Convenience store retailers use growler stations to appeal to craft beer enthusiasts.
By Erin Rigik, Senior Editor
Craft beer continues to grow in the convenience store industry. In fact, according to the Brewers Association, the c-store channel has seen the most craft beer growth of any channel in 2015.
“Grocery represents craft’s strongest channel, and as such, is probably a good leading indicator of where craft is heading,” said Bart Watson, chief economist for the Brewers Association, who cited recent IRI Group data. “Craft’s volume share in grocery was up to 10.86% and volume sales were up 16.4% year-to-date (YTD), ending Oct. 4, 2015. By contrast, craft’s volume share in convenience was still small during the same period—only 2.48%—but volume sales were growing rapidly, up 26.2% YTD.”
GOING WITH GROWLERS
Convenience store chain MAPCO, with 360 locations in Alabama, Arkansas, Georgia, Kentucky, Mississippi, Tennessee and Virginia, has tapped into the craft market, with great success. The chain currently operates growler locations at 20 of its c-stores.
MAPCO first introduced the growler program about two years ago. “We decided to go this route as I saw it happening in some hot bed craft areas, such as Portland, Ore., and I thought it was something unique and innovative,” said Damian Wyatt, beverage category manager for MAPCO. “I was searching for something to differentiate us from our competition and this has proven to be exactly that. Customers stop in their tracks when they see our stations; they certainly are show stoppers.”
While beer drinkers are always interested in the growler stations, Wyatt noted that even non-beer drinkers have their curiosity piqued when they walk into the store and see the growler station. Units sold per store per day are up significantly over last year, Wyatt said.
Each growler station offers six, eight or 10 taps. The growlers themselves retail for $3-$4, although MAPCO also offers collegiate and NFL-licensed novelty growlers—which many customers collect—for a higher ring.
While customers usually pay $9.99 to fill their growler, MAPCO recently began its “fall craft special,” where it offers $5 growler fills in certain states and $7 fills in others where it is not per- mitted to sell below cost. “That price point is really moving some product,” Wyatt said.
At MAPCO, craft customers demand variety and local products.
“Local is so important to the success of any beer retailer,” Wyatt said. “If you are not respecting your local breweries, you are not respecting your customers. We value and embrace our local brewers. At any given time we will have upwards of 4-6 local varieties on tap while still keeping the key regional and national brands as the staples. Just as important as local, however, is seasonal. The craft scene and growler scene is all about seasonal.”
That’s because craft beer customers love to experiment with new flavored brews, but even as customers are experimental, Wyatt pointed out they still have tried-and-true beers they return to. The most popular beer choices at the growler station are always changing. “Some weeks it’s a local brew while others it’s a national brand; what I call ‘the foundation’ brands always sell well: Sam Adams, Lagunitas, Sierra Nevada, Blue Moon, as examples,” Wyatt added. “I always keep a cider on tap at each of the stations as well; Angry Orchard, in particular, as this speaks to so many different customers both male and female.”
Sales at MAPCO’s growler stations are fairly consistent year round, with a slight uptick during the busy summer months that bring higher traffic to the convenience stores. “We do equally well during September/October months,” Wyatt said.
SLOW AND STEADY
Wyatt does advise other retailers considering the addition of a growler program to “be patient” with the program, which is a sizeable investment with a long-term return on investment.
“Don’t expect to immediately pay the bills with a growler station,” Wyatt said. “Treat your growler station like you would treat your food concept area. Keep it sparkling clean and inviting. Frequently change your draft offer. Aside from the growler station, you have to be committed to the entire can and bottle craft program. Don’t be afraid to increase your variety in the cold vault.”
The program also takes commitment. MAPCO participates in many local craft festivals. “We do this by partnering with our
local distributors and local brewers. It’s really great to get your company name out in the community,” Wyatt said. “Everyone always says the same thing: that is, they didn’t realize MAPCO was such a craft-focused company. Our goal is to change people’s mentality that they can’t get good beer at a convenience store.”
DRAFTING A DESTINATION
Stinker Stores, a 65-store chain that currently offers growler stations at three of its locations, partnered with The Growler Station, rolling out its first growler offering in May 2014, followed by two more by September of that year. “We felt really good about The Growler Station’s knowledge of the equipment and how their system was configured. We liked the one-stop solution versus building our station. We also liked the space configuration as it fit well next to a counter or window, depending on the store,” said Steve Watts, chief operating officer of Stinker Stores.
Each growler station offers eight taps. Both 32- and 64-ounce growlers are available for $4.99. Customers pay $8.99-$10.99 on average to fill it up, depending on the beer.
“Some of the higher end beers that are seasonal or limited edition can be as high as $19.99, and they typically sell out,” Watts said. “The neat thing about craft beer is it’s a lot of fun and has a loyal following, so it’s really not as price sensitive as other categories, particularly around limited edition beers.” The program is faring well. Growlers create a destination for craft beer drinkers, but Watts noted location is key. While two years ago, growlers were a novelty, now they are popping up at a range of locations. Stinker Stores is careful to place growlers in stores where the demand for craft beer is high and where neighboring businesses don’t also have growler stations.
This fall, Stinker Stores is tempting beer customers with a pumpkin porter. Beers with more hops are also popular in fall, whereas in the summer lighter beers and lower alcohol content beers are in demand. “We have a seasonal IPA for fall that’s going to sell for $19.99 and it has a 9% alcohol content, which is a pretty big one for us, and will sell out pretty quickly,” Watts said.
Stinker works to balance its offering between local brews and national brands, considering what types of beers are most popular for the demo- graphic around each store. Some neighborhoods prefer IPAs, some porters or amber ales. Only craft beers are sold at the growler station.
National beer brand Mac & Jack’s is a staple that does particularly well at the growler station. When people begin to drink craft beers, they often reach for national brands they know and as they become more of a craft beer connoisseur are more likely to want to branch out and try new local flavors, Watts said. “The other key to growlers is changing the beers on a frequent basis so people want to come back and try what you have next.”
Stinker stores changes out some LTOs as often as once a week, while others change out monthly. “While growler stations are becoming main- stream, what differentiates c-stores with growler stations is their selection of beer brands along with their interaction with their customers,” Watts said.
Having a strong craft selection in the cold vault is also key as craft consumers are not dedicated to just growlers or to just bottles.
“When adding a growler station, be mindful of how you merchandise it and listen to consumer preferences. Craft beer in a c-store complements other items but will not make or break the success of your store. It has to be part of a strategy, not the strategy.”