By Terri Allan
ALEXANDRIA, Va.—Despite a decline in average convenience store sales last year, the wine category is more sizeable and has grown in consumer and retailer interest in recent years. Indeed, optimism abounds that the c-store channel will continue to develop as a preferred outlet for wine for years to come.
“The two-year trend is still positive,” said Tom McGinty, vice president, business and wholesaler development, at Trinchero Family Estates, marketer of brands including Sutter Home, Ménage à Trois and Bandit, of the category’s performance in c-stores.
Moreover, “it’s important to note that the convenience channel is outpacing other channels for wine category growth,” he added. According to the NACS State of the Industry (SOI) Report of 2021 Data, average monthly c-store sales of wine fell 7.5% to $1,495, from $1,616 in 2020. But last year’s performance followed a hefty 21% increase in the year prior.
“2020 wine sales were an anomaly for convenience retailers,” explained Jayme Gough, NACS research manager, as they benefited from the closure of bars and restaurants in the early months of the pandemic. McGinty agreed and noted that other trade channels also saw declines in 2021 for the same reason. As a result of last year’s performance, wine’s share of in-store sales fell to 0.53% from 0.58% in 2020. Margins, however, remained healthy at 31.99%, Gough noted, leading to $478 in gross profit dollars per store, per month. Through early September of this year, convenience store wine trends improved versus the year-ago period, McGinty reported, driven by nontraditional package types.
C-store operators are increasingly being drawn to the category in markets where they can sell wine. According to the 2021 SOI report, 68.1% of c-stores carried wine, up from 54.3% in 2020, marking the fourth consecutive year of growth. Bill Meissner, president of Splash Beverage, a marketer of single-serve wine brands like Copa di Vino and Pulpoloco sangria, attributes the heightened interest to macroeconomic and trade-development trends. After the pandemic lockdown, “consumers were buying more gas and making purchases for on-the-go and outside-of-home consumption,” he remarked. “Simultaneously, beer wholesalers servicing c-stores started to bring more wine products into their portfolios,” Meissner added, including single-serve options.
McGinty concurred that distributor, as well as supplier, interest in servicing the c-store channel is on the rise. “Many suppliers and distributors are building the convenience channel into their long-term growth plans,” he said. “Consumers are looking to the convenience channel for wine and other product categories that they perhaps didn’t associate with convenience before the pandemic.”
Read more on how wine is blurring category lines and ways to effectively sell the product to customers in this month’s Category Close Up column in NACS Magazine.
Terri Allan is a New Jersey-based freelance writer, specializing in the beverage industry. She can be reached at [email protected] and on Twitter @terriallan.