Convenience stores represent the next big opportunity for ready-to-drink cocktails, according to a new report from NIQ.
Convenience dollar share for RTDs is up 14.6% since last year, per NIQ data shared this month at NACS. The report provides insight into what categories are leading at the c-store channel, opportunities on the shelf for non-spirit RTDs, how competition is heating up, and the biggest draws for convenience shoppers. Here are top highlights.
BevAlc On Top, Beer Leads
BevAlc leads the list of major beverage categories in the c-store channel, with beer and malt-based beverages leading at $24.6 billion in sales in the last 52 weeks ending September 9, up 5.7% in sales year-over-year. By comparison, energy drinks fall second at $12.9 billion. Spirits sold $3.4 billion, up 10.5%, and wine came in at $1.6 billion, up 8.8%.
Convenience is also taking a strong foothold in total BevAlc dollar growth, rising 6.4% in sales year-over-year. Compare that to sales growth in liquor channels which rose 1.5%, grocery at .02%, and 1.4% in other stores (including venues like drug stores and dollar stores).
FMBs Make Over Half of RTD C-Store Sales, Spirits Growth Up
With RTD products approaching $11 billion in sales and 12% share of total alcohol, the c-store is where the battle for the cold box is heating up. Convenience dollars now represent 47% of RTD dollar share over the last 52 weeks, but certain RTDs are considered mature segments for the channel.
FMBs made up over half of RTD c-store sales at $2.7 billion (up 24.3% and making up more than half of total FMB off-premise sales). Hard seltzers come in at $1.6 billion but have fallen in growth by -7.7%. Meanwhile, spirts-based RTDs and wine-based RTDs both sold $0.4 billion but grew in sales 79.2% and 24.8% respectively.
UPCs Climb
Certain brand families dominate sales, but that doesn’t mean entrants aren’t finding their way to the shelf. Weekly data shows that the top 10 RTD items account for 30% of c-store sales, but the number of spirits-based RTD UPCs ranks at 1,218; FMBs at 1,107; Wine RTDs at 822; and hard seltzers at 626.
Legal Restrictions Create Opportunity For Non-Spirits
As of right now, only 22% of c-stores can sell spirits based on legal restraints, which is equivalent to approximately 27,000 stores across the total U.S. However, as legal changes occur, a multi-million dollar opportunity could open up for those products.
But those restrictions also leave opportunities for beer and wine based products, which can be sold in 100% and 68% of c-stores respectively. C-stores have the opportunities to introduce new flavors and styles, but the report did warn that life cycles will shorten, as seen in the data:
- Hard tea sales were at $834 million in the last 52 weeks, up 38.1% since the same period last year
- Hard lemonade sold $377 million, up 12.5%
- Wine-based cocktails sold $362 million, up 27.9%
- Hard soda sold $86 million, up 65.3%
- Ranch Water Seltzer sold $89 million, down -6.0%
- Hard Kombucha sold $5 million, up 4.9%
The report emphasized the opportunity to win for malt-based (up 101% year-over-year) and wine-based alternatives (+12%), as well as non-alc beer, wine and spirits (+34%), specifically hop water (+311%).
Consumers Looking For Friction Free Shopping
Who is shopping at the c-store? One in four alcohol buyers, amounting to 22% of legal drinking age households. Those trips average to $11 per purchase, with 65% of households making about 18 trips per year.
Purchases are more likely to be consumed the same day, and on 39% of BevAlc c-store shopping trips consumers only bought alcohol, citing location convenience, quick ins and outs, and a refrigerated section as the reasons for shopping at the c-store.
Beyond category types, wellness attributes growing the most in sales are labels indicating no high fructose corn syrup, low-calorie, no sugar added, and eco-friendly.