C-store Retailers Get Creative to Build a Better Beer Identity
NATIONAL REPORT — For some convenience store retailers, the beer and malt beverages section of the cold vault is a set-it-and-forget-it area of the store that only requires them to stock the most popular brands in order get sales they deem good enough.
Savvy c-store operators, however, are taking steps to leverage the channel's advantages and set themselves apart in the category, going from good enough to great.
[Read more: Alcoholic Beverage Trends Undergo Culture Shift]
When it comes to alcoholic beverage sales, size matters. With the exception of the very biggest store formats, c-store retailers are limited in the number of alcoholic beverage types and brands they can stock in their cold vault. Compared to a supermarket that can sell beer or an alcoholic beverage specialty store, it's unlikely a c-store can match up in SKU count — but even consumers who love sampling new brews value the ability to make a quick trip some days.
"Convenience stores are just that: convenient. Instead of walking all the way to the alcohol aisle in a grocery store and waiting in a long line to check out or heading to the liquor store where the items sold are very niche, you can have all your needs met at c-stores. Especially if you're on the way to an event, heading to the lake or simply just need to make a quick stop," said Kevin Smartt, CEO of Spicewood, Texas-based Texas Born (TXB) convenience stores.
During the COVID-19 pandemic, consumers embraced alternative alcohol-purchase methods, but shopping habits are changing again in a post-pandemic world. The Uber-owned Drizly delivery service saw sales jump around 350% in 2020, yet ceased operations as an independent app in March.
Leaning Into Strengths
The packaged alcoholic beverage market is expanding with ready-to-drink (RTD) cocktails, seasonal brews and nonalcoholic beers generating buzz. C-store retailers have an opportunity to establish themselves in customers' minds as the destination for alcoholic beverage purchases.
To seize this opportunity, convenience stores that sell beer and malt beverages should focus on what they can do better than competing retailers.
For Ankeny, Iowa-based Casey's General Stores Inc., this meant creating a brand-new role at the company: Chief Pizza & Beer Officer. Last fall, the retailer trademarked itself as The Official Pizza and Beer Headquarters.
"We take a lot of pride in that," said Tom Brennan, chief merchandising officer at Casey's, which operates more than 2,500 c-stores.
He noted that the role was inspired by discussions among the Casey's team on how to spread the word and engage the chain's guest base on the "best combination ever" of its proprietary, handmade pizza and variety of beer for sale.
The hiring campaign, which drew 500 candidates and resulted in the selection of Joe Cruz from Lincoln, Neb., generated plenty of buzz, but wasn't just a marketing stunt. Cruz will contribute to initiatives that drive trial and boost sales of both alcoholic beverages and foodservice.
"One of the key tasks that we're challenging our pizza & beer officer with is coming up with some recommended pairings, perhaps ones that maybe people haven't considered," Brennan said. "Maybe they'll discover something new in terms of what they like."
While not all c-store chains have Casey's 17-state reach, operators should consider what unique strengths they can bring to the table in terms of alcohol offerings. For Pennsylvania-based chains Rutter's and Sheetz Inc., such efforts have included extending their private label offerings. In recent years, both chains have teamed up with regional brewers to create their own limited-edition beers: Rutter's Chocolate Milk Stout, made with Lancaster Brewing Co., and Sheetz's Project Happy Holeidayz, a deep golden pale ale made by Asheville, N.C.-based Wicked Weed Brewing Co. using the retailer's Shweetz Glazed Vanilla Donut Holes.
Casey's also has teamed up with Buffalo Trace Distillery on a limited-time offer. Buffalo Trace Single Barrel Select Bourbon returned for the third year in 2024 at 73 locations.
What's Trending in 2024
Along with building up their assortment and reputation, it is vital that c-stores keep up with the latest product trends. Two years ago, the hard seltzer segment was heating up. Today, seltzer sales are slumping, a change driven in part by the rise of RTD cocktails. There's also been renewed interest in light lager, which competes closely with hard seltzer, according to category research from Drizly and BevAlc Insights.
"We are seeing a shift from low-calorie to more full-flavored, higher-sugar malt beverages," said TXB's Smartt, noting that the chain's overall alcoholic beverage sales are trending up.
It's also worth making space for craft beer alongside the popular national brands. While its once-meteoric growth began to slow as the segment matured and microbreweries jockeyed for space on crowded shelves, retailers say they still see good results from craft beer.
"Craft is still growing for us year after year. We typically see better craft sales in higher-income areas and markets closer to larger cities. Space for the different segments is determined by sales per location," Smartt said. "Being spread out across Texas and southern Oklahoma, we have a pretty diverse customer base, dictating how we market and allocate space for beer and wine."
Numerous market researchers predict that local will be a significant trend in 2024, particularly among the younger generations who care about sustainability in their communities and jump on the chance to sample new offerings. C-stores that establish themselves as a source for variety in beer and other alcoholic beverages can give these consumers a reason to make return visits.
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