Spurred by pandemic lifestyle changes, more Americans are drinking increasing amounts of beer and wine.
The flip side, however, is that customers have come to expect a high level of convenience in terms of online ordering and delivery options that c-store operators may consider integrating as competition grows.
The convenience store channel saw sales of beer reach $24.2 billion, a 2% gain, for the 52 weeks ending Dec. 26, 2021, per IRI. Leading brands were Bud Light, Modelo Especial, Michelob Ultra, Corona Extra, Coors Light, Budweiser, Miller Lite, Busch Light, Natural Light and Heineken. Of those, the greatest gain for the period belonged to Modelo Especial, whose sales grew by 16.1% to just over $2 billion.
For the same period, sales of wine totaled $1.1 billion, up 1%, according to IRI. Leading brands included Sutter Home, with just over $147 million in sales, a year-to-year gain of 6.3%, and Barefoot, with sales of nearly $121 million, down 8.4%.
Quality is a top consideration for consumers in 2022 when it comes to beer and wine sales.
Some 26% of U.S. customers claim a high level of spending on wine either because they purchase it in large portions or because they opt for high-end, premium brands, according to Ethan Elliott Maddison, a beverage specialist with GlobalData. With beer, 33% reported the same.
Meanwhile, one in five (19%) consumers said they often purchase alcoholic beverages in convenience stores.
“Perhaps unsurprisingly, sales are driven by the convenience of these stores, which are often open during later hours and at closer proximity to homes than large supermarkets, allowing people to ‘pop’ out for a bottle of wine or case of beer,” Maddison noted. “For this reason, most convenience stores are able to charge more for these products compared to hypermarkets and online.”
Given the growth of online shopping, companies like Drizly and Uber Eats, and the emerging trend of quick-commerce, more Americans are coming to expect doorstop delivery within 60 minutes of ordering. This trend is predicted to grow as more players enter the market.
“Beer is definitely a category in transition,” said veteran convenience store retailer Amer Hawatmeh, the longtime president of St. Louis-based St. George Oil. Hawatmeh divested his 52 Coast to Coast c-stores, moved operations to California and introduced his Coast to Coast Bodega concept in Santa Clarita.
He noted the beer market has shifted, with an increased interest in craft beer.
“People are willing to pay for quality,” he said. “You give them something unique and hip, and they will pay for it.”
As for wine, Hawatmeh said, c-stores need to make room in 2022.
“I always said (wine) is something retailers should be getting into,” Hawatmeh said. “Get rid of the wasted square footage in your stores, and bring in the Barefoot (brand) and the two-for-$14 pricing.”