A year unlike any other, 2020 was a lot of things. In spite of its challenges, for the convenience segment 2020 was a year of growth, partially driven by the shift from on-premise to off-premise beverage alcohol consumption, and hard seltzer played a big role.
With bars and restaurants shuttered for so much of the year (or doing takeout only business), legal drinking age (LDA) consumers were forced to look elsewhere when buying their alcohol. In many cases, convenience stores stepped in to fill the void.
Last year alcohol was actually up in dollar sales at c-stores by 14.8%, and in unit sales by 6.5%, according to data from IRI.
Between the explosive rise in hard seltzer and local restaurant and bar closures, the drinks industry is rapidly changing. Spirits brands that have taken a hit due to lack of on-premise sales have been scrambling to release ready-to-drink (RTD) canned cocktails in order to recoup lost bar sales.
As a result, spiked and sparkling drink options continue to rise exponentially and brands have had to compete for shelf space in convenience stores.
“COVID-19 has shifted consumption moments and behaviors with a rise in occasions related to relaxing at home, in-house socializing and meals,” said Sara Hillstrom, senior director of category development for Anheuser-Busch.
“This shift has taken many occasions once enjoyed at restaurants and bars back into the home, bringing in new and increased light buyers to the package-beverage category and driving significant growth across beer, wine and spirits alike,” Hillstrom noted.
Hard Seltzer News had the pleasure of speaking with Hillstrom
last fall about the changes she saw in the industry as a result of pandemic closures. As the vast majority of cold vault sales are beer, she thinks store owners may consider expanding its real estate to accommodate the booming segment.
Hillstrom pointed out that the next two biggest categories are half the size of beer. Sodas and energy drinks yield convenience stores less than half the sales of beer. While sodas yield stores around $9 billion annually and energy drinks $10 billion, beer is bringing in a whopping $22 billion per year.
“[W]hen c-store operators are looking for space for seltzers, I think it’s worth at least considering increasing space for beer and alcohol,” she told HSN. “Bottom line, is that it really could make sense to add a door for beer.”
Low calorie, flavor forward premium beverages are also driving growth in this space as demand for healthier hard beverages continues to grow. Hard seltzer brands with better-for-you profiles in particular are thriving, with their low calorie count and low sugar and carb counts.
Big brands like White Claw, Truly, and even A-B’s Natural Light hard seltzers have all experienced triple digit growth in convenience stores. As temperatures continue to rise and it is comfortable to once again gather outdoors, expect these trends to continue.
Hard seltzer (and RTDs) are easily transportable and recyclable, making them the ideal drinks for safe, social distant gatherings.
They are a convenient beverage, appropriately available at your local convenience store.
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