Convenience Channel Fuels CPG Growth

Get a peek at channel growth from last year—and how to recapture those sales this year.

May 13, 2020

ALEXANDRIA, Va.—On this week’s episode of Convenience Matters, “The Convenience Customer,” NACS hosts Jeff Lenard, vice president of strategic industry initiatives, and Carolyn Schnare, director of strategic initiatives, talk with Larry Levin, executive vice president of market and shopper intelligence with IRI, about how convenience stores can be incubators and drivers of growth, as well as the impact of COVID-19 on retail.

The convenience store channel “is to me the most exciting and dynamic channel I’ve seen within the industry. One of the fuels for growth pre-COVID-19 was potentially a change in assortment that we saw [with] better-for-you food and beverage products making their way into the c-store, and I believe that was a catalyst for driving trips,” said Levin, who also was one of the speakers during the virtual NACS State of the Industry Summit. “The c-store channel is up 6.2%, and I think more and more people were going there because they saw the benefits of what the channel had to offer. … Last year, 28% of growth numbers of CPG was through this channel.”

As the country comes out of the COVID-19 environment, Levin asked, “How will this channel rebound? Because in the COVID-19 environment, this channel is not doing as well as other channels because people aren’t driving as much.”

Lenard noted that with essentially one out of five dollars coming out of our channel when it comes to CPG, the potential for growth could be in new CPG products, especially in the better-for-you or healthier options category. “Every year, our team will find enhanced waters and enhanced beverages leading the pack within c-stores,” Levin said.

But Levin thinks it goes beyond current trends. “It’s about having the right assortment in front of the right consumer and thinking about, what do I have to do in an urban footprint c-store or in a rural footprint c-store?” he said. “Understand the consumers coming in and what are the products that are going to fuel their needs. The channel has done a great job in responding to that. … We subscribe to the mantra that it’s not about perfect distribution, it’s being distributed perfectly. … Stores are like snowflakes and each store is a unique snowflake. The consumer coming into a particular retailer may have a unique need that a store three doors down might not have. You have to understand the demographics of your shopper and recognize where to put the right product at the right time.”

Each week a new Convenience Matters episode is released. With more than 200 episodes to choose from, the podcast can be heard on Apple Podcasts, Spotify, Google Play and other podcast apps and YouTube and at Episodes have been downloaded more than 130,000 times by listeners around the world.