a break from the norm

Red Hed Oil stirs up interest in its packaged beverage category with a warehouse soda.

by Kate Quackenbush
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While other companies consistently sell large quantities of non-alcoholic packaged beverages, Richmond, Ky.-based Red Hed Oil has always been a go-to place for beer. The company devotes four to five doors to beer, with just one door for water and one door for everything else.

“Our stores have always done a great deal of beer volume,” John Yellman, category manager for the 17-store chain, told Convenience Store Decisions

. “The bulk of our sales come from six-packs out of the cooler, as opposed to floor displays. There’s just something about the beer category that demands the product is cold. It’s not like buying a warm, take-home pack of soda. You can’t drop an ice cube in a beer.”

In an effort to increase its carbonated soft drink (CSD) sales, Red Hed recently took on a warehouse soda that offers a better price point than the category leaders. It’s been carrying all the different flavors of Faygo soda since January and it’s been impressed with the movement, even though the company has done little to promote the new beverage.

“We carry 24-oz. bottles in the cooler and two-liters in our beverage aisles, and it’s done very well for us,” said Yellman. “We figured on carrying all the different flavors until we could measure what was selling well and it’s all moved pretty well for us. All we have is basic signage on the cooler doors and the front door. Once we know which flavors are favorites, we’ll devote more attention to advertising, but for now the lower retail is enough to get our customers to try it.”

Yellman says that the 24-oz. package is continuing to show growth. The company will take Faygo up on its offer to do taste testing in Red Hed stores to spread the word down the line.

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