Beverages

C-Store Beer Battlefield

MillerCoors making convenience store channel a priority
CHICAGO -- Convenience stores accounted for more than $14 billion in beer sales in the past year, or more than 30% of overall beer sales, and they are one of the most profitable sectors for the brewers because of the high margins on single bottles and six-packs. That is why MillerCoors CEO Leo Kiely has made c-stores a priority, according to a report by Crain's Chicago Business.

His job is to catch Anheuser-Busch Cos., and he aims to do that, in part, by rolling out a host of new packages and promotions in the coming year aimed at c-stores, and by coaxing distributors [image-nocss] to improve relations with owners, said the report. "We have given [St. Louis-based A-B] free businesswe have to take it away," Kiely told distributors at a conference last month in Chicago.

Doing so will be difficult, the report said. Budweiser gets nearly 60% of all beer sales made in c-stores, compared with 50% of the overall market; MillerCoors' share of c-store sales is less than its 26% share of the overall market, according to data cited by Crain's from Chicago-based Information Resources Inc. (IRI).

There are 145,000 c-stores in the United States, the report said, and unlike grocers, they keep limited inventory, so they require extra service. Competition is heightened by limited shelf space, which means fewer brands per store.

MillerCoors executives said a share point gained in c-stores boosts annual revenue by $100 million.

To increase those sales, Chicago-based MillerCoors plans to roll out more aluminum pint cans with wide mouths and resealable caps aimed at people picking up beer on their way home from work, said the report. The brewer also will promote mini draft-beer systems designed to fit in fridges and last for 30 days after opening, it added.

MillerCoors will run Super Bowl and Nascar promotions with c-stores in the coming year and offer more merchandise, such as Coors Light floor mats that make the sound of crunching ice. Company sales teams also plan to work with distributors on creating individualized plans for packages and promotions that can help MillerCoors gain shelf space at c-stores, Crain's said.

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