Drug Stores: Create a Winning Beverage Strategy

Beverages are more important in today's drug stores than ever before. They are proven traffic drivers, boost units per transaction and provide profit punch. Expanding consumer demand for these products hasn't been lost on operators as they build new stores or remodel existing ones.

While beverages are centerpieces of shopping missions, the category is changing, with myriad options and consumer desires requiring retailers to work with suppliers to navigate the new rules. Some drug stores even compare the category to such departments as fashion or cosmetics, where it is paramount to keep up with trends. (Interestingly, a manufacturer of trendy nail lacquers recently named a collection after Coca-Cola.)

There are thousands of scenarios driving shoppers to your stores for the beverages they want, when they want them. With more than 750 beverage options – of which 200 are low- and no-calorie – The Coca-Cola Company is uniquely positioned to provide shoppers with diverse choices.

Yet a winning beverage strategy demands research into shopper dynamics. With its rich history and extensive consumer research, Coca-Cola understands shoppers and can help retailers establish a winning beverage category strategy.

We know consumers have different need-states and occasions that translate into shopping missions when on the prowl for a beverage. For example, commuters consuming breakfast on the go need ease and convenience with smaller single-serve, immediate-consumption packages, while other shoppers' purchasing decisions may be driven by varying factors.

Identifying need-states that lead to different shopping missions is essential. You may want to consider:

• Do your customers look for a quick burst of energy?
• Are they in the market for a beverage to hydrate after the workout?
• Is their beverage a meal replacement? And where will they consume it — at home with dinner or on the go?
• Is a consumer shopping while waiting for a prescription to be filled?

Your answers can help guide formats, assortments, marketing programs and technology strategies. That's why The Coca-Cola Company works with retail partners to determine shopper behaviors and anticipate them — whether that means offering promotions for those stocking up, on a fill-in trip or wanting to grab a snack and drink on the way to their next destination.

Coca-Cola not only works with retailers to choose the right brands, packages and promotions, but also every new product launch addresses beverage trends and occasions. What's notable is that most introductions are not merely brand extensions, but basket-builders that are add-on items. Other launches bring new customers into drug stores because they can now buy products that fit their lifestyles.

Here's a look at some traditional and recently launched brands from the Company that are well-positioned for drug store shoppers:

• Low- and no-calorie options, including Coca-Cola Zero™, Diet Coke^® and Sprite Zero™, which account for more than 50% of sparkling category sales in the drug channel (according to Nielsen Dollar Sales 2013).
• DASANI DROPS®, Minute Maid^® drops and vitaminwater zero™ drops. These concentrated liquid flavor enhancers enable your shoppers to customize water. This category has attained $1.8 billion in annual sales and is growing. (Source: Nielsen Scanning, All Measured Channels, latest 52 weeks ending 7/27/13)
• NOS^® Energy Drink appeals to young adult male energy drink users. NOS can help provide high-performance energy and enhanced mental focus.
• ZICO^® Pure Premium Coconut Water is the ultimate in natural hydration. With five electrolytes and as much potassium as a banana, ZICO has broad appeal.
• Core Power^®, a naturally flavored high protein shake made from real milk that helps support the development of lean muscle. It is ideal for active lifestyle consumers.
• POWERADE^® ZERO is formulated with vitamins B-3, B-6 and B-12 to aid in the metabolism of the body's stored energy.

Innovation isn't only in products, but in packaging, too. Mini-sleek packages offer smaller portions of shoppers' favorite brands, in 90- and zero-calorie servings. The 1.25-liter package gives shoppers with smaller households an opportunity to purchase brands in a convenient and portable size — at $1 price-point. Both these packages have been successful revenue and profit additions to our drug channel customers' portfolio of offerings.

• Today, 41% of Coca‐Cola trademark volume in the United States and Canada is low- and no-calorie, according to Nielsen dollar sales 2013. Coca-Cola Zero was one of the most successful launches, and Diet Coke is the nation's No.2 beverage. Across the zero-calorie sparkling portfolio, Coca-Cola offers shoppers choices. For example, last year we introduced a caffeine-free version of Coke Zero. The top-selling zero-calorie brands – Diet Coke, Coke Zero and Sprite Zero – account for more than 50% of sparkling category sales in the drug channel (Nielsen dollar sales 2013), and help drive trips and profitable baskets.
• Coca-Cola is a leader in offering a wide range and variety of brands in this burgeoning category, from DASANI DROPS™ and Minute Maid drops – the first liquid beverage flavor enhancer in the U.S. made with 3% real fruit juice as prepared – to vitaminwater zero™ drops, the naturally sweetened, zero-calorie liquid water enhancer available in four flavor selections.