Microbrew sales are growing at a strong clip, while wine and spirits are also poised for a strong 2011.
by: Joe Bush, Contributing Editor
The near-term future of wine and craft beer sales in convenience stores involves value, flavor and products geared toward specific ethnic groups.
The Brewer Association reports that while overall beer sales dropped 2.7% by volume in the first half of 2010, craft beer rose 9% by volume and 12% in sales. “Craft beer represents affordable luxuries in this time of recession, a quality taste experience and a limited-time opportunity to try a unique and special brew,” research group Mintel said in its recent report on adult beverage sales.
Symphony IRI Group’s craft beer sales in U.S. convenience stores jumped 11.92% to $283.7 million for the 12 months ended Nov. 28, 2010. Industry volume also surged nearly 10% to 6.93 million cases sold.
The top five brands in U.S. convenience store craft beer sales for that time period were Sierra Nevada; Gambrinus Co.’s Shiner Bock; Boston Beer Co.’s Samuel Adams Boston Lager; New Belgium Brewing Co.’s Fat Tire Amber Ale; and Boston Beer’s Samuel Adams Seasonal.
“We’re seeing growth almost across the board,” said Lundy Edwards, general manager for Forward Corp., which operates 28 Forward-branded convenience stores in Standish, Mich. “There is a certain portion of society that is still not in dire straights. They tend to try new things, so they are moving into that upper-end segment.”
Forward has expanded its single sales area to more than a door for the first time. “We run a five-door set that includes a door-and-a-half of just single beers,” Edwards said. “We’ve also expanded our craft beer SKUs this year about another 10%.”
Targeting Wine Customers
In line with craft beer sales increases, wine sales are also on the rise. According to Nielsen data, in states where convenience store wine sales are permitted, sales grew by 9% during November 2010. Most of that activity took place in the $3 to $6 range, followed by the $9 to $15 group. Boxed wines and private label wines are popular. 7-Eleven, Kum & Go and Huck’s have been industry pioneers with private label wine efforts.
Inexpensive brands of wine appeal to Millennial (mid-1980s birth) consumers, according to Nielsen. The most popular price category is $7 and under, which accounts for 72% of in-store volume.
C-stores are well-positioned for wine drinkers impacted by the recession. Mintel found that 27% of wine consumers reported drinking more wine at home and 22% said they are drinking less wine in general due to the recession. Nearly 20% said they are cutting back on wine at bars and restaurants to save money, while 15% are trading down.