C-Stores Emerge As Growth Channel For The Spirits Category

While still a relatively small channel for spirits, c-stores have been top performers of late. “The data highlights a significant consumer trend toward convenience and on-the-go options,” says WSWA executive vice president Michael Bilello. “Pre-mixed cocktails and agave spirits are leading the growth.”

C-stores now account for 12% of off-premise spirits volume sales, according to Nielsen/NIQ, following liquor stores at 57% and food outlets at 21%. “Convenience is a huge channel,” says Clement Pappas, co-founder and CEO of Stateside Brands, marketer of the Surfside RTD portfolio, which roughly quadrupled to 4.7 million cases last year, according to Impact Databank. While spirits in c-stores can face tougher regulations in some states than in other channels, Pappas notes that “more business and consumption has been moving into c-stores. It’s becoming one of the primary channels for beverage alcohol.”

Hannah Venhoff, vice president of marketing strategy at Heaven Hill Brands, adds that while the growth and interest of spirits in c-stores is relatively new, and marketers are still ramping up their efforts, the trend makes sense. “Today’s consumer is on the go. Convenience becomes more important when making purchasing decisions,” she says. “So, it’s not surprising to see growth in this channel, particularly for products like RTDs.”

Pappas credits Surfside’s reliance on beer wholesalers in many markets for the gains the brand has made in c-stores. “Being on beer trucks with a high rate of frequency is our plug-and-play model,” he says, noting that c-stores typically don’t have much storage space and require more frequent deliveries than wine and spirits houses usually provide. For their part, c-store operators are drawn to Surfside because it’s “like beer but with higher rings and higher profits,” the marketer says. Now distributed nationally, Surfside’s key c-store states include Virginia, Florida, Illinois, Arizona, and Nevada.

“C-stores have evolved into the go-to source for discovering the newest, most sought-after beverages,” says Britt West, chief commercial officer at Gallo, marketer of High Noon, which neared 25 million cases last year to lead the U.S. spirits market in volume terms. He points to data from consulting firm Park Street Imports showing that more than 40% of all RTD purchases occur in the c-store channel. C-store shoppers are also loyal and generate massive traffic, adds the Gallo executive, noting, “the average c-store shopper visits three times a week, generating 165 million daily visits.”

In addition to RTDs, small-format spirits packages remain a go-to for c-store shoppers. At Pride Stores, a chain of 17 convenience stores in Illinois, 50-ml. “nips” are the top-selling spirits package, followed by 375-ml. offerings. At stores that feature nips, up to 50 spirits SKUs are available, says director of purchasing Christ Peckat, ranging from Fireball up to single-barrel picks.

Some c-store operators are seeking out more allocated and exclusive products. Casey’s, the mammoth midwestern c-store chain, has teamed up with the Sazerac Co. on several Buffalo Trace special releases. Last year, central Illinois locations offered 375-ml. bottles of the limited Buffalo Trace Single Barrel Select.

C-stores are also upgrading their merchandising tactics for spirits. While value and mid-tier products like Evan Williams and Black Velvet are top performers in the channel, Venhoff says, “we’re seeing some c-stores elevate the experience by utilizing point-of-sale materials that highlight products.” Moreover, the Heaven Hill executive adds, “traditionally small shelf sets for the spirits category are growing in c-stores, providing incremental options for consumers.”

Merchandising efforts can run the gamut from “two-for” promotions for RTD singles, where legal, to in-store sampling. Grub Mart c-stores in Alabama sell spirits at three of their 11 locations, thanks to separate entrances into the licensed spaces, as per state law. Overall, the stores dedicate between 650-1,000 square feet to spirits, says Brian Young, vice president of parent company Young Oil, with Bourbon the top-selling category, and Tequila and RTDs showing the best trends. —Terri Allan

Tagged : c-stores, convenience, Heaven Hill, High Noon, Surfside

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