With two months to go until all e-cig products must adhere to EU Tobacco Products Directive 2 legislation, retailers that get a compliant range in place now will reap the rewards, writes Chris Dillon
Why stock e-cigarettes?
In an increasingly challenging market, any category with an astronomical rise in popularity should be of interest to independent convenience retailers.
The number of people using e-cigarettes is growing and shows no sign of stopping.
Jennifer Roberts, customer marketing vice president at Blu, says: “There are now more than 2.8million vapers in the UK – an increase of 300% since 2012.”
Stocking the right range of e-cigarettes presents a massive opportunity for you to prove you can offer expertise about a category that the majority of smokers are still getting used to.
Jeremy Blackburn, trade communications manager for JTI, said: “A lot of shoppers coming in won’t have much knowledge about the category and will be looking for support from the retailer.”
There’s also a financial incentive to stock e-cigarettes. Margins tend to be between 30 and 70%.
Changes in legislation mean that there has never been a better time to start stocking e-cigarettes.
Roberts says: “TPD2 legislation is likely to lead to 55% of vape stores closing and, combined with an expected boost in consumer confidence, we expect there to be a shift in sales from vape shops and online retailers to convenience stores.”
What do I need in my range?
You don’t need to be an expert on every single brand to be well-known for this category.
The first step to becoming a destination for e-cigarettes is selecting a range of brands that cater for different needs. Roberts says: “Make sure you’re offering customers the right product for their smoking needs, open systems for heavy smokers or closed systems for light smokers.”
Tanks systems are the most popular type of e-cigarettes as they are more convenient and easier to use than others. Blackburn says: “The tank market has grown by 47% in the past year, with 88% of vapers using this type of device.”
You should then stock as many flavours as space allows that go with the brand you have selected.
Roberts says: “As a minimum, we recommend stocking a tobacco e-liquid, plus some flavoured liquids at different strengths to meet the different needs of consumers, as well as one closed system kit and the associated refill cartridges.”
Ask your tobacco shoppers if there are any e-cig brands they prefer or would like to try. Christian Mulcahy, business development director at MultiCig, says: “Our business has grown through word-of-mouth, we cater for everyone from the vape newbie to the vaping enthusiast.”
It’s just a few weeks until the summer sport season kicks off. Donna Pisani reveals how it is helping drive sales.
“It’s set to be an exciting summer for the soft drinks category, with a range of launches and brand activity to tie in with people dusting off their barbecues, having summer nights in, and enjoying UEFA Euro 2016 and the Rio 2016 Summer Olympic Games.
“Our Coca-Cola range is a firm favourite with consumers, and to further make the most of its popularity we have launched Coca-Cola Zero Cherry in 330ml and 500ml formats to tap into the demand for exciting new flavours of popular products.
“With this summer’s Euro 2016 tournament kicking off in June, Coca-Cola is helping retailers to build excitement with a ‘win tickets’ on-pack promotion. It will appear on 90million packs of Coca-Cola, Coca-Cola Zero and Diet Coke, including 500ml, 1.25l and 1.75l bottles and 330ml can multipacks.
“Another summer staple is bottled water, which continues to dominate the soft drinks category thanks to the continued rise of the health-conscious consumer, and Glacéau Smartwater has played a key role in this growth, achieving a value of £19.4m.
“This makes it an ideal choice for retailers that are looking to increase their range, and Glacéau Smartwater is available in 600ml and 850ml bottles, while the release of a six-bottle multipack is set to increase its popularity for future consumption.”
Keep on top of trends
The good news for convenience retailers is that the number of impulse purchases are increasing. CCE’s Donna Pisani says the volume of drinks bought to consume instantly grew steadily in 2015. “This trend looks set to continue and retailers can tap into this by stocking a variety of pack sizes in their chillers for people to consume quickly,” she adds.
In soft drinks one of the biggest trends is still value. Price-marked packs are a sure way of communicating to shoppers that you are offering a fair and competitive price. Boost’s Simon Gray, says: “Of the top 100 selling energy drinks, 67 are price-marked packs. Comparing PMPs and non-PMPs, PMPs are growing considerably faster.”
Shoppers also think that larger formats offer greater value, which is driving growth in the sector. AG Barr’s Adrian Troy says: “The carbonated energy drinks category continues to grow. Now worth £612m it’s one of the biggest categories within impulse soft drinks, within this big cans are growing 10%.”
It’s also important to stay wary of flavour trends and stock products that your customers will be looking for. James Logan, commercial director of Refresco Gerber, says: “Within juice and juice drinks, orange continues to dominate, accounting for 30% of value sales. This is followed by apple at 9%. The fastest-growing flavour is coconut.”
Adrian Troy, head of marketing at AG Barr, explains how to change your fixture to capitalise on summer sales.
“Soft drinks is one of the most important categories in your store for driving footfall so it’s important to stock the product ranges and brands your shoppers are looking for. We’re working closely with retailers to meet consumer trends with our top-performing brands: Irn-Bru, Rubicon, Rockstar, Strathmore and Barr.
“Chilled availability is the key driver for soft drinks sales, particularly during the critical summer months. Shoppers consume 21% more soft drinks during the summer, with water, juice drinks and flavoured carbonates delivering the biggest increases. Retailers who adapt their ranges to reflect this trend, particularly in the chiller, will benefit significantly.
“Empty shelves equate to lost sales, so review your range and space allocation by category often, based on your own sales data and local knowledge. If a product is selling out regularly, increase the number of facings.
“Take-home packs are also significant as they are higher value and encourage footfall. Secondary displays, merchandised with complementary products to appeal to shoppers hosting a big night in or barbecue, can drive significant incremental sales, especially when linked into an event such as a sport.”
Keeping on top of these trends and reflecting them in what you stock can help you attract more customers and give existing ones more options. Britvic’s Nigel Paine says retailers should segment the chiller into four areas, carbonates, still, energy & vitality, and water. “Take advantage of growing segments, such as iced tea, to grab the attention of consumers looking for more choice,” he explains.
Learn more: Have a look at our summer special to make the most of the summer season.