ATLANTA - Coke is introducing a new merchandising approach that it hopes will help revive Center Store sales by bringing order to a drink aisle that's become cluttered with a proliferation of sports drinks and bottled waters.
Coke's proposal, which is unbranded, reorders beverages the way it believes shoppers think about and look for them. It also created new navigational signs that are designed to make it easier for shoppers to find drinks as they walk down the aisle and define various sports drinks.
Coke would, working in retailers' existing beverage space, increase the isotonic section to include other energy-related drinks that typically are placed elsewhere; organize water into six sections; move teas and lemonade from carbonated beverages into a new "refreshment section;" and give more space to innovative soft drinks.
Coke has tested the system in focus groups and has shown the new system, which it calls a Beverage Landscape, to Kroger, Albertsons, Safeway and H.E. Butt Grocery. It hopes to get retailers to agree to test it by early 2006.
The system grew out of conversations Coke had with retailers about reviving the center of the store. Retailers told Coke they were looking at circulars, pricing, store formats and organics, among other areas.
"We've been hearing a lot about what's going on with Center Store and trying to figure out what solutions we can bring to the table," said Chris DeMaio, group director of large-store channel for Coca-Cola Enterprises here. "It really came out to us pretty loud and clear, soft drinks weren't high on the list of solutions."
Coke concluded that reorganizing beverage could address retailers' need to reduce out-of-stocks and help people get in and out of the store faster.
"We're trying to gently educate the consumer," said Scott Wiley, national category manager of hydration for Coca-Cola Enterprises.
The system is intended to improve on Coke's Oasis, a nonbranded merchandising kit that uses signs to divide the water aisle into enhanced, sparkling, imported, purified, spring and gallons sections. About 1,000 outlets representing 20 retailers are using or testing the Oasis kit, which was introduced in 2004, Wiley said.
Retailers using the Oasis kit saw sales increases of 6.4 percentage points above their base sales increases. While the numbers pleased Coke, customers said they wanted a section that made it easier to find the products they were looking for.
While the Oasis kit's signs were best seen when facing the section, the signage of the new merchandising approach is designed to be read as people approach the section. "The old Oasis wasn't ideal for the navigational component," Wiley said. "It came out loud and clear that navigational information was what they were looking for."
Tom Pirko, president of Bevmark, a food and beverage consulting firm in Santa Ynez, Calif., who has had Coke as a client, said the proposed system, as described by SN, doesn't go far enough to address the clutter in the beverage section. There are too many products, not enough space, and products like enhanced waters that blur category lines, he said. Instead, he said, retailers should focus on out-of-aisle displays that capitalize on shoppers' desire for discovery and beverages' associations with food.
