The Economy & Beer Sets
IRI data shows trips to convenience stores for alcohol beverages up 60%
BOSTON -- After a long period of convenience store operators adding new and different products and services to expand their appeal to consumers, Mike Kaskie of Information Resources Inc., Chicago, offered a message about taking a step back in the current economy. “I really think now more than ever you 're bread and butter is tobacco, beer, wine and spirits,” the executive vice president of IRI 's Strategic Solutions Group said during CSP 's recent Import, Specialty & Craft Beer Summit.
“The No. 1 topic my clients want to hear about is the economy,” he said during [image-nocss] the meeting held June 2 and 3 in Boston. “It 's impacting the beer industry in a big way.”
Thus to begin his presentation, Kaskie noted that c-stores experienced a slowdown in sales growth over the past two quarters.
According to IRI data, dollar sales for 33 c-store categories, after peeking at a healthy growth rate of 13.4% in the third quarter of 2007, dropped to 8.2% growth in the fourth quarter and again to 6.3% in the first quarter of 2008. Further, while unit growth hit 5.9% growth in Q3 2007, it plummeted to 1.1% in Q4 and dropped further to -1.9% in the first quarter of this year.
“You can run, but you can 't hide from these numbers,” Kaskie told the crowd of about 40 retailers and suppliers.
But while the number of trips to c-stores to purchase snacks, personal-care products, healthcare products and non-alcohol beverages were down double digits for the 13 weeks ending Feb. 24, 2008, vs. a year ago, trips for tobacco and, especially, beer/wine/spirits were up 5% and 60%, respectively.
And so, Kaskie encouraged retailers not to create plan-o-grams based on the beer industry, but rather, “Think ‘share of mouth '—beer vs. milk; space vs. profit; space vs. volume. That 's how other categories think of you,” he said. “Go after other share-of-mouth liquid categories.”
Retailers in the audience latched onto the concept, often noting that their biggest competition isn 't another retailer, but rather “the guy two doors down the hall from me” who is fighting for space for non-alcohol beverages. “As I try to expand [the beer set], they 're trying to expand too,” said Robert Gulley, senior category manager for BP Products North America, La Palma, Calif.
On the other, for most smaller retailers, the person in charge of the beer set is also in charge of other beverages.
“I plan the whole vault,” said Rick Zamarchi, retail category manager for Tesoro Petroleum Co., Auburn, Wash. “If I don 't have the beer space to stock the days of supply I need, I 'll pull the numbers for the whole cooler. But just as often, the other [beverage] categories need more space, too.”
To read more from CSP 's Import, Specialty & Craft Beer Summit, watch for the August issue of CSP magazine.