Newsletter - March 2018
The “Next Big Thing” For Liquor
REGULATORY AND DEMOGRAPHIC SHIFTS SIGNAL AN OPPORTUNITY FOR LIQUOR SALES IN C-STORES
In certain regions of the US, regulatory changes are prompting increased foot traffic as consumers are now able to buy more types of alcoholic beverages in the convenience channel. To support that trend, data from the market research company, IRI, found that sales of table wine (+7.1% case sales growth), sparkling wine (+13.4%), and spirits (+15.9%) all saw significant growth in the c-store channel alone.
Convenience stores are already well established as locations where alcohol is available for purchase. C-stores alone sold $16.7 billion in beer, or 59% of all beer sold in retail channels (food, mass merchandise, drug and convenience), according to the NACS State of the Industry Report of 2014 Data. Unlike grocery and drugstores, conveniences stores have the advantages of being (1) open longer hours, (2) stocking top sellers and (3) storing the products in cold environments (e.g., beer caves). Indeed, convenience-store operators around the country are becoming more aggressive in the fight for market share of alcoholic products.
To capitalize on the potential growth in this segment, global distillery companies like Brown-Forman Corp., have added dedicated leadership and investment in data, insights, resources and tools to help drive spirit sales in the c-store channel.
According to Brown-Forman’s research, “Spirits as an adult beverage rank higher with legal-purchase-age Millennials than with Gen X, Boomers or the Silent generation.” And although demographics vary from market to market, Millennials are among the most frequent visitors to convenience stores. The research went on to state: “For Millennials and their key spirit consumption occasions, the c-store channel fits the bill as a destination.”
Distiller Beam Suntory also reports that while nearly all distilled spirits segments are showing growth in convenience stores, “whiskey is the strongest driver,” gaining at an 11% rate, and stealing share from other segments. Sales of tequila increased 10% last year, while vodka sales rose 5%.
Emerging demographical groups provide good opportunity for continued growth of spirits, marketers say, and convenience stores are positioned as an ideal channel. Matt Deegan, Senior Vice President of Sales of Constellation Brands remarked, “Millennials have money to spend, and spirits are a strong preference.”