Coming of Age

The wine category has matured in c-stores with single serves and ready-to-drink cocktails.

Coming of Age

November 2023   minute read

By: Terri Allan

Thanks to the emergence of new products and packaging, the wine category continues to enjoy steady growth in convenience stores, with sales even outpacing the surge brought on by the pandemic. With more stores stocking wine and operator interest in the category on the rise, the segment is well positioned to capitalize on current trends and become a bigger contributor to c-store profitability.

“Unlike other trade channels, wine sales are growing in c-stores, and that’s particularly impressive given that the category is going up against Covid numbers,” said Rick Rechetnik, senior vice president of sales for Riboli Family Wines, the maker of Stella Rosa wines. Indeed, for the 52-week period ending in early August, dollar sales of wine in c-stores were up 6%, Rechetnik reported. While c-stores are generally known for carrying lower-priced wines, “Some c-stores are even finding that they can sell high-end wines. Their customers are receptive to it,” Rechetnik said.

According to the NACS State of the Industry Report® of 2022 Data, wine averaged $1,331 in sales per store, per month last year, an increase of 11.1% from the previous year. With margins of about 28% in 2022, the category recorded gross profit dollars per store, per month of $375, a 10.4% increase from 2021. Still, wine remains an overall small contributor to c-store sales, accounting for just 0.41% of in-store sales in 2022, according to the SOI report, an increase of 0.02 points from the year prior.

Wine Cocktails Gaining

While table and varietal wines account for the largest share of category sales—42% in 2022—wine-based coolers and wine cocktails are gaining. The emerging subcategory represented nearly 33% of wine sales in c-stores last year, Emma Tainter, NACS research analyst, said, and through the first four months of 2023, its average sales per store per month appeared to be driving overall category growth. “Wine-based coolers and cocktails are benefitting from the convenience factor,” she noted. And they’re providing a lift for many stores as well. “As more c-stores can sell wine-based cocktails than liquor-based cocktails, these products give them the opportunity to compete in the cocktail segment,” Tainter explained. “Consumers can stop in a c-store on a Friday night and purchase cocktails, making it a one-stop shop.”

Marketers of wine-based cocktails say the products have been a welcome addition to c-store coolers and shelves. “Wine-based cocktail offerings in c-stores provide accounts with an exciting opportunity to reach shoppers they may not have had access to in the past with their wine and beer selection,” said Tracy Frisbie, executive vice president, sales and marketing, BuzzBallz/Southern Champion LLC, which markets single-serve wine-based BuzzBallz Chillers, along with liquor-based BuzzBallz Cocktails. Herb Smith, vice president, customer development, E. & J. Gallo Winery, added that c-store customers are responding favorably to the products. “The ready-to-drink category has really penetrated the c-store channel by offering consumers multiple formats and sizes to consider,” he noted. Gallo recently added Vibe by Vendage fruit-flavored wine beverages in 500 ml Tetra Paks, and according to Smith, they’ve been an “instant success.”

Convenient packaging isn’t just limited to wine-based cocktails, though, as table wine is increasingly appearing in more user-friendly packages, including single-serve cans and pouches and multiserve wine boxes. Rechetnik noted that while 750 ml bottles remain the predominant package for wine, smaller packages are gaining ground. He pointed to 187 ml bottles, single-serve cylinders, 500 ml Tetra Paks and mini boxes. Stella Rosa’s 250 ml skinny cans, available in seven flavors, are selling well, he noted.

“Convenience shoppers are shopping for a variety of occasions, but most of those occasions are for immediate consumption,” Smith said. “Consumers often want to enjoy a single glass of wine, so the 750 ml package can sometimes be a barrier. Alternative packaging allows our products to be very versatile, which consumers appreciate.” Indeed, at Rocket Market in Spokane, Washington, “canned wine flies off the shelf,” said wine specialist Teddy Thompson. To drive sales, she puts chilled whites like pinot grigio on the top shelf of the cold box. Pointing to the demand for immediate consumption from consumers, the retailer noted that canned wines that aren’t chilled don’t sell as well as those that are.

Increased Interest From Retailers

The growth of c-store wine sales in recent years wouldn’t have been possible without increasing interest in the category from retailers. According to the SOI report, 69.1% of c-stores offered wine last year, up one percentage point from 2021. Rechetnik noted that some stores confronting anti-tobacco and anti-vaping sentiments in their markets have leaned into other categories. “They need to make up for the lost revenue,” he explained. Frisbie and Smith pointed to the loosening of restrictions in some areas that now allow for the sale of wine in c-stores, such as in Colorado. “As more retailers pivot toward a more robust offering of wine and spirits in their stores, customers will continue to gravitate towards the channel for their wine and spirits needs,” Smith said.

Private label wines are another growth area for c-stores. 7-Eleven has offered its own labels, Yosemite Road and Plot + Point, for some time, and earlier this year Circle K announced plans to launch its first private label wines, to be rolled out to some 3,000 stores across the United States. The portfolio includes its line of Sunshine Bliss wines, priced under $8 a bottle, as well as a fine wines range, priced between $10 to $25. Even one-store Rocket Market boasts a line of private label wines and sparklers, Thompson said, priced up to $14 a bottle.

Best-in-class merchandising practices can go a long way in building wine sales in c-stores. The Stop & Go chain, with more than 60 stores in Ohio and Michigan, has been allocating more space to the category, and according to Neal Frandsen, vice president, marketing, wine sales have seen double-digit gains over the last three years. Some of the stores provide up to 24 feet of shelf space for wines, including fine wine selections with bottles priced up to $230. As a result, some of the sites have emerged as destination stores for local area wine consumers. Stop & Go also ties in wine messaging to its customer loyalty program, Frandsen reported, with tactics like geofencing and email and text-message blasts.

Making Room

Wine marketers encourage retailers to feature wine displays, even if they are small, to drive category awareness. Rechetnik noted that Riboli Family Wines offers racks designed for c-stores that merchandise both standard wine bottles and the smaller variants. BuzzBallz’s Frisbie also pointed to “strategic placement at the store counter or in the cold box.” Smith recommended that wine-based cocktails and coolers should be merchandised in the cold box with beer. “Traditional beer and RTDs should coexist with wine-based options,” he remarked.

Rocket Market even employs marketing tactics more customary of fine wine shops. The store holds weekly wine tastings that feature eight different wines, paired with snacks, for $30 a person. “People love it,” Thompson said. In addition, Rocket Market offers 12 different wine club configurations, so customers can customize their monthly packages based on wine type, quantity and price point.

Convenience retailers like Thompson and Frandsen are seeing success with wine because they’re dedicating the time and space necessary to build the category. Pointing to Stop & Go’s 43% margin on wine, Frandsen advised other retailers to consider the opportunity saying, “It’s a high-margin category.”

Terri Allan

Terri Allan

Terri Allan is a New Jersey-based freelance writer. She can be reached at [email protected].

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