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.”
Many suppliers and distributors are building the convenience channel into their long-term growth plans.”
Nontraditional wine packaging—particularly single-serve variants—has been a key contributor to wine’s momentum in c-stores in recent years. “Wine cans have made for an attractive selling point in convenience,” said Gough, adding that boxed wine has shed its stigma of being low quality and is gaining traction. “It’s popular for transportation purposes, as well as being perceived as environmentally friendly, since it’s often a recyclable package, similar to many Tetra Paks.”
Splash Beverage’s Copa di Vino—re-sealable single-serve glasses of wine— and Pulpoloco—sangria packaged in innovative CartoCans or paper cans—have made inroads in c-stores. The former brand recently expanded into Circle K’s western division stores, while the latter has been rolled out to one-third of 7-Eleven’s U.S. locations. Meissner reported that response from c-store retailers “has been outstanding among those that want to attract more than just the beer consumer to their beverage alcohol sets.” The brands’ convenient packaging is “a perfect fit for on-the-go customers or those wanting to pair a food or snack with something other than beer.” A custom seven-shelf rack is used to merchandise Copa di Vino at Circle K, while under-shelf roller racks for both products can be utilized in the cold box, Meissner said.
McGinty believes that while it’s likely new competitors will emerge with alternative wine packages, the innovation bodes well for the overall wine category long term. “Today’s innovation opens the door for the convenience channel to also win with traditional wine varietals,” he said, “as shoppers increasingly convert their wine purchase occasions from other channels to convenience.”
BLURRING THE LINES
Table wine remains the largest subcategory for wine, accounting for 39.7% of category sales in 2021, according to SOI data. “Other wine,” which includes sangria and new wine innovation, is next at 25.8%. Wine-based coolers and cocktails, including seltzers, meanwhile, are blurring subcategory lines and now represent 17.7% of wine sales in c-stores. According to CSX monthly data, wine coolers and cocktails outperformed all other wine subcategories during the first quarter of 2022. And the space is likely to get more active with the recent introduction of Woodbridge Wine Soda in cans from Constellation Brands.
At Barrels & Vines Shell, a c-store with an emphasis on alcoholic beverages in Royal Oak, Michigan, the best-performing wine subcategories and varietals are cabernet sauvignon and prosecco, owner Ken Lucia said. “Sauvignon blanc and rosé, which used to be just summertime wines, sell all year long now,” he added.
Lucia, along with other retailers and suppliers, noted that today’s c-store wine shopper generally skews younger than in the past. “Wine is performing better than most categories in our store,” he reported. “We’re selling more wine than ever as younger consumers who started drinking craft beer, then moved to hard seltzers, have discovered wine.”
Minit Mart East in Holland, Michigan, also attracts a younger (legal-drinking age) consumer, thanks to its proximity to local colleges. “We sell a lot of wine,” remarked owner
Greg Hill, who noted that the store’s wine shoppers tend to purchase other products, such as snack foods, as well. At Tramway Market in Stateline, Nevada, meanwhile, owner Lynette Stoudt describes her wine customers as varying in age and wine knowledge. “We have those who will spend a lot of time shopping and will pull out their phones to find out about particular wines, and those customers who just come in and grab a bottle off the shelf,” she said.
ATTENTION TO DETAIL
Among the tactics c-store operators have found to be effective in encouraging customers to purchase wine is price promotions. Minit Mart East, for example, offers a savings on a case purchase, and its “Wine Wednesday” program allows for a small discount on one bottle and a larger discount on two bottles and up. At Barrels & Vine, a purchase of six bottles of wine gets a customer a 10% discount.
We’re selling more wine than ever as younger consumers who started drinking craft beer, then moved to hard seltzers, have discovered wine."
Other tactics can also go a long way. “Retailers have become more creative in their merchandising of wine,” remarked Gough, “including wine tastings, cross-merchandising wine with other products and opportunities to learn about the selection.” Ensuring staff are well educated on offerings is key to selling the category, she added.
Wine marketers agree that focused merchandising efforts will help drive category sales. “Dedicate some physical space and create an environment where the shopper knows where to find these products,” advised Meissner. In addition to price promos, McGinty recommends materials like window clings and door stickers, as well as an investment in cold space. He also suggests that convenience retailers reach out to wholesalers and suppliers for guidance. “Challenge us to provide you with more channel-specific insights and recommendations about how to drive the category forward,” he said.
McGinty and Lucia see continued growth for the wine category in c-stores. “The future is very promising,” said Lucia. “Wine is attracting new drinkers every day.”
Added McGinty, “Wine has tremendous upside for convenience channel retailers, especially as younger demographics are just learning about wine and the many wine-based innovations that are out there.”
The Power of CSX Data
CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or [email protected] for a complimentary executive walkthough.