Research: Investigate Retail Merchandising of Multi-Beverage Portfolios

Summary

This research document investigates the retail execution challenges and strategies associated with the expanding multi-beverage-strategy in the beverage sector. As the non-alcoholic (NA) and adult-soft-drinks markets boom, retailers are struggling with how to merchandise these products, leading to a split between “integrated placement” (placing NA drinks next to their alcoholic counterparts) and “dedicated NA sets” (creating separate zero-proof zones).

The document highlights that 70% of beverage purchases are unplanned impulse buys, making visual-merchandising-beverage and planogram optimization critical. It also identifies a massive $40 billion discovery-gap between online product discovery (driven heavily by social commerce) and physical retail availability.

Key Findings

• The Merchandising Split: Retailers lack a unified strategy. Chains like bevmo integrate NA products directly into traditional alcohol categories, while supermarkets like town-and-country build dedicated, separate zero-proof shelves.
• Grocery vs. Liquor Store Gap: Grocery stores often misplace premium NA beverages next to standard soft drinks, hurting their premium positioning. Liquor stores succeed by placing them on dedicated “spirits walls.”
• Impulse is King: With 70% of purchases being unplanned, strategies like the 3-tier system, color-blocking, and cross-merchandising are essential.
• The $40B Digital-to-Physical Disconnect: Consumers discover beverages via social media (e.g., YouTube shows a 3.4% purchase intent for NA brands), but face friction finding them locally, necessitating omnichannel checkout solutions.
• Regulatory Risks: Using identical branding for both alcoholic and non-alcoholic variants increases the risk of accidental purchases and ID-check failures, prompting regulators to advise physical separation.
• Consumer Behavior: The NA category is driven by zebra-striping (moderation) rather than strict abstinence.

Contradictions & Tensions

• Placement Contradiction: Premium positioning dictates NA should sit on the “spirits wall”; regulators demand total separation from alcohol for safety; yet major retailers integrate them directly into alcohol sub-categories for shopper convenience.
• End-Cap Efficacy: Liquor control board research shows massive volume surges for alcohol on end-caps, while observational studies suggest NA beverages actually benefit more from end-cap placement due to lower in-category competition.