Convenience stores were a bright spot for the beer category in 2023, with dollar sales in the channel up +5.2% for the first 11 months of the year, according to market research firm Circana.
To share insights on how suppliers can make inroads in the channel, Extra Mile Convenience Stores category manager for alcoholic beverages Michelle Abdollah and Bump Williams Consulting VP of analytics and insights Dave Williams shared the stage at the Brewbound Live business conference earlier this month in Marina del Rey, California.
“The growth we’re seeing for beer in c-stores is a lot faster and stronger than other off -premise classes of trade,” Williams said. “It’s a lot of the usual suspects – you see the Mexican imports doing very well there. FMB is doing well. Below premium, value brands are doing well from the domestic side.”
Historically the domain of large multinational brewers, c-stores haven’t been synonymous with craft beer’s success, but that is starting to change, Williams said.
“There are a lot of success stories coming across a wealth of styles and package formats, believe it or not,” he said. “It is single, yeah, but four-packs and 12-packs and variety are also finding lanes to win – so, multiple avenues, maybe not as many winners but, collectively, some pretty good numbers.”
Year-to-date through December 3, the craft segment is positive in both dollar sales (+4.5%) and volume (+0.5%) in convenience stores, compared to declines in grocery stores. New Belgium’s Voodoo Ranger family is driving craft in the channel, particularly in 19.2 oz. single-serve cans.
“Single-serves are about 70% of the unit movement and about 30% of the dollar share,” Abdollah said, describing how she plans out shelves in her stores. “I look at it in terms of space to sales allocation, unit to space, how much that segment warrants.”
With the decline of draft as a sampling vehicle, 19.2 oz. cans may seem like an appealing alternative to craft brewers, but Williams cautioned them to be wary of margins.
“It’s settling into a pretty tight price point on what people are looking for in these single-serves as a standalone or a two-for type option, so I think a lot of suppliers have to keep that in mind and work backward,” he said. “A lot of times, the margin is not going to be there in that type of price point for this format.”
One of the brightest stars in the beer category’s constellation in 2023 is non-alcoholic (NA) beer. Dollar sales of NA beer in c-stores increased +28.1% in the first 11 months of 2023, but only accounts for a miniscule portion of dollar share. Abdollah said she selects NA brands accordingly, knowing they account for “a very small amount of that pie – just about less than 1% of the dollar share in c-stores.”
“When we’re playing with a four-door cooler set, or five doors, we’re not going to probably bring in more than maybe one or two SKUs and it’s going to be those leading SKUs that are already showing to do well, Heineken 0.0. Corona just came out with a 0.0 that’s already starting to catch up with Heineken.
“We’re looking at some of those brands that already resonate with the customer,” she said. “The customer knows and understands the assignment. They know what they’re going to be expecting to drink when they drink it.”
Watch more of Abdollah and Williams’ conversation with Brewbound managing editor Jessica Infante above and look for more coverage of Brewbound Live 2023 in the coming days.