At the 2019 Georgia Association of Convenience Stores (GACS) annual convention in Amelia Island, Fla., June 23-25, Bonnie Herzog, Managing Director – Equity Research, Wells Fargo Securities LLC, spoke about the beverage and tobacco industries — including a detailed discussion on current trends and industry outlook.
Convenience store operators formed GACS in 1973. GACS Staff monitors legislation daily during the Georgia General Assembly and reports changes to the membership on a regular basis. Collectively, GACS is the respected leader of the Georgia convenience store industry. GACS members advance the success of the convenience store industry through political engagement, knowledge circulation and relevant services.
The annual event included three days of education and networking, starting with a reception and dinner featuring speed painter Tim Decker and ending with Chadd Wilson, trainer/instructor for Georgia Public Safety Training Center, who discussed the legality of CBD.
June 24 included education sessions from Herzog, as well as Greg Wilson, UGA; Brad Rodu, University of Louisville; and Keelan Gallagher, Smoker Friendly. Afterwards, guests could golf, fishing or attend a beach party.
In her session, Herzog spoke about current trends and what’s ahead for the beverage and tobacco industries, as well as information about the c-store channel’s overall growth.
She said the convenience stores are underperforming other channels, and the growth gap between c-stores and other channels remains wide. Growth in the c-store channel has consistently underperformed all other tracked channels over the past two years, suggesting that c-stores are broadly losing share.
This includes several key c-store categories:
- beer-FBM-cider category
- carbonated soft drinks (ex: energy) category
- energy drink (incl. coffee and tea energy drink) category
Reasons for this include declining c-store trips, more fuel-efficient vehicles and small-format hybrids such as Walmart/Kroger Express.
Inside sales decreased as a percentage of total industry sales, from 39% in 2017 to 37% in 2018. However, motor sales as a percentage of total c-store sales are increasing. Motor fuel increased as a percentage of total industry sales, from 61% in 2017 to 63% in 2018, as gas prices continue to tick upward.
Herzog also spoke about consumer preferences.
By 2023, digital and e-commerce could influence up to 40-45% of consumer packages goods (CPG) sales.
Among other topics, she spoke about cannabis and the exciting opportunity it prevents for the convenience industry.