SOI: 2017 Beverage Sales Hint at Opportunities for C-Stores
By Steve Holtz on Apr. 19, 2018ROSEMONT, Ill. -- Both beer and nonalcohol packaged beverages saw their in-store contribution to total store sales and total gross profit dollars improve in 2017, according to preliminary NACS State of the Industry (SOI) data unveiled at the SOI Summit.
Nonalcohol beverages accounted for 15.8% of in-store sales and 20.1% of gross-profit dollars in 2017, according to NACS data sourced from CSX. That compares to 15.0% and 18.5%, respectively, the previous year.
Beer accounted for 8.5% of in-store sales and 5.5% of gross-profit dollars, compared to 6.7% and 3.7% in 2016.
"We have a very good base on both food and beverages," said Alan Beach (above), senior vice president of merchandising for 7-Eleven Inc., Irving, Texas, during the April conference in Rosemont, Ill. "And both [categories] provide a better profit that the total store."
Here's a look at how convenience-store packaged-beverage sales played out in 2017 ...
In terms of percentage, the nonalcohol packaged-beverage category drove the third most dollar sales (behind tobacco and foodservice) in 2017 and the second most gross-profit dollars (behind only foodservice).
Based on dollars per store per month, nonalcohol beverages were No. 2 in sales ($25,544) but tops in gross-profit ($11,230) thanks to a healthy 44% gross-margin percentage. Meanwhile, beer ranked third in both measures.
Both categories were generally flat in terms of year-over-year sales growth, with nonalcohol up only 0.4% and beer increasing 1.1%, according to the preliminary data.
Carbonated soft drinks continue to lead the nonalcohol-beverage category in terms of monthly sales, with an average $7,566, but alternative beverages (energy drinks) lead in terms of monthly gross-profit dollars. Bottled water, meanwhile, is strongest in terms of gross-margin percentage, at more than 55%.
Beach cited the continued drop in premium-beer sales, once the bread and butter of the category for c-stores. While the premium segment still accounts for more than 45% of sales contribution to the category, Beach said it's time to start embracing the growth in imported, superpremium and micro (craft) beer sales.
“Premium is still slipping, and more promotions are not going to reverse that trend,” he said. “We need to go where the consumer is going.”
C-stores that sell beer take in $7,758 per month from premium beers and $2,848 from imported beers. Micro (or craft) beers provide a healthy 25% gross-margin percentage but still draw less than $1,000 in sales per month.
Wine—part of the “next 10 merchandise categories”—was one of the better stories of the year, growing 5.0% in sales per store per month to an average $1,518, an opportunity for c-stores, according to Beach.
“Wine consumption has grown for 25 straight years, and our industry is very underdeveloped [in wine],” he said. “I am not talking about the cheap stuff. It’s the premium segment that’s growing, and we can get our fair share if we jump on this.”