Winning in Convenience Retail

The Way of Shopper Marketing Classified - Internal use 1

Winning in Convenience Retail

[email protected]

Kelly Marr - Group Director, Commercial Strategy NRS,Small Store Channel Strategy & Marketing

Winning in Convenience Retail 2014Clinton McKinneyGroup Director Category Advisory

Confidential

Today's Discussion● State Of The Industry● Our Approach To Shopper

Solutions And PITA● 2014 CR Strategic Imperatives● Innovation● Key Program Summary● Tools/Resources For Winning● Summary

Confidential

Drive Consumer Recruitment And Consumer Brand Preference Through

Immediate Consumption And “Ice Cold Refreshment”

Occasions

“Ice Cold Refreshment”

Increase Our Volume, Profit And Share, And

Become Our Customers’ Most Valued Supplier

“Most Valued Supplier”

To Be A Total Beverage Solution

Provider To Our Customers, Resulting In

Category Growth Leadership And System

Profit Contribution

“One Voice”

MISSION ROLE OBJECTIVE

1 2 3Convenience Retail: Role of the Channel

Confidential

The State of the Convenience Retail

Industry

Confidential

The Future Is Bright In Convenience Retail

10K New Stores Opened in

Last 5 Years

170MM More Trips Made To C-store

in Past Year

$5.5B in Incremental

in Store Sales in Past Year

Source: Nielsen TD LINX; NPD Convenience Store Monitor

Confidential

Pressure on Gas (Cost, MPG, Habits)

Unemployment Slow to Improve

Consumer Confidence Improving, But

A Long Way To Go

Many Challenges Remain


Confidential

Competition for Convenience

34%

34%

23%

5% 4%

13,400 New Stores Top 5 in Total Stores

Top 5 in Store Growth

C-Stores

DollarStores

DrugStores

Grocery

Mass Merchandisers

% of U.S. Store Count Expansion in the Top 20 Expansion Chains – 2012 vs. 2007

Source: Nielsen TD LINX;

Confidential

Competition for Convenience

34%

34%

23%

5% 4%

13,400 New Stores Top 5 in Total Stores

Top 5 in Store Growth

C-Stores

DollarStores

DrugStores

Grocery

Mass Merchandisers

% of U.S. Store Count Expansion in the Top 20 Expansion Chains – 2012 vs. 2007

Confidential

Food Service On Fire

Confidential

44%5%

Cold Vault Under Pressure

SSD

Energy Bee

r

Wate

rJu

ice

Sports

Drin

ks Tea$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

$4,000,000,000

Trips Where A NARTD Bottle/Can Beverage Is Purchased

Trips For BeerSource: Nielsen TD LINX; NPD Convenience Store Monitor

Confidential

Cold Vault Under Pressure

SSD

Energy Bee

r

Wate

rJu

ice

Sports

Drin

ks Tea$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

$4,000,000,000

Trips Where A NARTD Bottle/Can Beverage Is Purchased

Trips For Beer

44%5%


Confidential

21% are 25-34Years Old (+1.3)

46% are Female(+1.3)

24% Have HHIncome <$25K (+1.5)

Key CR Shopper Segments That Are Growing

9% are Students(+2.2)

Changing Shopper Landscape

Source: NPD Conventional C-store Demographics12 ME March 2013

Confidential

PITA – The Framework for Driving Category Value

P I T Ax x x

SHOPPERS IN YOUR STORES

SHOPPERS BUYING THE CATEGORY

TIMES THEY PURCHASE

AMOUNT THEY SPEND

Store Households

(Category) Penetration

Trips per Household Net $ per Trip

Confidential

2014 Convenience Retail Direction

Doug MiddlebrooksAVP, Commercial Marketing & Operations

Convenience Retail Channel Priorities

4 Drive Fill-in Trip Consideration & Conversion

2 Leverage Consumer Preferred Brands & Marketing Platforms to Drive Transactions

3 Accelerate Foodservice Beverage Incidence & Grow Average Check Size

F2Create Customer Value via Shopper & Customer Solutions, System Expertise and Industry Leadership

1 Drive IC Beverage Conversion Across the Outlet

F1Address Critical Focus Shopper Groups: Blue Collar, Hispanic, Teens

Confidential

Sustained Impulse

Zone Activation

Coke with Meals

Activation – All Day

Coke with Snacks

Power of Many

Partnerships

Maximize Innovation &

Expand Space

Targeted Coca-Cola Freestyle

and Frozen Expansion

Activate Big Events & Shopper

Passion Points

Drive Traffic & Fill In

Conversion with FC

Convenience RetailChannel Initiatives

Confidential

Sustained Impulse Zone Activation

• Timing = Annual, Ready to Sell T3 2013• Refreshed insights

Nearly 1 out of 5 Bottle/Can beverages are purchased on impulse. Source: NPD CSM 2012

• Pilot Market Learning from T2• Full Year In and Out Offerings supported by

Marketing• Secure permanent equipment as #1 priority;

Food Case and barrels secondary; Ambient Tertiary

1Drive IC Beverage Conversion Across the Outlet

Confidential

Sustained Impulse Zone ActivationDrive IC Beverage Conversion Across the Outlet

S O N D J F M A M J J A16oz

19.2oz

Pilot Markets only16oz $.99 in Cold Vault

Assumptions: 16oz in Cold Vault, Everyday $.99Incremental placement in open-air dairy or sandwich cases

16oz Thermo #1Starts January

“Cubes”

16oz Thermo #2Launch pre-Memorial DayNew Creative for Summer

Coke ZeroCh Coke Zero

$.99

Assumption: 19.2oz = In/Out Package in barrels and FEMs: Single retail $1.19 or $1.29; Multiple retail 2/$2 or 2/$2.22

Coke and Sprite (Fanta and Coke Zero TBD)

16oz Thermo“Cubes or Snowflakes”

Coke, Sprite, Surge (TBD)$.99

Share a CokeExact packages and timing TBD

Share a Coke 20oz and 16oz PET

1

Confidential

Coke with Meals Activation – All Day


Meals and snack sales are up +4.1%. Source: NPD CREST YE Feb 2013 Top brands consumed with lunch are Coke and Diet Coke. Source: CBL 2011

• Coke with Food Brand Preference and Legacy• Around the Clock, Around the Store

Day-part Strategy: Breakfast, Lunch, Grab & Go• Meals creative platform enabling consistency

and efficiency around Meals activation … Expanded Design Machine capabilities

Accelerate Foodservice Incidence and Grow Average Check Size2

Confidential

Coke with Snacks Power of Many Partnerships


PM Snacking accounts for 41% for meals & snack traffic.Source: NPD CREST 12 ME Feb ‘13

PM Snack occasion is up 2% in traffic driven by that young millennial, a key shopper in CR Source: NPD CSM 12 ME 1st Qtr ‘13

1 out of 2 CR trips include a purchase of only 1 item. Source: ishop 2012

• Powerful, Sustaining Partnerships with Leading Snack Companies (Mondelez, Kelloggs, Hersheys, General Mills)

• A robust, flexible capability to create shopper andretailer relevant offerings by utilizing industry leadingtools and insights (ADOPT, Resource Guides, Design Machine templates)

Leverage Consumer Preferred Brands & Marketing Platforms to Drive Transactions3

Confidential

Maximize Innovation & Expand Space

• Timing = T1 2014, Ready to Sell T3 2013• Refreshed insights

Having unique and appealing products are important on 38% of trips. Source: ishop 2012-Top 2 Box

• Full Operating Plans by late T2 2013• Live Samples for sell in• Pilot market learning and consumer testing• Early year timing and space

management support• Leverage Accordion to establish strategic importance

of Beverages to influence Display, Points of Inspiration & Store Design

Drive Beverage Conversion Across the Outlet4

Having Unique and appealing products - important on 38% of trips"

Confidential

Targeted Coca-Cola Freestyle & Frozen Expansion


A large number of 25-34 year olds are driving traffic to C-stores (up 1.3 pts). They tend to seek different experiences that only this channel can offer like Coca Cola Freestyle and Frozen Beverages. Source: NPD CSM 12 ME Mar 2013

• Coca-Cola Foodservice at RetailResource Guide

• Coca-Cola Freestyle Marketing Sharepoint• Dispensed Selling Story for CR

Accelerate Foodservice Incidence and Grow Average Check Size5

Confidential

Activate Big Events & Shopper Passion Points


CR shoppers have key passion points like NASCAR. 18% of CR shoppers are very or somewhat interested in NASCAR indexing at a 119 compared to all other shoppers. Source: Scarborough 12 ME Sept 2012

• Powerful calendar of Major Events, aligned with consumer passions

• Combination of National Scale andLocal Relevance

• Shopper Marketing Expertise

Leverage Consumer Preferred Brands & Marketing Platforms to Drive Transactions6

Confidential

Drive Traffic & Fill In Conversion with FC


Fill-in trips are very valuable trip to CR as the basket is 75% higher than an average Grab & Go trip. Source: ishop 2012

10% of trips to CR are the Fill-In for Food and Beverages . Source: ishop 2012

• Exciting new innovation for 2014 … The Sixer!• PRGM Excellence coupled with Marketing Pull• Incremental ambient merchandising

of smartwater and 1.25L SSD

Drive Fill-in Trip Consideration & Conversion7

Confidential

KO Energy 2/$X

Mix, Match, Hydrate (PA 32oz, vw 20oz, sw 700ml)

KOZ NCAA

KOZ NCAA

KOZ NCAA

PA NCAA

AM/PM Combo Daypart Coupon

KO/KOZ Hershey’s Combos

Fuze $0.99 1L

PA NCAA

vitaminwater 20oz/32oz Text4Tix

Dasani Drops Small Size Bundle (tbd)

Flavors Pricing Activation

NOS MMA

Share a Coke - TBD

JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DECT1 T2 T3

CV – Core SSD

CV – Tea

CV – IEW

CV – KO Energy

Meals

Dispensed Promo

Impulse Zone

SSD FC

Snacks

CV – Flavors SSD

Still Ambient

CV – Water

CV – Juice

CV – Sports Drinks

KO Winter Olympics Ahhh Coke/Coke Flavors KO World Cup KOZ GamingKOZ Fall Football

KO World Cup KO HolidayKOZ Fall Football

KO Winter Olympics Ahhh Coke/Coke Flavors KO World Cup KO HolidayKOZ Fall Football

Smartwater Racks PA World Cup smartwater rackPA Football

MMJTG 2/$3 MMJTG Gas fora Year Contest MMJTG 2/$3 (tbd)

PA World Cup PA Football

NOS Active MMANOS NASCAR NOS MMANOS MMA

PA World Cup

PAZ Olympics

KOZ Gaming

NASCAR 19.2oz NASCAR 19.2oz Fall Football 19.2oz

2014 Convenience Retail LOS Calendar – General Market

Confidential

Channel Tools & Enablers

✔Enhanced Foodservice Tools: Foodservice in Retail Page, Freestyle Marketing Guide

✔NEW Automated LOS for CR

✔Category Advisory and K&I Support

Confidential

1

2

4

3

F1

F2

Winning in Convenience Retail in 2014Drive IC Beverage Conversion Across the Outlet

Leverage Consumer Preferred Brands & Marketing Platforms to Drive Transactions

Accelerate Foodservice Beverage Incidence &Grow Average Check Size

Drive Fill-in Trip Consideration & Conversion

Address Critical Focus Shopper Groups: Blue Collar, Hispanic, Teens

Create Customer Value via Shopper & Customer Solutions, System Expertise and Industry Leadership

Confidential

The Way of Shopper Marketing Classified - Internal use

THANK YOUFor additional information please visit the Shopper/Customer Marketing Community at

www.KOSCMarketing.com

Winning in Convenience Retail

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