Managing the Cold Vault

Mike Buzalka

Ask almost any onsite convenience retailing store manager what product categories are among his or her fastest-turning, and, chances are, bottled beverages will be at or near the top of the list. Hence, effectively managing the "cold vault"—the recessed wall cooler space that stores and displays the bulk of a store's bottled and canned beverage inventory—is a critical factor in an operation's revenue and profit generation equation.

This means juggling a bewildering array of products—carbonated beverages, juices, energy drinks, "new age" drinks, milk and bottled water—in a variety of pack sizes. The goal: the perfect mix of selection and demand that generates the optimum number of turns.

An effective cold vault product selection is important not only for the sales it represents, but for the sales it makes possible in other parts of the store. Because cold vaults tend to be located toward the rear of a store, they promote impulse sales in other categories by making customers walk past other product displays.

"I've always believed that the driver for your store is the vault," offers Rick Barber, associate director at San Diego State University responsible for the campus's five Aztec Shop cstores and a veteran of the commercial c-store world with 7-Eleven Stores.

"While the bottled beverages in the vault may not themselves provide the kind of profit margins we can get for other categories like our prepared foods, it is those beverages that bring customers in and allow us to sell them everything else."

To make the cold vault an efficient traffic driver, as well as a generator of considerable sales in its own right—bottled beverages represent about a third of gross sales in Aztec Shops at SDSU, for example—store managers must pay particular and ongoing attention to the product mix, Barber emphasizes.

He says he reviews daily sales data at each site, evaluating each product on whether it continues to justify its presence in the finite vault space. Fast sellers can win additional slots while slow turners may find themselves either squeezed into fewer racks or even deleted altogether.

"What really matters to me is shelf space to sales," Barber says. "Because of the volume of water sales we have, I need to be able to devote more facings to it."

At the University of Hartford, Foodservice Director Brian Yezierski of management company Ara-mark says he generally reserved two to three facings in the cold vault of the campus's Village Market store for experimental new products. "I don't have a set time that I keep them out, but generally they have to show some potential over a month or so."

Of course, the cold vault is only one part of a store's beverage stock. Many also have beverages on the non-refrigerated shelves, on end cap displays and adjunct coolers and in at the beverage fountain.

These can either supplement the cold vault or complement it. At the Village Market, the adjunct coolers have helped launch a successful line of soymilk products.

At SDSU, Barber say he sells many of the same products at the in-store fountains as in the cold vault because the benefits of the product are perceived differently. Bottled beverages are seen as convenience items that can be recapped for later enjoyment while the fountain drinks are for immediate consumption, often with food.

PHOTO: SAN DIEGO STATE UNIVERSITY