Not only that, but four days before the first Beverages, & more! opened in Walnut Creek, Calif., across the Bay from San Francisco, a study conducted by Nielsen North America for newly-formed Premium Wine Research Coalition (PWRC) shows that wine buyers are a group that grocery stores should be targeting, not turning away.
The year-long study tracked food store purchases among 40,000 U.S. households beginning in February, 1993. The study revealed that wine buyers made 105 annual trips to the grocery store, compared to 96 for non-wine buyers. Wine buyers spent an average of $2,150 for the year in food stores, compared to $1,895 for non-wine buyers. (Wine buyers were defined as those shoppers buying 1.5 liters or more of wine per year.)
Shopping trips, when wine was in the basket, produced grocery bills 15% higher than the average shopping basket sale ($39 vs. $34) and 35% higher than when beer was purchased ($39 to $29). When super-premium wines ($7 and over) were purchased, the average cash register ring was $44.
Marion Minor, president of Wine-Scan, a Nielsen/PIB service which tracks wine sales in scanner stores, said, "It is the super-premium wine buyer who offers retailers dramatic growth opportunities. Not only does the average grocery expenditure increase when super-premium wine is in the cart, but this wine segment is experiencing the greatest growth in the wine industry."
WineScan reported an 18% growth in super-premium wines for the 52 weeks ending April 23, 1994, while all varietal wines grew 12%. While generic wines fell 6% during that period, buyers of generics still spend 13% more than non-wine buyers on total food store purchases.
(The Premium Wine Research Coalition, which commissioned the study, was formed to pool the resources of several leading wine groups to help retailers market and merchandise premium wine. Current members include Heublein Wines Group, Robert Mondavi Winery, Sebastiani Vineyards and Stimson Lane Vineyards & Estates.)
Boone apparently didn't have to read that report to know that the time is right for a drinks and specialty food retail chain. Boone, who built Liquor Barn into a 105-store $330 million chain and also put Cost Plus into the wine business in a serious way, felt no one was taking advantage of the increasing consumer demand for higher quality wines and spirits and for specialty food items. "We have an opportunity to fill the vacuum."
Boone feels that the trends cited by many chains in making their cutback decisions don't apply to the niche that Beverages, & more! will fill.
"Even though per capita consumption of alcoholic beverages is expected to rise only slightly over the decade, modest growth in the population of drinking age adults and moderate price inflation will result in good overall revenue growth in the alcoholic beverage market over the next several years," he said.
Boone said that the strongest segments of the $50 billion off-premise market in the U.S. are premium wines, imported and specialty beers and premium spirit categories, such as single-malt scotch.
Also, even though the recession is lingering in California, it remains a good state for wine and spirits sales. For example, per capita wine consumption in California exceeds 165% of rite national average, and that is heavily weighted toward premium wines. California has been the top drinks market in the U.S. for the past ten years, accounting for over 10% of total consumption.
Boone has a string of stats ready to convince doubters:
* Varietal wine case volume grew at an annual rate of 15% from 1985 through 1992;
* Five of the country's top ten wine markets, and eight of rite top 20 are in California, comprising nearly 20 percent of U.S. wine consumption;
* Chardonnay sales were up 33% in 1993;
* The specialty food market (the more!) is expected to grow 10% or more annually throughout the '90s according to Rod Wilson, the chain's specialty food buyer.
Wilson said Beverages, & more! will carry over 3,000 food items, more than twice the number found in a typical supermarket.
Boones says that the reason California is an ideal market for premium wine and spirits (and beer) is that 75% of such drinks are bought by customers over 40 years old, with college degrees and annual incomes of over $50,000. Consumption is concentrated in metropolitan areas, where over 40% of the nation's wine is bought. And that is just where the new Beverages, & more! stores are Opening. Boone knows the locations are good, because he opened most of them as Liquor Barn stores and is now returning with Beverages, & more! Many staff positions have been filled with "Barn" alumni as well, Boone said.
Beverages At Work: Now More Than Ever!
New research confirms that a core group of customers are increasing their consumption of coffee and bottled water in the work place. Research also indicates some needs, such as specialty coffee, are not being met.
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Coffee drinkers, especially frequent coffee drinkers, consider availability of coffee at work to be “very” to “extremely” important. This was one of the findings of the research conducted by Harris Interactive on beverage consumption trends presented at the National Automatic Merchandising Association Coffee Service Education Summit in Cherry Hill, N.J. earlier this summer.
Another significant finding was that consumption of bottled water at work has increased dramatically over the past year, outpacing all other beverages. During the same period, coffee consumption held steady overall while there was a drop in soda/iced tea, hot chocolate/iced tea and specialty coffee drinks.
The Harris Interactive research reinforced some of the findings reported earlier this year in Automatic Merchandiser’s “Case for Vending” series, beginning in January. Automatic Merchandiser extracted some of the findings of the Harris Interactive research to formulate part 6 of “The Case for Vending,” specifically those findings regarding how consumers view the importance of beverage refreshments in the work place.
One takeaway from the Harris Interactive research is that in the past year, heavy coffee consumers are increasing their consumption of coffee and other beverages in the work place. The growth could be driven by the desire to spend less money on refreshments outside of the work place due to the recession.
The Harris Interactive information revealed that a cadre of consumers place a great premium on the availability of workplace refreshments. This finding supports Automatic Merchandiser’s report in January that a minority of consumers make the majority of vending purchases, and among this select group, vending sales have not declined as much as sales in other venues.
SPECIALTY COFFEE: AN OPPORTUNITY
The Harris Interactive findings concerning specialty coffee reveal an opportunity for refreshment service providers. The research found that specialty coffee consumption at work, unlike regular coffee consumption, declined in the past year.
However, the decline in specialty coffee drinks at work was likely due to a drop in availability, which the survey also found. The consumption of specialty coffee in all retail channels continues to hold steady, according to various industry sources. The lack of availability in the work place represents an opportunity for refreshment service operators to add sales.
The Harris Interactive research, which is based on an online survey among a stratified random sample of employed American adults, age 18 and above, was conducted in June of 2009. A total of 1,438 respondents participated in the survey.
COFFEE AT WORKS MAKES EMPLOYEES FEEL APPRECIATED
The research found that having coffee in the work place makes coffee drinkers feel like their employer cares about them, making them feel appreciated and valued at work, the researchers claimed.
The obesity epidemic has inspired calls for public health measures to prevent diet-related diseases. One controversial idea is now the subject of public debate: food taxes.
Forty states already have small taxes on sugared beverages and snack foods, but in the past year, Maine and New York have proposed large taxes on sugared beverages, and similar discussions have begun in other states. The size of the taxes, their potential for generating revenue and reducing consumption, and vigorous opposition by the beverage industry have resulted in substantial controversy. Because excess consumption of unhealthful foods underlies many leading causes of death, food taxes at local, state, and national levels are likely to remain part of political and public health discourse.
Sugar-sweetened beverages (soda sweetened with sugar, corn syrup, or other caloric sweeteners and other carbonated and uncarbonated drinks, such as sports and energy drinks) may be the single largest driver of the obesity epidemic. A recent meta-analysis found that the intake of sugared beverages is associated with increased body weight, poor nutrition, and displacement of more healthful beverages; increasing consumption increases risk for obesity and diabetes; the strongest effects are seen in studies with the best methods (e.g., longitudinal and interventional vs. correlational studies); and interventional studies show that reduced intake of soft drinks improves health.1 Studies that do not support a relationship between consumption of sugared beverages and health outcomes tend to be conducted by authors supported by the beverage industry.