After a tremendous sales year in 2020, beer sales came back down to earth in 2021 as customers returned to life as usual.
According to NielsenIQ Total U.S. Convenience data, total beer sales for the 52 weeks ending Nov. 20, 2021, decreased by 3.6% totaling $19 billion. One year earlier, for the 52 weeks ending Nov. 21, 2020, beer sales had increased by 8.7%.
The 2020 increase was likely due to pandemic and quarantine restrictions, resulting in customers stockpiling cases of beer while they remained indoors. Now that restrictions have been lifted for the most part, the industry is seeing comparatively modest sales numbers heading into 2022.
The Craft Question
As retailers strategize ways to boost beer category sales in 2022, along with maintaining popular flavors, many are looking to their craft beer section, where local and limited-time flavors offer opportunities for growth.
For the 52 weeks ending Nov. 20, 2021, craft beer sales dipped by 2%, totaling $1.4 billion, which is in sharp contrast to the previous year, in which craft beer sales soared by 17.5% for the 52 weeks ending Nov. 21, 2020, per Nielsen. Supply chain issues are one factor impacting sales, and some retailers were left scrambling to fill holes with whatever they could keep in stock. Looking ahead, some retailers are overhauling their craft sets for the new year.
“We are really looking to expand our craft beer selections at certain locations for 2022,” said Lacey Dixon, marketing director of Go Time, which operates seven locations — five with beer caves — in Kentucky. “For 2022, we plan to revamp our beer cave sets and really focus on what moves best at each location. We are also looking to include more sale specials on beer — for example, offering more ‘two-for’ deals on single cans and special prices on packaged beer.”
What’s selling best varies greatly by region. For example, Go Time is seeing an increase in single bottle sells and fewer customers purchasing packs of craft beer. Conversely, sales on packs of craft beer have risen for Warrenville, Ill.-based The PRIDE Stores, which operates 15 c-stores in the Chicagoland area, as well as a brewery, 93 Octane.
“In 2020-2021 we saw an exponential boom in 12-packs, and we immediately altered our set to accommodate these larger packages and welcomed the craft breweries that were embracing the needed change,” said Chris Peckat, head buyer for The PRIDE Stores.
Overall, he said, craft beer sales increased in 2021, but not at the same rate as other segments like craft cocktails.
“We also noticed customers are looking for value craft beer and the harder-to-find items, while turning away from some everyday mid-priced items,” said Peckat.
The PRIDE Stores is able to respond to customers’ wants by altering its beer sets — sometimes with a day’s or week’s notice, often using products from new breweries to accommodate those needs.
Not only are craft beer tastes changing, but the craft customer is evolving, too.
“We found the age of the craft (drinker) isn’t just the 21-35-year-old anymore. All ages are trying new items, from the next seltzer to the newest brewery — it really makes this aspect of our business fun,” Peckat added.
Go Time sees a generational difference when it comes to beer demand. Dixon noted that the younger generations are purchasing more craft beers — both single bottle products and packs.
“In our locations, the older generation seems to stick more with packaged Budweiser products and Miller Lite,” Dixon continued.
Seltzers Are Sizzling
Hard seltzers proved the star of the beer segment in 2021, with dollar sales totaling $1.8 billion, up 26.5% for the 52 weeks ending Nov. 20, 2021, per Nielsen. Despite hard seltzer’s strong performance, it was a far cry from its success in 2020, when hard seltzer sales surged by 255.6%. This year’s increase on top of 2020’s boom is most likely due to an influx of seltzer brands, flavors and packages.
Go Time is one of the c-stores that has seen an increase in hard seltzer sales in 2021 at all locations, though not all at the same rate. “Performance for this product varies by location. Some stores do really well with them, and some do not,” said Dixon.
The Future of Non-Alcoholic Beer
Perhaps due to healthier lifestyle trends that have been emerging, low- and non-alcoholic beer sales increased by 23%, totaling $31 million for the 52-week period, following 2020’s upswing, which saw a 63.9% boost and a sales total of $25.6 million.
The PRIDE Stores doesn’t currently carry non-alcoholic beers, but it does cater to this trend toward non-alcoholic options through the craft sodas it makes in-house, which are available at more than half of its locations on draft.
Go Time is looking to expand into the non-alcoholic beer segment in 2022, Dixon said.
The non-alcoholic beer trend is expected to continue as more customers participate in Dry January, where they kick off the year in a healthy way by abstaining from alcoholic beverages. Customers are also alternating between alcoholic beverages and non-alcoholic beverages during a single drinking session.
Major beer manufacturers have responded with non-alcoholic beer varieties to meet this demand. The growing segment offers an opportunity for convenience stores in 2022.