a new font that reflects energy and movement. Changes to price-marking have involved the removal of ’special offer’ from the core range, highlighting that the value of Boost is not just a short-term gimmick.
Boost sees the investment in its new look as a key part of its Champion Of The Independents commitment, providing great tasting, competitively-priced products that are not available in the grocery multiples and with profit margins of up to 50%. Managing director Simon Gray says: "In 2017, we are keen to build on the momentum and success achieved to date and to take the brand to the next level. Our Champion Of The Independents’ commitment will remain at the core of the business while we invest in promoting the new Boost look and in extending our distribution geographically alongside a greatly upweighted consumer marketing programme."
Around half of UK adults drink sports and energy drinks, rising to 80% of young men, says Mintel in its latest Sports and Energy Drinks (UK) report.
When it surveyed adult internet users, it found that 49% of them had drunk sports or energy drinks in the previous year.
The report stated: "That usage of sports and energy drinks is biased towards young men is well established. However, young women also show above-average usage, indicating that age is the most pertinent driver." Sports and energy drinks’ usage among men aged 16-34 is higher than average but Mintel says less widely commented upon is the fact that usage among women of the same age is also higher than average, though it still lags behind young men’s.
The predicted five per cent decline in men aged 16-24 between now and 2021 poses a threat to sales, but Mintel believes this will be partially offset by an increase in the number of 25-34-year-old men. A similar trend is predicted for young women, with those aged 16-24 set to see a 4.2% decline and 25-34s a 2% rise.
January saw the launch of Protein Boost, which comes in 310ml bottles, in strawberry and chocolate flavours. Each bottle contains 20g of protein, no fat, no added sugar and less than 150 calories on-pack messaging communicates this to consumers. Bottles are price-marked at £1.29 and come in cases of eight.
Nielsen research shows that sales of energy drinks for future consumption are on the increase as people stock up for the week ahead. Coca-Cola European Partners recommends offering packs such as four x 500ml Monster Energy and Monster Energy Ultra White to further boost energy drinks sales.
Carabao has added Green Apple to its range. The new flavour joins Original and Sugar Free, in 325ml cans, rrp £1.19.
Rockstar is currently the largest big-can flavoured energy drink in UK convenience, delivering over 50% of flavoured sales. Two of the top five fastest-selling flavoured big cans are Rockstar flavours Xdurance (number one) and Punched Guava (number two).
Mars Chocolate Drinks and Treats added a high-protein version of Mars Milk to its range last year. Mars High Protein contains 22g of protein. Rrp is £2.
Andrew Burgess, Helme Park Service Station, Tow Law, County Durham:
"Energy drinks make up a large part of our soft drinks sales, with 250ml cans the best seller across all brands. We’ve been stocking Boost drinks for over five years, owing to the great sales and impressive profit margins associated with the brand. A recent expansion of the store has allowed us to increase our Boost range adding 500ml and one-litre SKUs.
"We merchandise all of the Boost stock together to increase brand visibility and we promote impulse buys, a tactic we use with a lot of brands.
"We’ve two key demographics buying energy drinks: the workmen who buy the large volume, full sugar SKUs as a pick-me-up after a shift or a boost before work; and women who prefer the sugar-free 250ml cans."
Made to Move
Lucozade Sport has been busy trying to get people moving as part of its Made to Move campaign. Its most ingenious move to date was the world’s first get-fit bus shelter which was installed in Manchester. It had live streaming capabilities, so a fitness trainer could take people waiting for the bus through an interactive workout. Rather than sitting down or standing still, ’waiters’ were taken through exercise routines ranging from Zumba to Boxercise. Participants were rewarded with a new-look Lucozade Sport Body Fuel or Low Cal drink dispensed through the bus shelter.
Steven Hind, head of marketing at Lucozade Sport, said at the time: "It was great to see the ’wait training’ in action. Transforming a bus stop shelter into a live interactive exercise area was a great way to show our ongoing commitment to achieving our target of getting one million people moving more by 2020."
The Made to Move activity involved a £5m investment with almost 16 million 16-34 year olds being exposed to the campaign.
Other Lucozade Sport Made to Move activities included a TV advertising campaign, a run with 300 members of the public across Hampstead Heath in London with the current IBF Heavyweight World Champion boxer, Anthony Joshua, as well as Made to Move sessions hosted by sports and fitness ambassadors.
Energy/sports drinks and football make the perfect partners which is why Lucozade Sport has a partnership with the FA, and Chelsea has a global partnership deal with South-East Asian energy drink Carabao. In addition, Carabao will be the EFL Cup’s title sponsor from this coming June, when the EFL Cup will be renamed the Carabao Cup.
Nutritional milk drink NRICH currently has a sponsorship deal with Queens Park Rangers as its ’Performance Partner for QPR’ this season.
The deal includes a range of high-impact marketing initiatives including LED pitch-side banner advertising, player and fan engagement and a raft of joint on- and off-line marketing activities.
Jag Singh, marketing manager for NRICH, says: "NRICH is targeted at consumers who live an active lifestyle. This includes everyone from professional footballers and sports enthusiasts to electricians, builders and office workers who are looking for a delicious and nutritious boost to keep them going."
Gavin Moreland, Gwalia Garage, Caeathro, near Caernarfon:
"Soft drinks is the third largest sales category for us and we stock all the major sports and energy drink brands including Red Bull, Monster, Relentless and Boost. We’ve been stocking Boost drinks for over 18 months and have noticed a sharp increase in sales over this period. We carry a range of Boost’s price-marked packs including the original, tropical and sugar-free 250ml cans, and the one-litre original bottle. Our best seller is the original PMP 250ml can. We can easily get through six cases of the original cans in a week and often find that we need to re-stock during the morning rush. We find that we sell most of our Boost during the morning to workmen and people who need a pick-me-up at the start of the day. On Sunday mornings, it sells particularly well to those who’ve been out the night before.
"I think our customers like Boost because it represents real value for money, which is reinforced by the price-marked packs so they know they’re getting it at a fair price. As a result, some of our customers buy three or four cans at a time as four cans of Boost can often equal the same price as one of the leading competitor drinks."