Ready-to-drink teas and coffees can generally be found in coolers near delis or checkouts, but confusion remains over where they sell best.
Teas are often placed next to carbonated sodas or with flavored waters and other New Age beverages and bottled fruit juices.
And bottled coffees are likely to be found fighting for shelf space in any of these locations or wedged between cans of ground coffee and boxes of tea bags.
The proliferation of new products has added to the confusion of where to stock tea in the aisles. Fruit flavors seem to make tea more of an extension of New Age flavored waters.
If family-sized bottles and multipacks catch on, teas could compete more strongly with similarly sized carbonated soft drinks, which are often steeply discounted to draw consumers into stores.
Although teas have yet to draw consumers into the aisles the way do soft drinks do, they certainly have strong appeal as impulse products. Here's how several retailers approach the segments:
Doug Keller
director, buyer, grocery/liquor
Save Mart Supermarkets, Modesto, Calif.
Sales are up, but not up nearly to where we used to be with this category. There's been a proliferation of brands in the New Age area, so we're going to review it. We are going to get down to the four items we really need.
Snapple, Nestea, Clearly Canadian and several local brands are competing for same shelf space and consumer.
Single-serve has a higher profit margin. Single-serve is sold mostly chilled. We just put two coolers in every store. They're stocked with Coke and Pepsi carbonated beverages and the New Age items. At the checkouts is the way to sell them.
We're going into value-pack multiples of the single-serve. Snapple increased our sales 8%, mainly due the multipacks and more cold sales.
Frappuccino is the only successful cold coffee so far. We also have Nestle coffee in a can. It does OK, but our customers prefer bottles.
We're going to experiment with in-line sets, putting in 4-foot sections of coolers of New Age beverages. We're reviewing them all now. Our competitors -- Safeway, Lucky, Albertson's -- have all discontinued Clearly Canadian. If the vendor makes a good deal that brings a value, we will keep it.
Pat Redmond
buyer, Rosauers Supermarkets, Spokane, Wash.
Our sales of ready-to-drink beverages have continued to grow at about 8% this year, with additional promotion and new products being responsible.
We are on the cutting edge of the coffee explosion in the Northwest. We recently added a single-serve line of six flavors of coffees that is outstanding in quality and scored very high on flavor testing. It is called Volcano and has been placed in the ground-coffee section in a well-designed shelf display. The product retails for $1.29.
Starbuck's Frappuccino is a huge success in our ready-to-drink section. It is displayed on the shelf in the coffee section and in our soft-drink coolers.
Our best tea sales occur in the pop cooler. Sweetened, unsweetened, and sweetened with lemon raspberry are the big sellers.
Gary Price
vice president, Minyard Food Stores
Coppell, Texas Starbuck's Frappuccino just went in our stores. There have been times when we've had similar product that didn't do well at all. Frappuccino came out some time back, but the Pepsi distributor has delayed getting it to the stores.
We hardly advertise these beverages at all because there aren't any ad allowances. All the distributors want us to promote are the carbonated soft drinks.
Tea is not a growing category. People can brew a big jug of tea for a lot less than it costs for a bottle of iced tea.
We have a 4-foot section in most stores. Soft drinks are on the top three shelves and the bottom is left to New Age beverages and bottled water. We sell more bottled water than tea and coffee. We have cold boxes in all our stores, and some have tea. The vendors choose what to put into the cold boxes. They usually put in the best sellers, which are carbonated soft drinks.
Robert Schwartz
executive VP, Red Apple Cos., New York
We are devoting more space to ready-to-drink beverages. Tea is at a standstill, but the new item in the trading area is Starbuck's Frappuccino. People are definitely buying it up.
We haven't seen 2-liter teas, nor multipacks. We stock loose bottles and cans. In all stores, they're sold in the beverage aisle. Some locations have cold cases. Some stores have refrigerated beverage cases at the checkout, and in others, the cases are along the perimeter of the store.
There's not much co-promotion in which you buy a beverage and get cents off on a snack item. However, they do lend to cross merchandising in our stores with produce. People will buy salad for lunch or dinner or a prepared food from the deli then pick up a beverage to go along with the meal.
Steven DiGeronimo
buyer/merchandiser, Victory Super Markets Leominster, Mass.
Teas are selling very well. They all do well up front. There's some pick up in the aisle, but mostly people want them cold for lunch. We put them in refrigerators along with the deli sandwiches and salads. One of our stores has a food court. We put in a beverage cold box that's doing well. Summertime is when people are really into drinking teas.
A lot of our stores have ready-to-drink beverages in the juice aisle instead of the soda aisle. That's where more space is available. We used to have only small Very Fine 10-ounce fruit drinks in a 4-foot section. Some stores now we have 12 to 16 feet of these beverages. There's a lot of items. Arizona has 3 to 4 feet in some stores.
Peter Dudis
category manager, Big Y Foods
Springfield, Mass.
Our tea selection varies by stores. We don't carry bottled coffees. We determine our own shelf sets.
Single-serve teas sell best cold in the food court. The 2-liters and multipacks appeal to younger consumers who like sweeter products. Weekly ads are not effective in promoting these items. They are not a destination product, but they sell year-round.
