More than 165 million people shop at a convenience store every day in the United States, and 83% of the in-store merchandise sold—food, snacks and beverages—is consumed within one hour of purchase, according to NACS Convenience Tracking Program (CTP) data. In fact, a beverage or snack are the two most popular items purchased by customers who also buy gas.

Above all, convenience stores help consumers on-the-go stay hydrated, selling nearly 50% of all single-serve bottled water. Contributing to the success is the Partnership for a Healthier America’s (PHA) Drink Up campaign, which encourages people to drink more water more often.

Drink Up marketing materials—customizable for NACS members—include cooler door signage and a floor decal. In June 2018, Baltimore, Maryland-based High’s implemented a pilot test in its 48 stores to see if activating PHA’s Drink Up campaign would lead to an increase in sales of bottled water. The pilot was based on two previous pilot tests at Marine Corps Exchange stores (in California and Virginia) and Indiana-based Ricker’s (view those results at www.convenience.org/pilottests) to determine whether in-store signage could lead to sales growth of packaged beverages.

The Pilot Test

With convenience stores selling nearly half of all bottled water in the U.S. and consumers increasingly looking for healthier options, there is ample opportunity to promote and grow sales of bottled water.

A previous NACS pilot test at Marine Corps Exchange stores demonstrated that cooler door signage encouraging customers to hydrate with water increased bottled water sales by 11%. In total, water, enhanced waters, functional beverages and diet soda sales increased by 21.3%, compared with the control weeks—and the sales increase did not come at the expense of other cooler items.

High’s worked with NACS and PHA to gauge whether Drink Up signage would increase awareness and sales of bottled water at its stores. The pilots took place on two separate occasions: The first pilot launched in June 2018 and the second in September 2018. Both tests ran for a total of three months.

Beginning June 1, 2018, one Drink Up cooler door cling was placed on each bottled water beverage case door at all High’s locations. The Drink Up cooler cling read: “Hey You…Over Here! Drinking Water Helps You Stay Energized.” The purpose of the functional messaging was to provide positive information about the health benefits of water, and the goal was to prompt time-starved customers and encourage them to purchase bottled water.

Four High’s stores also received Drink Up floor decals that were placed in front of the beverage case doors.

The first test ended on August 31, and the second test ran from September 1 through November 30. Same-store sales data from the corresponding prior-year period were used to compare bottled water sales to see if the Drink Up signage led to an increase in sales.

The Results

During the June 1 pilot test, regular bottled water sales initially increased overall, compared with the year-earlier period. Sales of enhanced waters rose 13% during the three-month test period. Regular bottled water sales fell overall, excluding 1-liter bottles of water, which showed double-digit growth.

There was no significant sales difference between the two stores that placed the additional floor decals in front of a cooler door, compared with the 44 stores that did not utilize floor decals.

During the second pilot test, regular bottled water sales at High’s declined 6%, while enhanced water sales climbed 20.18%, compared with the same period in 2017. Inclement weather from June to August may have contributed to decreased in-store foot traffic, which could have resulted in a decrease of inside sales overall.

Bottled water sales increased 10% year over year.

Lessons Learned

A simple awareness campaign does not always lead to an increase in sales; however, the campaign may have contributed to an increased customer awareness of the importance of drinking water. High’s continues to use Drink Up POS in its stores as executives believe the campaign has increased consumer awareness of drinking water and contributed to an overall increase in bottled water dollar sales in 2018.

“The Drink Up program assisted us in achieving our goal of increasing water sales in our stores in 2018,” said Mike Jackson, packaged beverage category manager at High’s. “The Drink Up POS helps communicate to our customers the importance of drinking water and staying hydrated.”

Other key takeaways include:

• Changing Consumer Preferences: Bottled water sales continue to increase overall nationwide, and as this pilot test demonstrated, enhanced water sales are a growing category. Consumers may be shifting from regular bottled water to enhanced waters for the added functional health benefits. Additionally, traditional sports drink sales were down during both three-month periods, further suggesting that some consumers might be looking for healthier, more natural alternatives to beverages with functional health benefits. Convenience retailers could benefit from marketing and promoting enhanced waters.
• Price vs. Awareness: Since consumer behavior and choice-making are influenced by a variety of factors, such as taste and cost, awareness campaigns may need to be coupled with promotional pricing or other strategies to effectively increase merchandise sales. Retailers also can place POS at areas other than where water is merchandised to increase awareness and supplement sales of other healthier food items, such as salads and nutrition bars.
• Calling Attention to New Products: Many new bottled water products are coming to market, including options designed to appeal to children. In-store signage can call attention to these new items and communicate a healthier drink option for kids.
• Breakfast Opportunity: Morning c-store shoppers are loyal, high-volume customers who value store selection and quality. According to NPD research, the morning meal is the only daypart to show recent growth. Retailers can enhance their packaged beverage sales during the morning daypart by encouraging customers to purchase a bottled water with their breakfast items or coffee through signage and co-merchandising promotions.
• Store Format: Store-specific planograms may have contributed to the increase in sales of enhanced waters and other beverages. Convenience stores can work with their distribution partners to develop new planograms and displays to grow sales of foods and beverages.