Craft beer has seen explosive growth in the past few years.
According to the Brewer’s Association, retail dollar sales of craft beer increased 7% in 2018, up to $27.6 billion, and now account for more than 24% of the $114.2 billion U.S. beer market.
To keep up with the trend, c-stores are not only stocking local beers, but are delving into the category further with proprietary offers.
Kim Jenks, category manager of alcohol beverages and tobacco for La Crosse, Wis.-based Kwik Trip, said the company had discussed private-label beer for years, but there was some hesitation.
“All the research we have done shows, historically, private-label beers have not been overwhelmingly successful,” she said. “Although, if you look at limited-release beers, especially from localized craft breweries, they are very popular. People will drive hundreds of miles to a limited-release party at a craft brewery.”
Kwik Trip, which operates more than 600 stores in Wisconsin, Minnesota and Iowa, decided to partner with a local craft brewery to offer a limited-release beer of its own at its Wisconsin stores.
Kwik Trip chose Madison, Wis.-based Karben4 Brewing for its full distribution coverage of Wisconsin, eye-catching packaging and, most importantly, great beer. In a flooded craft market, Jenks said, Karben4 was one of the established craft breweries that was still showing growth in Kwik Trip’s stores.
The result was Glazer Bean — a chocolate coffee stout made with Kwik Trip’s Karuba Dark Roast coffee.
“The reaction has been more than we could have imagined, and the beer has sold very quickly,” said Jenks.
In fact, Jenks said Kwik Trip underestimated just how quickly it would sell and ultimately produced a second — and final — batch, released just before Christmas.
Glazer Bean is now officially retired. But it could be the first of many for Kwik Trip.
“Additional beer collaborations were contingent on the success of Glazer Bean,” said Jenks. “At this time, we believe we will more than likely move forward with another beer based on the reaction we received from our guests with Glazer Bean.”
Not only does The PRIDE Stores operate its own restaurant and liquor store, the company now operates its own brewery, too.
“We have always had a passion for craft beer at The PRIDE Stores and strived to have a strong offer of local craft beers at all our locations that have a liquor license,” said The PRIDE Stores Owner and CEO Mario Spina. “Brewing our own craft beer was a great way to add to our selection, plus differentiate ourselves from others in the marketplace.”
93 Octane Brewery is located next to The PRIDE Stores’ St. Charles, Ill., location, in a mixed-use building that also houses its Urban Counter restaurant and its liquor store, The PRIDE Beer & Wine Plus Spirits.
In total, there are 24 tap handles — 12 in the brewery, four in the restaurant and eight in the liquor store so customers can purchase a growler or a pint while they shop.
The PRIDE Stores offers a variety of adult beverage options in addition to craft beer.
“For wine, we strive to have a great selection at every price point,” said Spina. “At our stores, we offer wine up to $60 per bottle. At our liquor store, we go up to $240.”
Many of his stores also carry a selection of local spirits.
Jenks said Kwik Trip offers beer in almost all of its stores and wine and spirits in about 300 of its 700 stores, all contingent on local laws and ordinances.
Younger generations, she said, aren’t loyal to any style or brand. They’ll choose a drink based on the occasion.
Overall, Jenks said seltzers, better-for-you (BFY) beverages and ready-to-drink (RTD) cocktails are all trending.
“You need to be able to offer all these segments to be able to capture that drinker and keep them coming back to your stores,” she said. “They also want whatever is new, so you need to be fluid and first to market as quickly as possible.”
At The PRIDE Stores, Spina said New England IPAs (NEIPA) and seltzers are top sellers.
“NEIPAs have many subcategories, but they are fueled by local craft (brewers) experimenting with flavors,” he said. “A couple years ago, we would have never thought a Cherry Shake or Orangesicle beer would fly off the shelves, but they do.”
Another recent trend, according to Nielsen: Younger generations are drinking less. Sixty-six percent of millennials said they’re making efforts to reduce their alcohol consumption.
At retail, non-alcoholic beverages are worth $7 billion more than just four years ago. In the last year alone, retail sales of non-alcoholic beverages have posted sales growth of $1.1 billion.
But Spina said his alcohol sales have been strong.
“In the future, we will continue to monitor the current trends, but we don’t see these items slowing down,” he said. “People are spending more money on alcohol than they ever have, with a focus on higher-quality, locally made products.”