Progressive Grocer Product

WIN 2015

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From carbonated soft drinks, which are always a staple but certainly have reported some turbulence in recent years, to new, ready-to-drink, value-added beverages from companies a zillionth the size of the soft drink giants, the beverage segment delivers something for everyone with innovation, packaging and convenience. Consumers' desires for the ultimate convenience, in particular, creates a battleground for grocers as they fght for immediate-consumption beverage dollars. Convenience stores win big here, capturing a large share of consumer spending on immediate- consumption beverages. Some grocers have fought back by delivering on-the-go meal solutions complete with drink options, but overall category assortment, as well as marketing, merchandising and pricing, are imperative to protect and grow share. The fastest-growing categories in beverages point right to the consumer need states of convenience, function, and of course, hydration. According to IRI, the fastest-growing categories are: • Ready-to-drink tea/cofee +12.0% • Energy drinks +8.9% • Bottled water +8.4% • Cofee +7.9% • Sports drinks +7.2% Source: IRI multi-outlet plus convenience data, for the 52 weeks ended Aug. 9, 2015 A Long Pour of HeALtH & WeLLness Beverage trends align with overall CPG trends of health and wellness and solid value. Consumers are looking for beverages with functional attributes that ft their personal lifestyles, and they will pay more for them. Sometimes this takes shoppers closer to the perimeter, where fresh juices and value-added fresh beverages live, but center store is still home to the vast majority of beverage options at grocery retail outlets. Strong performers include: • Functional beverages featuring turmeric +282% • Refrigerated cultured or fermented beverages +62% • Raw refrigerated juices and functional beverages +52% • Flavored sparkling waters +22% • Non-GMO project verifed refrigerated juices +19% Source: SPINSscan Natural and Specialty Gourmet (proprietary), SPINSscan Conventional (powered by IRI), 52 weeks ending April 19, 2015. Growth is based on dollar volume for the current period versus year ago and is based on currently coded items. Sales growth in many segments indicate that shoppers are putting the bucks behind their belief that beverages can contribute to a healthier lifestyle, even one as fast-paced and on-the-move as most consumers live today. Something for Everyone Center store houses (most) beverages, making it jam-packed with powerhouse brands and niche products seeking to deliver something for everyone. ith center store generating more than $410 billion, a whopping $88.4 billion in beverage sales account for nearly a quarter – 22 percent – of center-store sales, according to Chicago-based IrI multi-outlet data, plus convenience, for the 52 weeks ended Aug. 9, 2015. CENTER STORE Winter 2015 / Progressive Grocer Products Showcase 1 3

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