NACS Review

For all its bombast on the media circuit – including its willingness to sponsor a dude who nearly became a human comet – Red Bull has long kept a low profile when it came to trade and industry events. In contrast to its babe-and-truck laden competition in the energy drink business, the company’s booths at trade shows were often stark affairs, in color scheme and attitude much like a heavily sedated Bang & Olufsen showroom.

But give the team at Red Bull credit – they know where they need to turn when it comes to pumping excitement into the brand. So it wasn’t at all surprising that the company has started to use the National Association of Convenience Stores’ annual show as a springboard for its new initiatives.

In fact, Red Bull’s reveal of new flavors at the recent NACS Show in Las Vegas involved showmanship that was strikingly similar to that of the other suppliers battling for attention. A giant truck sat on one side, a virtual reality demonstration on the other. Bass-heavy music throbbed, straining the confines of the booth.

The reason? Energy and convenience are inseparable companions. Like the half of a married couple that announces its plans to spice things up, Red Bull has begun to understand that it needs to introduce something new into the relationship on occasion – or else it might lose important space in the heart of the store.

Red Bull brought three new products to the stage at NACS under its “editions” brand, adding permanently a Yellow Edition (tropical fruit) that it had previously kept exclusive to 7-Eleven, as zero-calorie Orange and Cherry Editions. That brought the brand’s total number of SKUs to eight – or, along with Red Bull Red (cranberry) and Blue (blueberry) – enough to hold an extra shelf, at a time when competition is growing in convenience from Monster Energy and Rockstar.

The new products aren’t launching nationally until mid-February, but the importance of the NACS rollout was clear. James Ford, the director of business insights for Red Bull North America noted that “NACS is the key show to build excitement and showcase products to store owners big and small,” and that the company had initially launched the Editions line two years previously.

“Now more than ever consumers are looking for functionality in their beverages, attributing to the growth of the energy category in convenience,” Ford added.

Indeed, the relationship between energy and convenience is almost as close as the relationship between gas and convenience – both represent a kind of pick-me-up that allows the driver to get to the next destination. Depending on the brand, convenience sales can account for between 50 and 65 percent of total revenue.

But that means that, just as auto manufacturers are changing their approach to fuel consumption, so too are the drivers. While adding some flavor variety might be considered a massive step for Red Bull, shops like Monster and Rockstar are used to providing showgoers with a more unbuttoned experience. Both used a combination of babes and bass to draw in gawkers – but it was for the same purpose as Red Bull: to get the all-important placement in convenience, and maybe add new parts of the store.

More willing to take risks on innovative functions and flavors, both Monster and Rockstar showed off coffee combos, energy drinks stacked with protein, and all manner of varieties geared toward creating new, incremental sales.

“We think the retailer can benefit a couple of ways,” said Monster Brand Manager Geoff Bremmer. Increased functional variety “can give the the chance to sell more to the same consumer, but also sell to the new consumer, as well.”

More women are shopping convenience stores – and the channel is attempting to provide stores and products that will appeal to them. It’s a channel that is changing and the brands they carry are changing with them, noted Franklin Isacson, an investor with global consumer fund Verlinvest. That company had two brands, Sambazon and Vita Coco, that were trying to impress convenience buyers at the show.

“The channel is adapting,” Isacson said. “Through health and wellness, better for you, the brands are growing up and know that convenience can be a place that works.”

For energy drink companies, then, serving the channel means serving more than the traditional “Bubba” consumer.

Unless, that is, Bubba wants to go organic. Because if he does, Rockstar noted that it’s got a product for him, as well.

Jason May, the company’s EVP of marketing, made it clear that Rockstar might have been serving up some slightly esoteric products at the margins of its portfolio, Rockstar Organic, coffee varieties featuring almond milk, and a horchata – there was no doubt the brand would continue to try to keep its base consumer happy.

“We might have 19 different liquids, but we certainly don’t have 19 facings in all stores,” May said. “We have to direct eight or nine core products.”

Over-hybridization is a concern, he said, but he added that with the new products, “the portfolio is as strong as it’s ever been.”

May observed that keeping the portfolio strong and convenience-focused is important because, for now, it’s the main beachhead for the category.

“Look, the bulk of the big CSD companies are still super-strong brands,” he said. “Respective to CSDs, there’s been a big decline, and the space we occupy is space they once had that has gone to energy drinks. But CSDs have an incredible stronghold in other channels.”

Still, if a Rockstar Organic or an almond-milk Horchata appeals to consumers in another channel, that’s an example of the category becoming more pervasive within stores that have traditionally catered to the group that is now turning to convenience with new dietary demands.

That’s why the NACS Show also featured a group of companies making their first attempts to meet consumers in convenience – they recognize, again, that convenience store shoppers might be expecting to find on-trend products in any channel.

Thus it wasn’t necessarily surprising that health-and-wellness focused, socially conscious brands like Mamma Chia or Sambazon were on hand at NACS, or that Reed’s would be offering up its high-end Ginger Brew or Virgil’s CSDs as an option after eight years away from the show.

“Natural keeps penetrating deeper into the mainstream,” noted Reed’s founder Chris Reed. There’s enough demand for it to stick and be part of the convenience channel.”

Still testing the waters, Sambazon displayed a collection of products at its booth — from Blended Breakfast, its meal replacement product made with strawberry, banana, chia and ancient grains, to its kale and ginger Supergreens beverage, to its frozen Acai bowls. The brand sampled only a handful of products, though, and its energy drinks sat at the front of the booth. 

“We primarily wanted to show this as an alternative to Red Bull,” said Peter Wilson, executive VP of sales.

Another alternative was in the Advantage Sales and Marketing brokerage hive, where Matt Buckley, the head of sales for Mamma Chia, was looking to a changing consumer set to drive the market for products with similar outlooks.

“Look, the millennial is changing the whole world,” Buckley said of the massive generation. “In the convenience channel, if they don’t address their priorities [like health and wellness], it’s going to be hard for the stores.”

Even so, it’s a slow build, and despite the fact that some buyers were seeking out the brand, he said that smaller companies like Mamma Chia need to be careful when trying to get into convenience stores.

“They’ve got to be in the right areas,” he said, “and not even necessarily chain-wide.”