The weather is heating up, and so is the action in the soft drink category. Retailers looking to create a little fizz in this all-important category's sales are relying on increased advertising, sometimes elaborate displays and continued pricing battles between major manufacturers to shake things up.
BR> Supermarket circulars and newspaper ads already are featuring a heavy dose of soft drink advertising. With the Memorial Day weekend already history, retailers and manufacturers have hit full stride in their march toward heavy summertime merchandising.
"The heavy season, particularly with soda, has already begun," said an executive with a Mid-Atlantic chain, who requested anonymity.
"We start promoting soda heavily through increased store displays in April or so because that's when people begin to do things outside. By the time Memorial Day rolls around, we're simply fine-tuning our approach by expanding things a little further. It's easy to do because once Passover and Easter are over, the seasonal aisle gets turned right over to summer items. They can stay all the way until it's time for Halloween displays."
Other retailers contacted by SN are planning similar approaches to boost summertime soft drink sales. The following is a sampling of responses from retailers queried about their summer soft drink strategies.
From an advertising standpoint, we treat soft drinks the same whether it's summer or winter. But from a display standpoint, we probably have more satellite displays of our featured canned product -- usually 24-packs. We also usually have a 2-liter display, but we might do some other incremental things during the summer months. For instance, we might display 12-packs of a [soft drink] company or get more into the ready-to-drink teas, isotonics or something like that.
Our stores are fairly high-volume, which doesn't leave us a lot of room to cross-merchandise. We almost always have a full endcap for whatever the feature is. But occasionally we will cross-merchandise nuts and things like that.
Comparing 1995 to 1994, I don't think the price promotions have been as strong. But a lot of that has to do with the aluminum increase that the soft drink people incurred. And as they approach these major holidays, I don't think the promotions are as hot this year as they were last year for Memorial Day. So, just judging from the first five months of the year, I would say 1995 is not going to be as aggressive as 1994.
We got involved in the private-label business as a company last September. And the numbers that I've seen show private label, over the last year, declining. They were declining even when we got into it.
grocery merchandising manager
We shift more into mass-merchandising displays rather than just an endcap. We do a lot of lobbies and large displays.
Nobody's getting fat on pop prices, so we try to put in other items to improve our profitability during the summer: cup holders, chips, pretzels, condiments, barbecue products, etc.
Root beer floats are a tie-in item with ice cream. We will have a freestanding display of root beer there [in frozens] to tie it in with ice cream, either with a coupon or a demo, so customers can taste it.
We will promote every week, and we alternate with national brands. And we do include our private-label brand [Rosauers Finest]. Major soda brand promotions are held every week, every month, day-in, day-out. We're not really trying to sell private label in place of national brands. We're trying to give our customers an option. We don't view our private-label soda as an offensive measure; we view it as a defensive measure so customers won't go to other stores.
On a year-in, year-out basis, I'd say 12-packs sell the best, but during the summer 24-packs sell more.
VP, government and
The soft drink category is such a high-volume area, and there are so many new items coming in constantly. We feel the key to success in getting the most out of sales is space management.
Soda sells well 12 months a year, but there is a sharp increase in the warmer months.
We often have a few endcaps on the featured 2-liter items and so on because they are such high-volume items. As soon as we get into the warm season, the drinks pick up even more, and more endcaps are given to them because it is so difficult to keep these blockbusters on the shelf.
Refrigerated soft drinks are also becoming a big thing, especially in the city areas, where the people come home from work and go to the supermarket and want to have something cold for dinner. We keep a large quantity on ice in the city stores.
Little by little, private label is picking up a larger share of the soft drink category. We have Master Choice in all of the flavors. It comes in 12-ounce, 1-liter, 2-liter and 3-liter sizes.
We find that because of the quality control of private label, our Master Choice brand is a quality product. We are not increasing sales of Master Choice soft drinks by leaps and bounds, but we are making inroads into market share of that total category. This is because the price is right and the quality is right. Like every other product category, there are some people who will only stick with the brands.
To get our share in the market, we are very fortunate in our big stores, where we can put cases right into aisle displays, a couple of ends, and if the store has a wall the cans are stacked there. Over the weekend, everything is just torn apart, and that is good for sales.
With soft drinks and the tremendous variety of sizes and labels, there are customers for all of them. There are very few poor sellers because people buy soft drinks on every trip to the supermarket. Sales depend on the amount of space available. It is a good category to apply category management to. If you have scanning, you can determine -- because of turnover and new items -- just what action to take.
Minyard Food Stores
Our weather doesn't change here. There's little difference between winter and summer, so the soft drink category doesn't change that much. We promote soft drinks 52 weeks a year and do nothing different with our promotions or displays. Cross-merchandising with soft drinks is also a consistent, year-round practice.
There's still heavy promotion from the major manufacturers, but "heavy" is a relative word. There's been a price increase. So the same amount is coming off, but the base price is higher.
DSD buyer H.G. Hill Stores
Sometimes, around the Fourth of July, we'll have a pallet of cans up, and sometimes we have it on the side wall. And for the other major summer holidays, we usually put up a potato chip display around the can display.
Right now, Coke's using its Atlanta-based tie-in with the Olympics. They've got an Olympics promotion going on with our 12-pack can display. That's been a big success.
What they've got is a display in the store with the cans of Coke. There's a book with all the Olympics events, and the customers go and pick out what they want to see. They fill out the form and send it in with a check to order their tickets.
This year, the promotion deals aren't the same on cans as they were last year because of the aluminum situation, but they've made up for them on 2-liter products.
What doesn't make sense to me is that aluminum is higher, but the beer people never moved on their aluminum. We don't have private-label sodas. Shasta is the closest thing we carry. I don't buy Shasta, but I've heard it's doing a lot better this year in sales.
Super A Foods
Naturally, we promote soda more during the summer. We basically stick with Pepsi, Coke, 7-Up and private-label [Springfield] brands. We'll do what we've always been doing [for soda merchandising]: We stack 'em and run ads in the paper. In fact, we'll probably be doing a little less this year because the major manufacturers have stepped back with promotions. This is the first year I think all the majors have backed off from deep promotions.
Beverage sales are way off from what they were a year ago. And the major manufacturers aren't doing as many discounts or coupons. Where they used to go deep down on rebates, they don't do that anymore.
Private label is still a lesser price, and people are looking for value. We always tie chips in with the beverages.
In the last five months, none of the majors has done much with it [soda promotions]. We'll see when the summer comes; maybe they'll change their minds.
Handy Andy Supermarkets
We're doing a program with one of the regional soda purveyors in town with 7-Up, RC Cola and Big Red soda brands. We're doing a promotion a month with them that
will include all types of seasonal tie-in items, such as ice chests and salty snacks. Everything that's summer-related we tie in to.
As it is with most markets, soda is not a big markup item. It's a quick turnaround item. Every week a major brand of soda or water is in our ads. That's just the way it has to be down here. The product we deal in a lot is the 8-pack, 20-ounce throwaway bottles.
Black Mountain, N.C.
In the summer, we put out more displays. We don't advertise the soda more in the summer. We do cross-merchandise soft drinks with other products.
We're pretty aggressive on pricing soft drinks year-round. That is something that we do on a weekly basis. We have a schedule that we follow with Coke and Pepsi, and we advertise one of them every week. We rotate them, and we are at cost or below on the featured items in soft drinks. Whichever one is on sale that week is the one that will get the blip in sales.
During the summer, we really push the big can packs -- the 12-packs and the 24s. But this year things are different. With the new plastic bottle, I don't know what is going to happen. In my house, we switch to cans around this time of year because I don't want bottles outside because they break. But the new 20-ounce bottles is where the market is right now, and they bounce.
The 2-liter bottles are an all-year thing. Their sales really don't change. It is either a party in the wintertime or outdoors in the summer.
Private label is not that much of a factor for us.
Prices are going to be real competitive. You don't see an ad in the paper now where somebody is not losing money. It is used as a draw to get people into the store, but everything is used as a draw these days, so you don't make any money.
We try to do some cross-merchandising. But our stores are really small, and we don't have the space to be doing much of that.
VP, grocery merchandising
Gerland's Food Fair
We devote one end to each brand of soda and another to what we have on sale. The chips and soda are what we're really big on in the summer. Gatorade and Powerade will be key beverage displays as well.
Almacs Inc. and Great
Coke, Pepsi, 7-Up and other soda companies will work with stores for merchandising in the summer. You do a big portion of your beverage sales around the holidays and throughout the summer.