The last few years have shown a saturation of innovation and emerging brands in the alcoholic beverage category. The popularity of non-alcoholic beers and cocktails has been steadily rising, and growth in the ready-to-drink (RTD) cocktail segment has yet to taper off. Additionally, beer remains a stable seller for c-stores.
“Hard seltzer has gone through a shakeout over the past 18 months, with signs that the category is beginning to stabilize,” said Brian Sudano, managing partner for Beverage Marketing Corp. “The strength of low-carb/low-calorie offerings in beer, along with spirit- and malt-based seltzers, continues to be on track with consumer trends.”
Top Alcohol Trends
For the 52 weeks ending June 18, beer at convenience stores has seen a 4.9% increase in dollar sales to reach $25 billion and only a 2% decline in case sales, despite a 7% price per case jump, according to Circana, a market research firm.
Beer-centric seltzers, however, dipped by 8.7% in dollar sales and 12.9% in case sales for the same period.
Flavored malt beverages are trending opposite of this with a 20.9% rise in dollar sales and 12.9% uptick in case sales.
“RTD cocktails continue to lead growth in the adult beverage market, with seltzers beginning to show some life, primarily in spirits, but also improving in malt-based (beverages),“ said Sudano.
TravelCenters of America (TA), which operates over 270 locations in 40-plus states, is seeing this consumer shift to canned cocktails, as well as full-flavored malt beverages, although it’s also noticing the pendulum budge further away from seltzers.
At Tiger Fuel Co.’s The Market, which has nine locations in Virginia, seltzers have also “fallen back the past year,” but Nick Rogers, the chain’s retail merchandising manager, recommended making sure White Claw is still readily available to customers.
Sudano has seen hard tea and vodka-based RTDs attract attention in the category.
Although no one particular flavor stands out among adult beverages at TA, “there are various flavors the entire industry gathers around at certain times (i.e Watermelon, Mango, Passion Fruit),” said Adam Chonko, senior category manager — alcohol, tobacco, beverages, store food and sunglasses at TA.
At The Market, “the (alcoholic beverage) category continues to grow overall even with the continued rising costs. Ciders and other flavored beverages are on the rise, and singles are doing really well,” according to Rogers.
Rogers said he believes inflation has impacted how customers shop, and because beer singles have seen huge growth, The Market is looking for opportunities to expand in this area.
For beer, Michelob Ultra sales have picked up at The Market, and Modelo, Corona and Twisted Tea are top sellers.
The chain has not seen much success with non-alcoholic beer, however.
TA’s Chonko, conversely, has noticed a rise in the non-alcoholic segment, particularly in those under age 30. New brands are appearing within non-alcoholic mocktails and beer, according to Sudano, but the segment is still relatively small in comparison to other areas.
In fact, “mocktail variety packs are showing life,” Sudano said, “but (variety packs) overall are no longer driving the alcoholic beverage market.”
At c-stores in general, non-alcoholic beer dollar sales have bumped up by 22.5%, with case sales increasing by 12.9%. These increases are in spite of an 8.6% uptick in price per unit.
RTD Cocktails Outshine Wine
Whereas the demand for RTD cocktails is strong, and beer remains a critical segment, wine has a softer presence in the c-store space.
The segment remained flat (-0.9%) in dollar sales for the 52 weeks ending June 18 at c-stores, while dropping by 5% in case sales with a 4.4% rise in price per case, per Circana.
Specifically, non-alcoholic wines fell by 9.2% in case sales, and sparkling wine case sales decreased by 7.7%. Wine-centric seltzers plummeted by 44.8% in case sales for the same period at c-stores.
“We do sell some wine, but the best-selling items in this category for us are BuzzBallz, Fireball and Stroyski products,” said Rogers. “I think we need to expand our tetra pack and canned wine selections to capture the on-the-go customer similar to single beer.”
At TA, while there is interest in canned wine, canned cocktails outperform them.
