Case Study: Juice Messaging Pilot Test

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1 Case Study: Juice Messaging Pilot Test Published January 2018

2 Case Study: Juice Messaging Pilot Test The Purpose: Two pilot tests were conducted in 2017 at 21 Ricker s locations in Indiana to determine if a targeted messaging campaign would increase awareness and sales of bottled 100% juice at convenience stores. The concept was based on a similar pilot test at two Marine Mart Exchange stores (published in a separate report), where simple messaging on cooler doors increased the sales of bottled water and functional beverages by 21.3% without negatively impacting the sales of other beverages. Location Founded in 1979, family-owned Ricker Oil Company Inc. operates 56 Ricker s convenience stores throughout the central Indiana region. Twenty-one Ricker s stores were selected to run the pilot test, and 21 control sites with similar demographics were chosen to serve as a comparison group for the test stores. Design In 2015, NACS commissioned a study by the Hudson Institute, Health & Wellness Trends and Strategies for the Convenience Store Sector, that examines attitudes and behaviors of convenience store shoppers. The report provides guidance for retailers to sell more items to the Fence Sitter customer segment while not jeopardizing the sales from other segments. According to the report, Fence Sitters are customers who want to be healthy, most likely have kids, convenience is important to them and they are generally stressed out and looking for help and control. To attract these customers, the report makes three core recommendations: 1. Breakfast is a big opportunity to grow sales 2. Price better-for-you foods so that the cost does not exceed value, and educate consumers about such benefits 3. Identify better-for-you products at the point of purchase to help guide decision-making. With the Hudson Institute s recommendations in mind, Ricker s worked with NACS, the Project on Nutrition and Wellness (PNW) and the Juice Products Association (JPA) to design and implement the test, focusing on the health and convenience aspects of bottled 100% juice. NACS refresh Case Study: Juice Messaging Pilot Test 1

3 During the design of the pilot, PNW consulted with Tracy Fox, a registered dietitian and founder of Food, Nutrition & Policy Consultants LLC, to assess the public health community s view of juice. Nutritionists are generally in agreement that although juice has a high sugar content, 100% juice in smaller serving sizes (8 ounces or less) provides key nutrients (Vitamin C) without contributing excess calories and is recommended as a better-foryou option. Ricker s teamed with the ThreeSixty Group, an advertising agency based in Indianapolis, Indiana, to develop the creative designs for the pilot (Figure A), which employed three health-centered messages featuring tomato juice, orange juice and apple juice. The taglines read: Drink Your Veggies, Get Juiced Early and Ultimate Energy Drink! Execution Ricker s ran the pilot test on two separate occasions: The first pilot launched in February 2017, the second in July At the 21 test sites, Ricker s used cooler decals and shelf wobblers to feature the promotional messages (Figure B). At the 21 control sites, no signage was used on the cooler doors or on the shelves. Both tests ran for a total of six weeks. Results In the first test that launched in February 2017, the test sites with the juice signage saw a 2.4% decrease in juice sales, while the control sites (no signage) saw a 3.2% increase in juice sales. During the second round of the test, which launched in July 2017, both test and control sites saw a decline in juice sales. Juice sales at the control sites decreased by 2.4%, while sale at the test sites dropped by only 0.9%. (Figure C) From Figure January C: ALL 2017 STORES through COMBINED July 2017, sales for Ricker s juice IN SALES category POSE performed INTERVENTION at +3.6% for all of 56 stores. It is unclear why the pilot test led to a decrease in juice sales, except for First the Test control sites, during Second the first Test round Feb-Mar 2017 July-Aug 2017 of the 3.5test. Seasonal occurrences and weather may account 3.0 for some of the decline in sales, as year-to-date sales in Ricker s packaged 3.2% 2.5 beverage category had been down 2.0overall. The first test ran during an unseasonably cold winter 1.5 and the second test began during the July 4th holiday, 1.0 both of which may have impacted juice sales. 0.5 In addition, 0.0 Ricker s had seen sales of bottled 100% juice down -0.5by 6.5% year to date (through July 2017); however, -0.9% the juice -1.0 category as a whole demonstrated growth of 0.7% -1.5 over the same time frame. Given current trends and the -2.0 results of the pilot, it is likely that a combination of -2.4% -2.4% seasonal -2.5 and changing beverage trends impacted the outcome of this test. TIME PERIOD TEST SITE CONTROL SITE SNACKS Figure A: The creative designs for the pilot employed three health-centered messages, created by Juice Products Association and designed to fit into Ricker s brand standards. NACS refresh Case Study: Juice Messaging Pilot Test 2

4 Lessons Learned This pilot test demonstrates that a simple awareness campaign does not always lead to an increase in sales. + 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. + Messaging: Convenience store shoppers come to a store to satisfy a need (hunger, thirst, etc.) but don t necessarily come into the store with a preconceived desire for a certain product that addresses their need. Therefore, communicating the functional benefits of specific foods and beverages choices can help customers make a choice, which can also help grow sales of healthier options. These types of functional messages, such as promoting the hydration benefits of water or the benefits of Vitamin C in fruit or fruit juice, provide added value to customers. Defining a product attribute as healthy alone does not generally test well with consumers. Instead, focus on descriptive and functional words that convey value, health benefits, taste and desirability. While this test did not yield positive results for healthy messaging, other tests have demonstrated an increase in sales because of such messaging. See Case Study: Two- Phase Healthy Cooler Planogram Pilot Test. + Store format: Most items (83%) purchased in a convenience store are consumed within the hour. Messages that don t convey a product can solve an immediate need may not resonate as much as messages that describe the functional benefits. This test may prove to be more successful in a store format where consumers are less rushed and shopping for grocery items. Figure B Left: Shelf wobbler in a breakfast/snack aisle featuring the Get Juiced Early! message. Right: A case cooler decal encourages customers to Drink your veggies! NACS refresh Case Study: Juice Messaging Pilot Test 3

5 Summary The convenience store industry shares more ideas than any other retail channel. For this project, retailers allowed NACS to test key insights and share the results with other retailers who can consider how these findings may improve their own operations. As part of its refresh initiative, NACS worked with food and merchandising experts to develop eight convenience store-specific ideas to grow sales based on evidence-based practices. NACS then undertook additional pilot tests to further define how these practices could grow sales (read more at convenience.org/refresh). This pilot test examined the concept to let your store talk using signs and stickers to provide functional benefit facts and/or positive messages about healthy items Duke Street Alexandria VA convenience.org