COOLER ACTIVITY

RUSSELL REDMAN

Some new flavors and relaxed prices have whetted the consumer's thirst for wine coolers, but space for the category has remained bottled up. Supermarkets essentially have stood pat with their cooler sections, removing slow-selling flavors to fit in new ones, according to buyers and merchandisers contacted by SN.

"We've kind of held the space status quo. I don't think that category is growing," said Tom Roesner, buyer for beer, wine and liquor at Seaway Food Town, Maumee, Ohio.

At Raley's Supermarkets, the space for coolers hasn't changed much either. "The total of SKUs has remained fairly constant in the last couple of years," said Bob Jennings, beverage buyer and merchandising manager at the West Sacramento, Calif.-based chain. Raley's currently carries about 20 stockkeeping units of coolers.

"[Space] hasn't increased or decreased. The category has been fairly steady [in sales] in the past few years," he said. "Prior to that, there was a big surge in coolers. But that's dropped off."

Cooler activity also has been steady at Martin's Super Markets, South Bend, Ind., said Dave Renaldi, director of grocery merchandising. "We've just eliminated some of the slower flavors and put in some new ones."

Joseph E. Seagram & Sons, New York, has the category's newest addition with its Wild Untamed flavors -- tropical fruit, kiwi strawberry and mango -- but anything tropical has been hot, retailers noted.

"It seems like the tropical flavors have done extremely well, like the kiwi strawberry, and there's another one that Seagram's has out, mango, that we're going to be putting in," said Raley's Jennings.

Wild Untamed could be a big plus for Seagram, said Mark Endres, liquor, wine and beer buyer at Save Mart Supermarkets, Modesto, Calif.

"They're on fire. It's really boosted [Seagram] because Bartles & Jaymes has pretty much owned that category, I think, and Seagram's has kind of been lagging behind. But with these new flavors, it's really put a good punch in there for their products," he said. Seagram's raspberry mimosa, wild black cherry and banana daiquiri also are doing well, he added.

Bartles & Jaymes, produced by the E&J Gallo Winery, Modesto, Calif., already has similar flavors, which have been popular, Endres said. "They have tropical [fruit], strawberry daiquiri and margarita," he explained. "Also, they've come out with a couple of new flavors, like fuzzy navel, which Seagram's already had and was probably its No. 1 item at the time." Bartles & Jaymes also added a mai tai flavor.

Save Mart carries 14 SKUs of Bartles & Jaymes and 11 of Seagram's, Endres said. "It seems like this year they've been a little more aggressive [with new flavors]. I believe it was last year that Bartles & Jaymes came out with three new flavors; Seagram's really hadn't done anything. This year, Seagram's came out with five new varieties, and Bartles & Jaymes came out with [two]. So there's not really a lot [of turnover]."

Still, most retailers told SN that coolers have become a more attractive buy because prices have declined. That stems from several years ago, when Bartles & Jaymes and Seagram began switching from wine-based to malt-based beverages, which are cheaper to make.

"What's happening is that repositioning the price has gotten some new [consumers] to the category," Seaway's Roesner said. "[Manufacturers] had it as a wine-based [cooler], and then when it went to the malt-based, it dropped probably $1 a four-pack."

But Mike Bossi, a buyer at Dierbergs Markets, Chesterfield, Mo., has seen cooler prices inch up. "I think cooler prices are higher now," he said. "Our everyday price now is two for $7 on the shelf, so you're looking at $3.50. Now the best price we've advertised is two for $6, where before it used to be two for $5."

New flavors and lower prices have lifted cooler sales, according to figures from A.C. Nielsen, Schaumburg, Ill. For the year ended March 11, the category's dollar volume rose 3.2% and unit sales rose 5.9%. Bartles & Jaymes, with roughly a 46% market share, had a 9% increase in dollar sales and an 11.5% surge in unit volume. Seagram, with about a 30% share, saw dollar and unit sales dip 5.7% and 1.8%, respectively.

"The berry flavors are still doing OK, and the latest margarita flavors they've come out with are doing fine. And pina colada is still pretty decent," Dierbergs' Bossi

said about the two brands. "Strawberry is a staple, and cherry is still a staple item. And Bartles & Jaymes still has their original [flavor] on the shelf, which kind of surprises me, but I think it still does halfway decent.

"At our stores it's still about a 50-50 share" between Bartles & Jaymes and Seagram, he added.

Berry is the biggest seller at Kash n' Karry Food Stores, according to Noah Deal, vice president of alcohol marketing at the Tampa, Fla.-based chain. But cocktail flavors, such as pina colada, are gaining popularity, he noted. "People are experimental. They pick them up and try them," he said.

Flavor trends are similar at Save Mart. "For Bartles & Jaymes, the No. 1 flavor for us is the margarita and then the strawberry daiquiri and the berry flavor," Endres said. For Seagram, "the big flavor is wild berry and then margarita, strawberry daiquiri and fuzzy navel."

Product duplication is a problem, in part because of the trendiness of the coolers, retailers said. "Among Seagram's and Bartles & Jaymes, if one comes out with a pina colada or a margarita, the other comes out with them also. When one blinks, the other blinks," Dierbergs' Bossi said.

Category management has helped hone flavor selection, retailers said. "The way I deal with it is I pull out scan data, research it and get rid of some of the slower-moving items," Seaway's Roesner said. "If there is a duplicated item between Bartles and Seagram's and their top flavor happens to be black cherry and we have one from each [brand], we'll keep them both."

Brand loyalty can be strong, and carrying duplicate flavors lets customers choose, Raley's Jennings noted. "If they're both selling well, we'll carry both," he said. "Why penalize a brand? We carry 100 different types of chardonnays. Why not carry a couple of different types of coolers?"

Coolers are displayed on grocery shelves, endcaps and upright cases, usually with beer or wine, retailers said.

"We have them on warm shelves, and we have them in 4- to 8-foot cold sections in our deli boxes. We also do end displays," Save Mart's Endres said.

Cold coolers sell a lot better, retailers reported. "Whenever possible, in most stores, we try and merchandise it in the chilled beer box," Jennings of Raley's said.

"But space is always a problem. You have to determine whether it is more beneficial to put more coolers or beer in there. We just have the top movers in the chilled box."

Kash n' Karry aims to stock more chilled coolers. "We're being more aggressive [in] giving it more of a cold-box presence because it's a user-friendly package. A 'ready-to-serve drink' is what they call it," Deal said.

Retailers differed on how big a cooler endcap should be. "A large display on an endcap is probably the best thing to have," Dierbergs' Bossi said. "Wine coolers are somewhat of an impulse item, and they make nice displays because of the colorful packaging."

Coolers can't support a full endcap, Seaway's Roesner said. "We have them chilled, and if the store has the space, they'll stack display them throughout the store -- side stacks next to some beer or wine that's already displayed. I don't think sales merit a full endcap for the coolers," he said.

As a promotionally driven category, coolers must be advertised regularly in the summer and be well supported with point-of-sale materials, themed displays and cross-merchandising, retailers said.

"We use mostly POS materials supplied by distributors: displays, bins, signs, beach balls, lounge chairs -- whatever it takes to entice [shoppers] to pick the product up," Seaway's Roesner said. "We try to tie in some of our nonfood items like lounge chairs, beach balls and things like that where we can get another impulse sale."

Martin's ties in coolers with snacks and other groceries in summer displays. "Sometimes we'll put [coolers] in the front of the store in a picnic display," Renaldi said.

Save Mart does a lot of cross-merchandising with coolers, Endres said. "Normally, it'll be in with chips or barbecue-theme items," he said, noting that POS material use is heavy. "We've been getting some hammock-type things from Bartles & Jaymes and, with Seagram's, tropical-theme back cards with palm trees. [They're] a 4-foot end display that fits the whole back display.

"The other thing Seagram's has done is they've been pretty aggressive with couponing," Endres said.

"Right now we have a $2 mail-in, with $1 off a four-pack of Seagram's coolers and $1 off a fruit. So it ties in to produce, too. I think that's because of their new Untamed flavors," he added.

Kash n' Karry also is advertising cooler coupons. "I've been running what we call here at Kash n' Karry the 'Smart Buys,' " Deal said. "The customer can look for a reduced price plus an added-value coupon."

Promotions aside, coolers remain primarily a summer item, though there's a sales ripple for Christmas, New Year's and the Super Bowl, retailers said. After the peak summer months, cooler sales drop off roughly 40% and then rebound in the spring, according to Nielsen figures.