The arrival of the COVID-19 pandemic in March altered plans and beverage resets and impacted sales at convenience stores — for better or worse, depending on a store’s location.
“As COVID-19 began to restrict, or entirely eliminate, daily routines, convenience sales and trips declined,” said Greg Doonan, communications manager of Nielsen. “Within the beverage space, sales shifted from single-pack — or smaller-pack — offerings to larger package sizes as consumers stocked their pantries.”
At convenience stores, total beverages dollar sales dipped 4.3% compared to the same period a year ago for the 23 weeks ending June 6, 2020, according to Nielsen’s Total U.S. Convenience measurement. Energy drinks and bottled water saw the largest declines.
Total beverages account for about 20% of Nielsen-tracked convenience store retail (UPC-coded) dollar sales, explained Doonan. Energy drinks account for more than 30% of those beverage dollar sales, while water accounts for 6.7%, sports drinks just over 9%, ready-to-drink (RTD) coffee just over 4%, and kombucha and club soda both less than 1% of dollar sales.
Sports drinks, kombucha and club soda comprise the ‘Top 3’ growth drivers in c-store beverages — contributing the largest numbers of dollars vs. the same time period a year ago, according to Nielsen.
Compared to the same period a year ago, RTD coffee dipped 1.3% at c-stores, but despite total RTD coffee declines, cold-brew coffee offerings were up 49.1% and account for more than 10% of total RTD coffee dollar sales, Doonan said.
COVID Changes the Game
At Idaho Falls, Idaho-based Good 2 Go Stores, with 62 c-stores in Idaho, New Mexico, Wyoming, Colorado, Utah and Montana, Beverage Category Manager Waldo Wallace saw a major difference in beverage sales from state to state as regions responded differently to the COVID-19 pandemic.
Overall, being an essential business during a pandemic has resulted in increased traffic to the stores. “Our sales are fantastic,” he said.
In New Mexico, in April, when the state shut down due to COVID-19, Good 2 Go saw a big rush on 24-packs of water, but the surge slowed after the first three weeks. “We’re a c-store, so of course we’re going to be open, but they shut down all the liquor stores and nonessential businesses,” Wallace said. “We have four stores down there that also sell beer, wine and spirits. Their water sales were up. Their CSDs (carbonated soft drinks) were up. Their whole beverage category was just going up through the roof.”
Other Good 2 Go locations in New Mexico without alcohol sales were still trending up, but not as high as the other four.
In Arizona, sales remained steady, with a slight bump despite some supply issues from a couple of the large brands; and in Wyoming, which is a big tourist destination, beverage sales were a little slower than usual. Meanwhile, “up here in Idaho, sales were just phenomenal. We sold a ton of Gatorade, Powerade. We were selling a lot of water. CSDs were so-so due to out-of-stocks (due to supply chain issues),” Wallace said.
In 2020, Yesway has reduced the size of innovation in its sets, focusing on the innovation items that fit its consumer needs and profiles in both the Yesway and Allsup’s sets. “It has been very successful so far this year,” noted Dana Renfro, category manager for West Des Moines, Iowa-based Yesway, which operates more than 450 locations in nine states. “It has also allowed us to focus on the categories that are trending and showing growth, while remaining true to our current consumers and fulfilling their needs.”
Premium enhanced water, functional energy, and CBD/Hemp are the three categories that stand out when it comes to growing trends in the beverage category.
“Consumers are wanting to get some sort of health benefit out of what they are drinking,” Renfro said. “Most consumers are not as focused on price alone. Instead, they are more focused on value, and the benefits the beverage can bring to them and the environment.”
That value, Renfro noted, is a key driver, which Yesway delivers through a broad assortment, loyalty offers and promotions. Innovation is also crucial, “but with that being said, you have to focus on the right innovation for your market.”
Yesway sees both cold-brew coffee and kombucha doing well in the cold vault.
“They are great offerings for the segment of consumers who are looking for that new, better-for-you item, that is very trendy in the beverage category,” Renfro said.
Good 2 Go tested kombucha before it peaked but didn’t find success with it in the markets it serves. “I think, for our stores in our area, it’s probably pricing itself out of the market. … It’s hard at a c-store to get a $5 ring on a kombucha,” Wallace said.
Due to COVID-19, resets remain on hold at the stores, Wallace explained, “so we do have cold brew in the sets, but not currently in all of our stores.”
The chain has been seeing average sales on cold brew, but it’s selling better than some other RTD coffee products in the cold vault.
Good 2 Go recently added a product called Liquid Death, which has piqued customer interest. What is Liquid Death, you ask? It’s water. Customers can select the sparkling water or mountain water variety. “I think the packaging is what’s driving the sales,” Wallace said. “I’m seeing it over in Wyoming. I’m doing pretty good with the product, and we brought it in maybe three weeks ago. We’re selling about a case to a case and a half per week per store.”
“Packaged beverages continue to be a strong consumer destination,” Renfro said. “Partnering with the key suppliers is a great way to better understand consumer insights and ensure you align your assortment to meet their ever-changing needs.” CSD