Market Watch: C-Stores Emerge As A Growing Channel For WineAugust 5, 2022
Grab-and-go packaging, an expanding millennial customer base, and increased focus on quality food service programs are all contributing to the emergence of c-stores as a growth channel for wine, helping to shatter its previous image as a destination for only low-budget and fortified offerings. According to NielsenIQ, wine sales in c-stores increased 2% to $1.5 billion last year, following a 22% surge in 2020 and a 6% gain in 2019. While table wine sales in the channel dropped 3% in 2021, flavored wine, sparkling wine, and wine-based cocktails posted either high single-digit or double-digit growth.
Chad Fisher, vice president at The Wine Group, says that with longer business hours and closer proximity to where consumers live, c-stores are gaining a competitive advantage. “Wine trends in the convenience channel outpaced grocery stores in 2021,” he says. “There’s a lot of optimism that this will continue through 2022.”
C-stores are increasingly investing in wine as a basket builder, Fisher and other marketers note. “Wine builds the total transaction size, while enhancing the shopping experience,” says Herb Smith, vice president of customer development at E.&J. Gallo Winery. “In most cases, the purchase is impulse driven and incremental,” Fisher adds, noting that many national and regional chains are highlighting wine with improved merchandising strategies over those of the past.
In addition to its improved image, the typical shopper in c-stores has changed in recent years. “According to our internal consumer insights, the millennial generation makes up 50% of the c-store consumer base,” Smith says. “They frequently shop for wine and typically shop two times a week. When shopping at c-stores, they’re motivated by three key things—location, ease of shopping, and hours of operation.”
Wine is a key contributor to total sales at Foxtrot, the omni-channel c-store chain with 21 locations currently in Chicago, Dallas, and Washington, D.C., and more units planned. Beverage alcohol accounts for 30% of total sales at Foxtrot, an e-commerce reliant concept, with wine representing two-thirds of that, according to the company’s director of adult beverages Dylan Melvin. “Wine is a strong category for us,” says Melvin.
And at Kum & Go, the Iowa-based, multi-state c-store chain, “wine is performing very well,” says alcohol category manager Christian Rogers. “We’ve seen very strong growth over the last few years,” driven by super-premium wines, wine-based RTDs, and wine packaged in TetraPaks, he explains. Kum & Go sells wine in 275 stores in ten states, typically merchandised in a 3-to-6-foot space, as well as in a cold box dedicated to the category and RTD cocktails. Market Watch has the full story.—Terri AllanSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.