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Research: Investigate Retail Merchandising of Multi-Beverage Portfolios

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Research: Investigate Retail Merchandising of Multi-Beverage Portfolios

Retail Merchandising of Multi-Beverage Portfolios

The rapid expansion of the beverage sector—encompassing traditional alcohol, soft drinks, functional beverages, and the booming non-alcoholic (NA) adult beverage market—has fundamentally shifted retail operations. As producers embrace a multi-beverage-strategy to capture a broader share-of-occasion, retailers are challenged with optimizing shelf space, structuring planograms, and mitigating consumer confusion.

Merchandising Philosophies: Integration vs. Separation

A central debate in multi-beverage retail strategy is how to position emerging beer-adjacent-categories and premium zero-proof spirits. Currently, retailers are split between integration and separation:

  • Integrated Placement: Some retailers, such as the liquor chain BevMo, merchandise non-alcoholic products within their traditional parent categories (e.g., non-alcoholic beer with traditional beer, functional beverages with mixers) [4].
  • Dedicated NA Sets: Conversely, independent liquor stores and select grocery chains are carving out distinct “zero proof” spaces. Supermarket Town & Country replaced glassware and overloaded spirits sections to build dedicated NA shelves adjacent to—but distinctly separate from—the alcohol aisle, catering to sober-curious consumers and shoppers whose religious beliefs prohibit walking down the alcohol aisle [4].

There is also a documented “merchandising gap” between grocery stores and liquor stores. Premium adult-soft-drinks and NA spirits are often misplaced in grocery environments (e.g., stocked next to kombucha or standard sparkling water), which diminishes their premium positioning. In contrast, specialized liquor stores are succeeding by placing these high-margin, $35+ bottles on dedicated spirits walls, leveraging their staff’s credibility to drive sales [1].

Regulatory and Safety Concerns

The blending of traditional and NA portfolios introduces the risk of accidental purchasing. State control boards have noted that “crossover” products often utilize identical branding for both their alcoholic and non-alcoholic variants [5]. This increases the likelihood of employees failing to check ID, or consumers unknowingly purchasing alcohol. To mitigate this, regulators recommend clear signage and separated, dedicated areas for alcohol to reduce unintentional exposure [5].

Visual Merchandising and Planogram Optimization

Because approximately 70% of beverage purchases are unplanned impulse buys, strategic visual merchandising is critical [6].

  • The 3-Tier System: Best practices dictate placing high-volume, low-margin bulk items (e.g., cases of water) on the floor tier, premium and new high-margin releases at eye level, and lighter impulse items on the top tier [8].
  • Color-Blocking and Navigation: Utilizing planograms to color-block categories (e.g., green for energy drinks, blue for sports drinks) helps shoppers navigate complex multi-beverage-strategy displays [6], [7]. Data enrichment platforms are increasingly being used by brands like Coca-Cola to refine shelf strategies, identifying misalignment between consumer interest and physical shelf arrangement [10].
  • Cross-Merchandising: Pairing soft drinks with snacks or energy drinks with fitness supplements creates synergistic sales and caters to specific daypart-customization routines [6], [8], [9].

End-Cap Dynamics

End-of-aisle displays are heavily utilized to boost sales, though their efficacy varies by category. Studies indicate that end-cap displays can boost sales volumes by 23% for beer, 34% for wine, and 46% for spirits [5]. However, observational data shows that the sales lift for alcohol on end-caps is sometimes smaller than for non-alcoholic beverages, partially because non-alcohol shelves typically feature fewer distinct products, reducing in-category competition at the aisle end [3].

Bridging the Digital-to-Physical Gap

Despite physical merchandising efforts, the beverage industry is grappling with a massive discovery-gap. Recent surveys indicate a $40 billion disconnect between where consumers discover beverages online and where they can actually purchase them [12].

  • Social Commerce: Social media is transitioning from a discovery channel to a direct purchase driver, with 63% of 21- to 34-year-olds purchasing alcohol driven by social content [12]. Platforms like YouTube have shown the highest purchase intent rates (3.4%) for non-alcoholic brands [11].
  • Omnichannel Checkout: To combat the discovery-gap, brands are encouraged to integrate multi-retailer checkout options (directing online traffic to local inventory at retailers like Walmart, Kroger, or Amazon) directly from their digital media [11], [14].

Market Drivers and Consumer Behavior

The non-alcoholic beverage category is largely driven by consumers seeking to moderate their intake rather than abstain entirely—a behavior known as zebra-striping (alternating between alcoholic and non-alcoholic drinks) [15]. Investors are heavily targeting the NA market, recognizing that as distribution muscle improves, today’s fragmented categories (functional mocktails, NA beers, adaptogenic drinks) will mature into mainstream retail staples [15].

Contradictions and Gaps in the Research

  • Merchandising Placement Contradiction: There is no industry consensus on where NA beverages should live. While premium positioning advocates argue for placement on the “spirits wall” [1], and regulators advocate for total separation from alcohol [5], massive retailers like BevMo integrate them directly into alcoholic sub-categories [4].
  • End-Cap Efficacy Contradiction: LCB research highlights massive volume surges for alcohol on end-caps [5], whereas distinct observational studies suggest non-alcoholic beverages actually benefit more from end-cap placement due to product density and traffic flow differences [3].
  • Gaps: The research highlights a shift toward e-commerce and social buying, but lacks granular data on how traditional conglomerates (like asahi-group-holdings, heineken-nv, or pernod-ricard) are specifically negotiating shelf space against retailer-owned private labels.

Suggested Additional Sources and Queries

To further develop this topic within the wiki, the following research vectors are recommended:

References

  1. Non-Alcoholic Spirits Are Booming: How Smart Liquor Retailers Are Capitalizing on the Trend | Intentionally Creative — get-creative.co
  2. How The Drink Aisle Became The Best Spot In The Grocery Store — tastingtable.com
  3. Sales impact of displaying alcoholic and non-alcoholic beverages in end-of-aisle locations: An observational study - PMC — pmc.ncbi.nlm.nih.gov
  4. Dry Shelves: Retailers Build Out Non-Alc Adult Beverage Sets | Brewbound — brewbound.com
  5. [PDF] Research Brief - Alcohol Product Placement in Retail Outlets — lcb.wa.gov
  6. Beverage merchandising: strategies, layouts, and planograms — planohero.com
  7. 3 Ways to Impress Shoppers with Soft Drink Merchandising — nexgenus.com
  8. Best Display Techniques for Beverage Products in Retail and Events | A3Distributors — a3distributor.com
  9. Maximizing Beverage Sales With Effective Display Strategies — pfiinstore.com
  10. Harmonya — harmonya.com
  11. Sipping Success: Boosting Marketing for Non-Alcoholic Beverage Brands — mikmak.com
  12. DRINKS Survey Finds $40B Gap Between How Consumers Discover Alcohol and How They Can Buy It, as Demand for Embedded Commerce and AI Recommendations Surges — businesswire.com
  13. Non-Alcoholic Market 2024: Navigating the Surge — ohbev.com
  14. Lessons for Growing a Successful Non-Alcoholic Beverage Brand — mavrk.studio
  15. Investors Tap Into The Zero Proof and Non-Alcoholic Beverage Market — forbes.com

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