Canadians looking for their best shot at improving health and increasing immunity, especially during the pandemic, are purchasing food and beverages that go beyond just satisfying appetites and quenching thirst. The trend is gaining traction and c-stores are well positioned to get in on the action.
The 2021 Nourish Network Trend Report from Nourish Food Marketing stated that more than half of consumers claim to use functional food (58%) or beverages (56%) to treat a specific condition, or for prevention. In response to COVID-19, 35% of consumers said they are doing more proactively to take care of their physical and emotional health now, versus pre-pandemic. Shoppers are also ‘future-proofing’ and seeking to top up their nutrition. Instacart searches for vitamin C alone jumped a whopping 74x early in the pandemic, according to the report. It goes on to say, “The lines are blurring between the supplement and grocery aisles, and that trend will accelerate in 2021.”
The global functional shots market size was valued at US$369.3 million in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 13.4% through 2027, according to Grand View Research.
Canadians want to bolster their immunity—and fast. Enter functional beverage shots. It’s a hot category poised to hold its heat this year. Stewart Ingles, president of Hilary’s Salesmaster, the Canadian distributor for 5-hour Energy, says that 2020 was a very good year with double-digit sales growth as consumers spent more time focusing on exercise while working at home. That translated into increased use and purchases of its sugar-free energy shots, which are formulated with caffeine, amino acids and B vitamins. “Based on current trends and the pandemic, we see 2021 shaping up to be another record year,” he says.
Ingles recognizes the vital role c-stores play in 5-hour Energy’s sales success: “They are very important to our consumers. Convenience stores are quick and easy stops to get our product.” He encourages retail partners to carry a large selection of the flavours, including watermelon, cherry and blue raspberry. “Our nine-box racks work best to display product—the more it’s front and centre, the greater the purchase rate by consumers.”
Molly Jacobson, communications director at VitaminEnergy, cites convenience as a big selling point. “Consumers are seeking a more convenient way to nourish their bodies with vitamins on the go, while boosting their energy levels... without sucking back loads of sugar,” she says, pointing out that while orange juice delivers vitamin C, it’s often loaded with sugar.
Consumers who want a dose of vitamins, coupled with an energy kick, have fuelled sales growth in a big way for VitaminEnergy. The brand is popular in the U.S. and growing in Canada, where it is being sold by independent retailers, with plans to roll out to larger chains, including Circle K, in the coming months. Sale in the convenience store channel are strong. The magic behind its success? “Merchandising is key,” says Jacobson. “When VitaminEnergy has parity merchandising in c-stores, it sells at the same level or higher than older brands in the market. Offer two for $5 EDLP (everyday low price) to gain trial.”
She also recommends retailers have six to eight SKUs minimum, since each one features a different vitamin compound. “Different vitamins attract trial from a diverse consumer base,” she adds. That base includes consumers ages 18-plus and a very high concentration among those in the 35 to 58 range, evenly split between male and female. Next up, VitaminEnergy will roll out in pill form, targeted to mood, focus and immune support.
Nipping at the heels of the big players in the fiercely competitive functional shots arena are newcomers worth noting. Proper Wild is aiming to dial up the good-for-you factor by offering plant-based shots without any preservatives or artificial sweeteners. Meanwhile, So Good For You lives up to its name by incorporating certified organic, non-GMO ingredients and a healthy dose of probiotics into their refrigerated products. While these products are not yet available in Canadian c-stores, distributors take note, their explosive growth points to a fresh area for the category—refrigerated shots.
Originally published in the March/April issue of Convenience Store News Canada