By Terri Allan
ALEXANDRIA, Va.—While labor, supply and fuel concerns abound for convenience store operators, the cold vault has been a saving grace. Packaged beverages, specifically, are firing on all cylinders and serve as a key profit center and trip driver for retailers.
“It’s been a great recovery,” said Jayme Gough, NACS research manager, of packaged beverages’ performance last year. Following subdued trends for much of 2020, conditions began to shift on a monthly basis starting in March 2021, she reported, “and continued throughout the year.” As a result, average store sales of packaged beverages jumped higher than in 2020, as well as 2019 and 2018.
“Trips came back a little bit last year,” Gough explained of the improvement, “although they’re still not back to 2019 levels. And all subcategories registered increases in average store sales and gross profits, although some performances were better than others.”
Indeed, Reilly Robinson Musser, vice president of marketing and merchandising at Robinson Oil Corp., reported that package beverage sales are up 15% at the company’s Rotten Robbie stores in California. “All categories are up for us,” she said, with energy drinks, carbonated soft drinks and bottled waters as top performers.
According to the NACS State of the Industry Report of 2021 Data, packaged beverage sales surged 14.4% year over year to $33,683 per store, per month, from $29,439. That followed just small gains for the category in both 2020 and 2019. And the category continues to be a profitable one for retailers.
“Packaged beverages are the most profitable of all categories for c-stores,” Gough remarked, accounting for 23.3% of inside gross margin contribution last year. “A lot of in-store profit comes from packaged beverages,” Gough said. Heat map data from PDI Insights Cloud indicated that 7 a.m. is the busiest time for packaged beverage sales in c-stores. “That’s when people come in for their caffeine,” Gough explained, “whether it’s energy drinks, RTD coffee drinks or CSDs.”
Read more on how packaged beverages did in 2021 in this month’s Category Close Up column “Beverage Boom” in the digital issue of NACS Magazine.
Terri Allan is a New Jersey based freelance writer, specializing in the beverage industry. She can be reached at firstname.lastname@example.org and on Twitter @terriallan.