By Terri Allan

ALEXANDRIA, Va.—While the buying frenzy that drove impressive gains for beer sales at the height of the pandemic has abated, the category is still eking out growth in convenience stores. Retailers and marketers say that beer remains a key traffic and profit driver for the channel. With the right offerings and proper merchandising support, the category provides long-term opportunity for sustainable growth and store profit contributions.

“Although growth for beer in 2022 may have been slight, it’s still positive news,” remarked Jayme Gough, NACS research manager. “Sales continue to hover around the 2020 mark, which was a big growth year for the category.” Indeed, according to monthly CSX data, sales for beer in the first half of 2022 mirrored sales in 2021, but from June to December, monthly sales increased, yielding a slight gain in category dollar sales for the year.

Inflation, however, has robbed beer unit sales of some of their momentum. “The increased cost of goods for all suppliers has impacted pricing throughout the three-tier system,” said Steve Gee, vice president of national accounts at Canarchy, parent company of craft breweries Oskar Blues and Cigar City. The average price of a case of beer is 8% higher than a year ago, he explained, and consumer pushback has kept volume relatively flat.

Greg Merlo, vice president of category leadership at Anheuser-Busch, added that the inflationary environment has prompted flat trips and units per trip for beer in c-stores, while spending is up. Due to the higher prices, the premiumization that has defined the beer category in recent years has slowed, resulting in some trade down to the value and mainstream segments, along with shifts to smaller packages, including singles. “This is a trend we expect to continue throughout 2023,” Merlo said.

Convenience retailers note that while inflation is making its mark on beer, shoppers have largely accepted the price hikes. “People expect it,” remarked Jason Grimm, category manager, packaged beverages at Wesco Inc. in Michigan. Year-to-date sales through March were flat on a volume basis but dollar sales were up at a mid-single-digit rate at Wesco. Similarly, at Cummings’ Market in Kennebunk, Maine, “Prices have crept up, but people are still buying,” reported manager Ben Blouin. He’s hoping that beer volume at the store finishes the year at least level with last year, with dollar sales higher. While the pace of rising inflation has slowed a bit, Gough said that if it rises again, consumers “could reach their breaking point and trade down.”

Read the rest of “Traffic Building Brews” in the June issue of NACS Magazine.

Terri Allan is a New Jersey-based freelance writer. She can be reached at terri4beer@aol.com and on Twitter at @terriallan.