C S P November 2013 135

Follow the consumer decision tree to nurture more packaged-beverage sales

Bob walks into a c-store looking

for an energy drink. He knows

exactly what he wants, from the

brand down to the package size.

Joe is not as sure of what he wants, but

he has a hankering for a soda and loves to

try new fl avors.

And Susan is looking for a healthy

beverage option for her 5-year-old in a

fl avor he likes.

Do you know these folks? Would they

be able to navigate your cold vault easily

and quickly, or will they be forced to settle

on a second choice—or, worse, write your

store off as a poor destination for bever-

ages?

A decision tree can serve as a help-

ful map of the likely behavior of these

consumers. It also can highlight opportu-

nities for guiding the purchase to comple-

tion and making the shopping experience

as convenient and smooth as possible.

A consumer decision tree (CDT)

reveals how consumers shop a category,

ranking the order and importance of ele-

ments ranging from occasion and need

state to flavor and brand preferences.

Each tree—typically presented as a fl ow-

chart—is as different as the subcategory

and its core consumer.

“Understanding the way the consumer

thinks about the [beverage] category will

make it easier for them to shop the store,”

says Ivan Alvarado, director of category

management for Dr Pepper Snapple

Group (DPSG), Plano, Texas. It takes the

average consumer 12 to 30 seconds to

make a beverage choice once in the store,

according to DPSG research.

“It’s a good way to manage the shelf

flow and the way the aisle is set up,”

says Tom Prestridge, director of trade

marketing insights for Anheuser-Busch

InBev, St. Louis. “Depending on how

much space you’ve got, it is diffi cult for

a shopper to look at 20 feet and decide

they want A, B or C. … Sometimes I like

A or B. Do I want to get one of each? It

just makes it more shoppable.”

To help in this endeavor, what follows

are examples of CDTs and consumer

insights for some of the biggest cold-vault

segments to help provide a blueprint for

maximizing the beverage category.

Bottled WaterThe Consumer: As packaged beverages

go, bottled water is among the most widely

consumed, according to research by Chi-

cago-based Technomic Inc. Seventy-one

By Samantha Ollersoller@cspnet.com

C S P November 2013136

percent of consumers had bottled water in

the past month, although this skews even

higher among 35- to 54-year-old, upper-

income women. Flavored water skews

younger; while 25% of consumers overall

say they have consumed the beverage in

the past month, among 18- to 34-year-old

males and females the fi gures are 34% and

36%, respectively.

The Factors: According to Chelsea

Allen, senior manager of category and

shopper solutions for Nestle Waters North

America, Stamford, Conn., brand has risen

up the decision tree to take greater prior-

ity. The bottled-water supplier—whose

brands include Nestle Pure Life, Arrow-

head, Deer Park and Ice Mountain, as well

as sparkling water brands Perrier and San

Pellegrino—shared the latest CDT for

the segment, based on research from The

Nielsen Co.

“A few years ago, brand wasn’t up

there,” says Allen, citing that the type of

water (still or sparkling) typically came

first, as well as the water source (spring,

purifi ed, etc.). But bottled-water brands

have so differentiated themselves that they

now communicate more than the label.

A CDT can help retailers better orga-

nize the bottled-water section to make it

more shoppable. “Right now [many retail-

ers] place the still water together; there’s no

premium cut-out section. It’s more on who

is distributing, what the region is,” she says.

Instead, Nestle Waters suggests carving out

sections that refl ect each area of the CDT:

premium brands, fl avored and unfl avored,

sparkling water, glass and plastic bottles,

fl avored and unfl avored, etc.

“Sparkling is such an untapped

opportunity,” says Allen, pointing out

that its share of c-store bottled-water

sales is still small. “This is an untapped

opportunity that will help try to drive this

channel further.”

Still

Sparkling

Premium

Perrier/S.Pellegrino

All other brands

Material

Packcount

Size

Water Consumer Decision Tree

Flavored

Brand

Single vs.multipack

Single vs.multipack

Unfl avored

Brand

Pack count and size

Packagesize

Flavored orunfl avored

Size

Non-premium

Brand

Size

Packcount

According to the latest bottled-water CDT shared by Nestle Waters, consumers now consider brand more than ever, with more practical considerations such as package size and pack count close behind.

While brand is an important factor in the CDT for sparkling water, package material (glass vs. plastic), as well as what Nestle Waters calls “regionality,” tend to rank higher.

Source: The Nielsen Co., Nestle Waters North America

C S P November 2013138

BeerThe Consumer: “Beer’s a pretty univer-

sal piece of the social fabric and diet

for quite a few people,” says Prestridge

of A-B InBev. Hispanics and African-

Americans skew slightly higher in

beer consumption, as do millennials,

according to company research. Baby

boomers drink beer but like to alternate

with wine. Even by gender, beer is sur-

prisingly democratic, with a 55/45 split

toward men, although newer types of

brews specifi cally designed to appeal to

women’s palates are straightening that

lean.

The Factors: According to A-B InBev

research, occasion is the top factor in

making an alcohol-beverage choice.

“What am I using it for, how am I con-

suming it?” Prestridge says. “Is it for me

and right now, or is it for sharing?”

Once the occasion is decided, con-

sumers move on to beverage choice—

beer, wine, spirits—brands and price

segments, and then the desired shopping

experience. “It’s choosing which store

will have what I need at the right price,

cold or on sale,” says Prestridge. “I’m not

just shopping the cheapest. Is it conve-

nient, and who will have what I want?”

Indeed, variety is key in this segment,

he says. “If the store is out of stock, they

will go somewhere else,” says Prestridge.

“If it happens a couple of times, the

shopper stops thinking about that as a

beer store: ‘It won’t have what I need, so

I will take it off the list.’ ”

According to MillerCoors research,

the beer decision tree also begins with

that immediate-consumption mindset.

“The most important factors in choos-

ing a store for beer are cold beer, brand

and package size availability,” says Jeffrey

Schouten, director of channel marketing

for Chicago-based MillerCoors. “Price

is also important, especially for millen-

nials.”

Schouten of MillerCoors agrees that

variety is key for beer: “Keep it cold and

in stock, and make sure the assortment

has the most popular brands and pack

sizes.”

CSDs and JuicesThe Consumer: According to Tech-

nomic, 66% of all consumers say they

have consumed a regular carbonated

soft drink (CSD) in the past month,

with the figure skewing toward 18- to

24-year-old males, 80% of whom have

Beer Decision Tree

This CDT for beer refl ects research for all channels. For c-stores, because around one-half of beer units sold are single bottles, pack size does not play as big of a factor in a purchase as in grocery and other outlets. Beer

Premium/above premium

FAB Imports

Light Regular and ice

Malt liquor

Premium regular

Premium lightCraft/micro

Brand BrandBrand family

Brand family

Flavor and calories

Flavor Regular or light

Brand

SizeSize Size Size Size Size Size

Brand Brand Brand BrandBrand and

alcohol content

Style

Size

Bottle or can

Bottle or can

Bottle or can

Bottle or can

Bottle or can

Bottle or can

Bottle or can

Subpremium

Traditional/Subpremium

“Glass or plastic?”

“Bottle or can?”

“Regular or diet?”

“Orange or grape?”

“Import or craft?”

Source: A-B InBev

C S P November 2013140

consumed a regular CSD. Meanwhile,

44% of consumers have had a diet CSD

in the past month. This segment skews

toward Caucasian, middle-age consum-

ers, likely because of health concerns,

with no strong skew by gender.

For juice, 16% of consumers claim

to have made this purchase in the past

month, skewing toward 18- to 34-year-

olds. Meanwhile, 13% of consumers say

they purchased bottled or canned iced

tea, with a strong skew toward 18- to

24-year-olds.

The Factors: Alvarado of DPSG

shared research from the company’s

2011 c-store study, the findings of

which he says continue to be relevant.

According to DPSG’s research, there

are two groups of c-store shoppers:

regulars who stop at a store because it

is on the way to work or to home, and

those who treat the store as a destina-

tion stop for buying a beverage for the

work day (e.g., construction workers or

landscapers).

When asked why they go to a c-store,

20% of consumers mentioned the need

to buy gas, followed by the desire to buy

an alcohol beverage (12%) and a meal

or snack (11%), according to DPSG.

“The decision of what type of bever-

age they will purchase is determined

by the need they are trying to fi ll,” says

Alvarado. For c-stores, immediate con-

sumption is the sweet spot.

The fi rst item on the CSD decision

tree is regular or diet, followed by sin-

gle- or multi-serve, can or bottle, cola

or fl avored. For juices, the decision pro-

cess is simpler and largely dictated by

the end user, according to Alvarado. If

the purchase is for an adult, the choice

will likely be orange or cranberry juice.

If it is for a child, apple or grape juice is

more popular. For energy drinks, func-

tionality and brand are paramount.

Variety is critical for beverages,

DPSG research found. “A shopper is

willing to drive past a c-store because

they know it won’t have the variety

of beverages they’re looking for,” says

Alvarado. “Once I do get to the store,

the very fi rst factor that will determine

what I want to drink is whether I want

packaged or fountain. Fountain is

preferred because of the value for the

money, or size. On the cooler side, it’s

mainly variety that plays a very, very

important role.”

With CSDs, a large variety of fla-

vors can help drive impulse sales. Of

course, this is limited by the number

of cooler doors and the need to stock

core brands, but leveraging the impulse

nature of other brands and fl avors can

drive incremental sales. For example,

DPSG research shows flavored CSDs

are more impulsive purchases than

colas, but they are not necessarily dis-

played in a way that maximizes that

impulse buy.

“If I go to a typical c-store, the most

prominent position is typically allo-

“They need to make

sure they have the right

product in the right

package, at the right price

point, and for the right

occasion.”

Beverage Consumer Decision Tree

Convenience store beverages

Carbonated beverages

Regular vs. diet

Single-serve vs. multi-serve vs. multipack

Type (cola, fl avor)

Non-carbonated beverages

Milk WaterTea, sports,

juices

Energy drinks and coffee

Energydrinks

Brand tier Type TypePackage

Energyshots

Coffeedrinks

Source: DPSG

The beverage category in c-stores groups into three seg-ments at a primary level, accord-ing to this CDT shared by DPSG.

C S P November 2013142

cated to colas, just because historically it’s always been done

that way,” says Alvarado. “The biggest brands are also ones

that invest the most. We found that by moving flavor brands

into premium position—the ‘strike zone’—you can drive

impulsive, incremental sales for the retailer.”

Package variety, however, is not as important as flavor

variety, says Alvarado: “Having a multitude of different

packages won’t necessarily result in incremental sales. [For]

energy, you have 8, 12, 16, 20 and 24 ounces. Do you really

need all of those package sizes to address the needs of that

consumer? If I don’t find an 8-ounce, will I have a 12-ounce

instead? Or do I really need 24 ounces when a 20-ounce is

enough?”

From the perspective of Atlanta-based Coca-Cola Refresh-

ments, a consumer’s need state—rather than a traditional

decision-tree process—guides his or her beverage choice,

says Clint McKinney, group director, category advisory and

space strategy. Needs states range across several factors,

including occasion, brand, package size and price point, he

says, and consumer needs are continuing to change.

“Before considering preferred product attributes, it is

essential to understand shoppers and their missions,” says

McKinney. Coca-Cola’s iShop Study considered stock-up,

fill-in non-food, fill-in food/beverage, grab-and-go home,

grab-and-go and need-it-now missions.

“Among its many findings, it revealed that one of every

two trips to a convenience retailer is made to satisfy a grab-

and-go occasion,” he says. “This highlights that today’s con-

sumers are time-strapped and desire convenient solutions to

help simplify their lives.

“Retailers can drive all of this by better understanding

their own customers,” McKinney continues. “Point-of-sale

displays, food bundles, cold-vault signage, points of inspira-

tion and more drive targeted merchandising and execution

based on specific consumer needs.

“They need to make sure they have the right product in

the right package, at the right price point, and for the right

occasion.” n

“Keep it cold and in stock, and make

sure the assortment has the most

popular brands and pack sizes.”