Goodbye cola wars, hello coffee wars
It was only two years ago that bottled water overtook soft drinks as the most consumed beverage by Americans. In Canada, soft drinks may have ceded first place long ago. In fact, the Coffee Association of Canada (CAC) indicated 71% of Canadians drank coffee yesterday, compared to 29% for soft drinks. Tea, juices, bottled water and even alcohol all ranked higher than soft drinks. Yesterday’s cola wars are over, making way for today’s coffee wars. Companies starved for growth have become more aggressive with promotions, but past tactics are becoming less effective. To fuel stronger coffee sales, retailers must redefine shopper value through experience.
From improving aisle navigation to linking café equity down the aisle, shopper experience has never been more critical to offset category maturity and value erosion. Kantar US revealed 60% of shoppers desire a “stress-free” shopping experience, closing the gap between shoppers that prioritize spending less money and shoppers that want a good deal. To win the coffee wars in grocery, better experience is essential. Here are three insights to flesh out a better coffee experience:
- Coffee is primarily a planned purchase. Eighty per cent of coffee sales are planned, and in-aisle experience becomes more important as coffee matures. Pods are the dominant single-cup format, satisfying variety with small sizes and building loyalty with larger sizes. Instant, disc and traditional segments are now primarily discount-driven and take up more shelf space. No retailer can afford to alienate any shopper group, yet shelf visibility is finite. Without better organization, shoppers become frustrated. Any solution to a better in-aisle experience begins with understanding your shopper and ends with simplifying shelving and assortment. Depending on your shopper, an elevated experience may mean organizing the coffee aisle by segment or brand.
- Coffee shoppers crave education. Shelf signage helps shoppers select the right wine through describing origins and tasting notes. The same could be done with coffee. With more consumers aging into coffee, they require education on brew methods, roast types and origins. Manufacturers help with education on the package, but integrating education on fixtures will better inform the shopper and improve shopper experience. Taking this one step further, retailers and manufacturers can partner to offer coffee lessons to enhance product knowledge through participatory education.
- Coffee belongs in center store and perimeter. More than 25% of coffee baskets already include perimeter categories such as bakery, dairy and fruit. Coffee displays in the perimeter should not come as a surprise because shoppers would expect coffee to complement meal occasions. And as younger coffee drinkers fuel emerging trends, new adjacencies will bring coffee into more aisles. Adventurous coffee drinkers already experiment with spiced coffee, matcha espressos and even fermented coffee. Does coffee belong in the spice aisle? Some shoppers would not find this unconventional.
In-aisle navigation is the foundation of a better shopper experience. Winning the coffee wars requires educating the shopper and elevating coffee throughout other parts of the grocery environment.