Among the more detailed category management campaigns of the past year is the so-called “balanced portfolio approach” devised by legendary brewing company Anheuser- Busch, which sought to boost overall stagnant beer sales beyond a robust craft segment. The St. Louis-based unit of global brewer AB InBev commissioned a study of 128 retailers to explore the effectiveness of different merchandising strategies. This study aimed to explore and help retailers understand the emerging craft segment trend amid falling premium and value beer sales, and how to effectively market to consumers, given this shift in the beer Category.
A-B explored three strategies: retailers that focused on craft at the expense of premium, those that focussed on premium over craft, and a “balanced” approach that supported all segments of the beer cooler.
The study revealed that although retailers focussing on one segment at the expense of another boosted sales, a balanced approach grew market share higher and more often. This analysis has helped show retailers how to win with all beer, and total alcohol sales, by focussing on the shopper, assortment, promotional support, shopper engagement and retail Analyses.
Since A-B rolled out this balanced platform to its retail grocery partners, both premium and craft segments have performed better, the brewer reports. With category guidance in helping to better understand shoppers, grocers have seen growth revitalisation in the beer category. Premium has stopped a two-year decline; value has slowed its decline, with the smallest losses since 2009; flavored malt beverages and craft continue to show growth; and, thanks to a few new products, premium plus has had tremendous gains.
Popping off the Shelf
Understanding how different stores can be within a specific retailer, banner or even city drove Purchase, New York-based PepsiCo and one of its national supermarket chain partners to look at allocating space differently.
PepsiCo approached the project using a range of traditional space allocation methods, but focussed these methods on a cluster of stores rather than a national view. Identifying the differences among the clusters assisted in the creation of design rules across beverage categories to capture maximum gain with no degradation to the overall shelf performance or increased capital investment.
Each cluster of stores has a unique assortment and merchandising schematic paying close attention to the products that will entice the shopper into the aisle. Helping the retailer focus on these items increases the shopability of the aisle and appropriately allocates space for the high-turning items, thereby reducing out-of-stocks.
Key concepts that resulted in category growth include expanding visibility to growing segments such as woman energy and healthy energy drink segments, creating a ready-todrink tea destination to showcase a tailored package mix and promotional strategy, and creating a premium carbonated soft drink or Hispanic section based on store cluster.
Meanwhile, the Coca-Cola Co. is encouraging category growth by appealing to shoppers’ eco-consciousness.
Coca-Cola’s “2020 Vision” has pinpointed the recycling of 100 percent of its packaging as one of its core strategic priorities. To that end, the Atlanta-based company has created its “Give It Back” merchandising equipment program to engineer recycling solutions with practical business applications.
Give It Back racks are part of Coca-Cola’s initiative to advance the sustainability pillar of “Live Positively” while focussing on optimising packaging for merchandising equipment in retail outlets. Every unit is not only 100 percent recyclable, but also meets robust design and productivity standards.
The racks are Coke’s first step toward a comprehensive, closed-loop retail equipment programme to create recyclable in-store merchandise racks and then recover, reuse or recycle them — an industry first. This “cradle to cradle” initiative resulted in a complete Give It Back family of merchandising solutions, many of which are modular and reusable in nature.
Leveraging Shopper Insights, the Company Cites
Hartman Group research noting that 70 percent of shoppers consider sustainability when making choices in store. Of Coke’s “Live Positively” platforms, according to its own research, environmental initiatives score highest among women shoppers.
The designs are based on Coke’s 3D Visual Identity System, which leverages proprietary brand form equities to distinguish its venders, coolers and merchandise equipment in the retail space. The retail design strategy revolves around “upcycling,” or creating more value from a repurposed or recycled material.
This programme is in year one of rollout, during which time the company has shipped more than 131,000 wood, metal and corrugate Give It Back racks to bottler partners for use in the retail channel. For example, the Dasani Plant Bottle corrugated cardboard rack can be recycled by retailers with a cardboard box baler normally used for recycling cardboard boxes. Shopper feedback is trending positively.
Squeezing out Sales
Turning to its chilled juice offerings, the folks at Coke work with multiple national retailers and their loyalty card data to perform many types of shopper and household analyses. Coke’s learnings yield results that provide clarity for in-outlet merchandising (displays, POGs) that drive incremental volume for the category.
Accomplishing its strategic goals requires Coke to analyze information through a shopper lens, understanding beverage category and total store opportunities from their shoppers’ perspective. Coke’s partnership with many national retail customers in analysing and applying their loyalty card data makes it possible to drive actionable solutions. Using available syndicated and shopper card data, Coke dissected the category, enabling focus against those key business drivers creating category growth headwinds. Syndicated insights gave Coke the direction as to where leakage was occurring, but card data was critical to understanding what specifi c segment and pack size were driving change.
Research and study work resulted in identifying actionable, short-term tactics to address a change in promotional pricing strategies, share gain opportunities on the profi table single-serve juice and drink SKUs, and better pre- and during-shopping communication of category innovation.
Actions to date have resulted in measurable category growth for the retailer, with increases in total category, large and small sizes, and both national and private label brands.
PepsiCo, too, partnered with a national retailer in an effort to better understand the shopper and to optimise category growth in super-premium juices. The goal was to understand what roles each of the four Ps (price, promotion, placement and product) played with these shoppers.
Data collection was supplemented with more formal marketing research to identify the best price points, how to increase household penetration, and how to continue growing the category and gain market share. Through these efforts, PepsiCo reworked the space to include an additional shelf, allowing an increased breadth of assortment. On this shelf, the retailer showcases new products multiple times per year to keep the assortment fresh and exciting.
Since the reworking, the retailer is outpacing the rest of the market with doubledigit growth, with household penetration among the existing shopper base likewise boosted.
Meanwhile, in the shelfstable juice aisle, The Campbell Soup Co. is responding to a consumer environment that’s becoming more complicated and demanding.
Camden, New Jersey-based Campbell is delivering strong growth in shelf-stable juice, a $9 billion category that’s been flat to declining in recent years, with a winning combination of innovation, advertising, one-onone shopper marketing initiatives and gold-standard shelving principles.
The company’s newly expanded V8 portfolio provides convenient products that help people get more vegetables in their diets, including energy drinks, sparkling beverages that combine vegetables and fruits, and drinks aimed at kids.
For retailers, this innovation, along with shopper insights and category management, means profi table growth in the category and new consumers in the beverage aisle.
With its broad coffee portfolio including the Folgers and Millstone brands, The J.M. Smucker Co. entered into the one-cup brewer category, fi rst with Pods and then with K-cups. Since the initial launch, Orrville, Ohio-based Smucker’s has continued to push out on new items and expand its presence in the K-cup segment.
Smucker’s conducted research on the warm beverage aisle — including coffee, tea, cocoa, milk flavorings, creamers and filters — to build a comprehensive knowledge base regarding how to optimise the coffee category. Although Smucker’s doesn’t compete in all of these categories, it was important to include all of them to better understand aisle flow and optimisation, improve shopability, and drive consumer satisfaction. Key findings also included the differences between consumers who purchase a K-cup machine for themselves versus receiving it as a gift, the impact on a shopper’s spending after acquiring a K-cup machine, and the most important factors influencing purchase and driving satisfaction by channel of trade.
Smucker’s has shared these key insights with retail partners to grow the coffee business overall, leading to increased K-cup assortment and dollar share gains over the retailers’ comp markets. The K-cup custom research findings have been presented and shared with several major retailers.
Based on Smucker’s insights, a Southern grocery retailer increased space and assortment for K-cups, boosting its dollar share of the market growth by more than 10 percent for the segment. Smucker’s further infl uenced an Eastern-region grocery retailer to boost its K-cup space, based on individual stores’ shopper profiles