By Terri Allan
Packing a
Pouch
Innovative packaging
expands alcohol drinks
into the freezer case.
42 nacsonline.com February 2013
T
here’s an emerging drink category that’s registering high double-digit sales gains and seeing a wave
of new entrants. Better yet, the fledgling drinks appear well suited for convenience stores and provide
retailers with impulse and add-on sales opportunities.
The drink in question? Alcohol pouches, which rang up total
sales of $190 million for the 52-week period ending November
10, 2012, according to Nielsen — an 80% increase from the year
earlier. The products, typically sold individually in 10-ounce
packages at a $1.99 price point, are the latest in prepared cocktails and allow consumers to enjoy the likes of frozen margaritas without the hassle of preparing them.
While alcohol pouches have been
around for several years, the segment
really took off last year with the entry of brands by Arbor Mist, Parrot
Bay, Smirnoff and Seagram Escapes.
“Growth has been huge,” said Danny
Brager, Nielsen vice president, group
client director, beverage alcohol, of the
segment, which is largely made up of
malt- and wine-based drinks, but also
some comprised of distilled spirits.
As recently as 2010, category sales
were just $10 million, Brager noted.
Convenience-store operators reported that alcohol pouches remain a niche
in their stores. “Even though they did
well, they only accounted for 3.2 % of
sales in the flavored-malt subcategory
in the beer department,” remarked
Matthew Paduano, vice president, category management, at Nice N Easy
Grocery Shoppes, based in Canastota,
New York.
Similarly, Kevin LaFollette, vice president, operations, at the Handy Mart
chain in Virginia, said, alcohol pouches
“do OK, but they’re not setting the world
on fire.” LaFollette surmised that “people prefer to make their own daiquiris,”
rather than consume the ready-made
kind.
Room for Growth
Still, marketers of the products believe
that alcohol pouches have plenty of
room for growth. “We look at the frozen
pouch segment as part of the broader
ready-to-drink category, including alternatives to beer, like flavored malts
and ciders,” said Lisa Coker, chief marketing officer at American Beverage
Corp., a pioneer of the segment with its
Daily’s Frozen Pouches.
The products — wine-based drinks
with seven flavors including margarita
and strawberry daiquiri — were part
of a test conducted with 7-Eleven in
Florida last summer, where the pouches were merchandized in the freezer,
replacing some slow-moving frozen
pizzas. According to John Curran, vice
president of sales at American Beverage, “We’re looking to expand that” in
2013. Daily’s pouches are also available
at Kangaroo Express stores, among other convenience chains, Curran said.
Constellation Brands, marketer of
Arbor Mist wine and fruit beverages,
expanded its product line in 2012 with
Arbor Mist Frozen Wine Cocktails,
packaged in single-serve 10-ounce
pouches. Four flavors are currently
available — blackberry merlot, white
pear pinot grigio, strawberry white zinfandel and mango strawberry moscato
— with new flavors likely to be launched
in the spring, according to Amy Martin,
director of marketing. “We have made
some inroads with the conveniencestore channel,” said Martin, since “that
February 2013 NACS Magazine 43
Alcohol pouches — from brands such
as Parrot Bay, Phusion Projects, Arbor
Mist and Smirnoff — appeal to females,
a consumer many c-stores are actively
courting.
is a channel that the typical Arbor Mist
consumer frequents.”
Beer marketer Diageo-Guinness USA
introduced two malt-based frozen
cocktail lines in pouches last summer
under the Parrot Bay and Smirnoff
banners. Flavors include Parrot Bay
frozen strawberry daiquiri and piña
colada and Smirnoff frozen blue raspberry lemonade and cherry limeade.
“So far, the response to Parrot Bay and
Smirnoff frozen pouches has been extremely positive,” remarked Patrick
Hughes, marketing director, “from
both consumers and retailers. We’ve
found that these products tap into the
macro consumer trends around convenience, as well as premiumization.” He
added that the pouches appeal to consumers seeking a convenient alternative to beer.
Another beer marketer, North American Breweries, extended its Seagram’s
Escapes line of malt-based products
with frozen flavors in pouches last year.
According to Jennifer McCauley, brand
manager, the frozen product is available
in four flavors, including sangria and
margarita, with two new flavors to be
introduced in 2013. In addition to individual pouches, the drinks are available
in four-packs and 12-pack variety packs.
And Phusion Projects, maker of Four
Loko malt beverages, also entered the
pouch category last year with Island
Squeeze Freeze & Squeeze Cocktails in
four flavors, including strawberry daiquiri and pink lemonade.
Convenience Opportunity
While the majority of alcohol pouch
sales to date have been in outlets like
grocery and liquor stores, Brager and
marketers of the drinks see plenty of
44 nacsonline.com February 2013
opportunity in convenience stores. Indeed, the Nielsen executive reported
that sales of alcohol pouches in the
channel jumped 172% in the most recent 52-week period, outperforming
the overall category, with convenience
stores accounting for 7% of category
sales.
The 10-ounce single-serve pouch
is “a perfect c-store package,” Brager
said. “They’re perfect for on-the-go occasions — parties, the beach, picnics.
They fit with the whole convenience
aspect.”
Nielsen consumer research shows
that many of the purchases of alcohol
pouches are in addition to purchases of
other alcohol beverages, meaning that
consumers are not entirely switching
from beer, wine or spirits. “They expand sales, and those sales tend to be
incremental,” remarked Curran.
Alcohol pouches skew toward females — a consumer many convenience
retailers are actively courting. “Our
typical consumer is predominately
female, aged 25 and up, with the core
being women in their 30s,” reported
Martin. The pouches “broaden the consumer set,” she continued. “And those
types of consumers are attracted to impulse buys.”
Brager added that while convenience
retailers have been “curious” about the
bagged products, some are not entirely
clear on how to market them. He advised retailers to, “Understand the
category because it doesn’t fit into anything else. Work with suppliers.”
As with any new category, the
pouches come with their share of challenges for convenience retailers. Not
surprisingly, space issues rise as the top
concern. “Because of the limited space
While sales of frozen alcohol pouches skew toward warmer
months, marketers noted there is opportunity year-round.
in convenience stores, it can be difficult
for operators [to devote freezer and/
or shelf space to the pouches],” said
Curran. Restricted space makes it even
more critical that convenience stores
are stocking the right pouches for their
market and their customers.
Alcohol pouch marketers and convenience-store operators agree that proper merchandising of the items is one of
the category’s biggest obstacles. “These
items are very difficult to merchandise
in a c-store,” said Paduano. “They all
come in 24- to 32-count cases of one
flavor. This is way too large a pack size
for c-stores. We don’t have the room
to merchandise the large racks that
they have available, and the case count
makes it difficult to carry a wide variety
of flavors.”
Meaningful Merchandising
Appropriate, consistent and creative
merchandising can go a long way in
helping to drive sales of alcohol pouches. At some Nice N Easy stores, for example, the products are merchandised
in the frozen food area, as well as on
clip strips inside of bagged-ice freezers.
Marketers advocate that the pouches be merchandised frozen, if possible,
especially in warm-weather months.
“In a perfect world, they would be
available both frozen and warm,” said
Jim Sloan, executive vice president,
sales, at Phusion Projects. When the
pouches are merchandized in the
freezer section, it is imperative to post
signage — such as in the beer cooler or
on the wine shelf — that frozen pouches are available elsewhere in the store.
“Don’t just bury them in the freezer
case,” he emphasized. “Call it out. Use
point-of-sale that leads consumers to
46 nacsonline.com February 2013
the frozen section.”
Martin from Arbor Mist said that if
placement in the freezer is not possible,
the pouches should be merchandised via
counter racks or other small-footprint
racks “to ensure an impulse buy.” Among
the POS tools available from marketers
and their distributors are spring-loaded
glides for freezers, spinner racks, floor
stands and suction-cup racks.
While sales of frozen alcohol pouches skew toward warmer months, marketers noted there is opportunity
year-round. In fact, American Beverage marketed Hard Cider and Spiced
Sangria seasonal versions of Daily’s
pouches last fall, products that could
be consumed warm.
Hughes from Diageo-Guinness added, “The seasonality follows the same
trends as beer and premium adult
beverages, and consumers pick up
pouches year round for those relaxand-unwind occasions or casual get-
togethers with friends.”
Despite the strong growth trends,
retailers remain somewhat cautious
about long-term sales should the
pouches prove to be a fad. But marketers said that with the entry of new yearround brands and greater consumer
awareness, alcohol pouches will continue to garner sales, and convenience
stores will be a big factor.
Indeed, Sloan forecasts that the
products will move from “impulse to
planned purchases” in convenience
stores. Nielsen’s Brager pointed to the
“amazing amount of interest the category has captured in a short amount of
time.” Alcohol pouches, he said, “will
continue to be an exciting category to
follow.”
Terri Allan is a New Jersey-based
freelance writer, specializing in the
beverage industry. She can be reached
at [email protected].
Beyond the Juice Box
The pouch craze has been under way for some time across the consumer packaged goods spectrum, including baby food brands such
as Gerber, which markets them as a way for toddlers to “self-feed”
themselves with hand-held pouches filled with fruits or veggies.
Campbell Soup Co. seeks to win over Millennials with new soup
pouches called Campbell’s Go. Part of the pouch appeal is that it “reduces the amount of materials that are required for the packaging,”
said John Kalkowski, editorial director of Packaging Digest. And “it
also gives you a pretty good surface for advertising, for marketing
the product.”
Other products taking the pouch plunge include ketchup, fruit
drinks and cheese. (Crystal Farms has a pouch that stands up, allowing consumers to set the bag upright while cooking and save space
in the refrigerator.)