When Americans want to find their next favorite adult beverage, they head to convenience stores. Increasingly, these stores are places of discovery and delight, offering consumers new brands, new flavors and new experiences that go beyond the standard categories of wine, beer and liquor. In 2025, many of the fastest-growing alcohol brands don’t fit neatly into those traditional boxes: They’re flavor-forward, conveniently packaged and may not immediately be classifiable by their base fermentable.
This so-called “fourth category” comprises products such as wine-based cocktails, ready-to-drink (RTD) cocktails, hard seltzers, flavored malt beverages (FMBs), flavored ciders, flavored wines and malt-based versions of existing spirits brands. Sometimes known as progressive adult beverages or alternative adult beverages, these category-bending, innovative drinks are some of the hottest brands on shelves today. NielsenIQ (NIQ) data shows that among the 30 fastest-growing adult beverages in chain retail, 60% are RTDs and non-alcoholic brands. Together, fourth-category beverages represent roughly 12% of all beverage-alcohol sales and are second only to imported beer in off-premises dollar sales.
Breaking it down further, NIQ data from 2024 shows that unit sales of prepared cocktails increased 25.3%, RTD cocktails increased 20.8% and non-alcoholic-beverage units increased compared with 2023. From January to June 2025, those same categories increased unit sales by 5.7%, 27.0% and 102.7%, respectively.
“Convenience stores are where you find the newest beverages,” said Brad Schultz, co-founder and chief marketing officer at BeatBox Beverages, which produces wine- and malt-based cocktails sold in Tetra Paks and marketed as “party punch.” BeatBox was named 7-Eleven’s Alcohol Supplier of the Year in March.
“C-stores have done such a great job of meeting how fast culture is moving and how fast consumers are exposed to new things,” Schultz said. “C-stores have done a great job bringing in products that the larger retailers have slept on and taken too long to bring in.”
Of the eight emerging “brands to watch” spotlighted in PDI Technologies’ C-Store Shopper Insights Report for CPG Brands earlier this year, two were alcoholic beverages. Happy Dad hard seltzer and Hard Mtn Dew flavored malt beverage, which both fall outside of the traditional-beer category, generated average annual store revenue of more than $100,000, according to the report.
But this new wave of fourth-category beverages isn’t without its challenges for stores, particularly when it comes to organizing shelves and making space for new formats and brands. Should a spiked coconut water be shelved alongside hard seltzers or hard teas? Should a hard kombucha be near seltzers or RTD cocktails? And if a store is bringing in a new fourth-category product, what should cede shelf space to that new item?
Michelle Abdollah, category manager of alcoholic beverages and private label development at Pleasanton, California-based ExtraMile Convenience Stores, said there’s still no consensus on where some of these more novel products should land on the shelf, floor or cold box.
“There’s no go-to,” Abdollah said. “One retailer could be merchandising a product one way, and then another in a different way. And consumers aren’t really clear on where to find a certain brand, or if those items even exist, and they’re not willing to search the shelves for 10 minutes. They’re making quick decisions.”
Indeed, today’s young, legal-drinking-age convenience store alcohol shopper doesn’t necessarily have the same brand or even category loyalty as prior generations did. The days of someone drinking the same beer every night are in the rearview mirror, replaced by customers who are making selections based more on their mood and consumption occasion than any particular loyalties. If a beverage matches their current vibe and flavor preferences, category is much less important to them. Abdollah said it makes sense to merchandise a product such as BeatBox near single-serves of full-flavored malt cocktails such as mai tais and margaritas, even though they might be made with two different alcohol bases. Why?
“It’s the same type of consumer,” Abdollah said.
How can store shelves be organized to better serve this occasion-driven customer? Joe Sepka, co-founder and director of client success at data analytics firm 3 Tier Beverages, said c-stores need to shake off the old “beer goes here, wine goes there, spirits go in the back” mindset in favor of highlighting occasions: Organize shelves to reflect groupings such as “refreshment,” “weeknight unwind” or “party-ready.” If this sounds like a radical departure from how shelves were stocked just a decade ago, that’s because it is. But c-stores, with limited square footage, need to be at the forefront of how the modern consumer shops.
“Today’s drinker is brand-curious and category-fluid. Give colorful, flavorful, premium drinks eye-level space to compete,” Sepka said.
Making Space for Trial
Of course, every beverage company would love to have its drink shelved at eye level in the cold box. But space is finite, and it can be risky to swap a known brand for a relatively untested new one, especially if it’s in a novel category.
“There are some newer types of brands and items that are emerging [for which] we haven’t yet figured out where to carve out that space,” Abdollah said.
She uses hard kombucha as an example. A small convenience store likely doesn’t have square footage to carry six hard kombucha brands; perhaps it takes a chance on the top-selling one. Where should it be shelved? Place it with hard seltzers and FMBs and it might get lost among more recognizable brands. But giving it its own shelf or endcap might be ceding valuable real estate to a brand that hasn’t fully proven itself. Abdollah recalled attending a trade show and being intrigued by a brand of hard tepache (a traditional Mexican fermented pineapple wine) but also having concerns about where it would go on store shelves and whether the right shoppers would be able to find it.
Luckily, convenience stores have a popular cooler that shoppers are already drawn to: the single-serve doors. Abdollah said that area is a natural place to shelve one or two SKUs of a new fourth-category beverage that doesn’t yet merit its own cold-box allocation. Door hangers and suction-cup racks are also a useful way to display novel items, particularly those that don’t fit in established categories or, like BuzzBallz and Big Sipz, have an unconventional package shape. The single-serve section offers brands a place to prove themselves and for stores to track velocity and revenue. But they also meet a critical consumer desire: low-stakes trial.
At last year’s NIQ Consumer 360 conference, a panel of c-store experts emphasized that the convenience retail channel is the top destination for shoppers seeking innovation in food and beverage flavor. Single-serve drinks offer a low-cost, low--
effort opportunity to immediately try an intriguing fourth-category beverage without committing to an entire variety pack. The average c-store shopper visits the store three times per week, making it a space of both routine and discovery. Customers may visit the store at different times of day for different occasions, so offering a diverse set of products, flavors and formats is key to capturing them across these multiple need states. The industry’s 160 million daily visits offer massive opportunities for new brands to convert customers—one package at a time.
“That’s half the population of the United States,” said Evan Shaver, vice president of category leadership for PepsiCo. “So if you want visibility for a new product, you can have more eyeballs on it in the c-store channel than any other.”
POS That Pops
Attracting eyeballs to fourth-category beverages is more critical than it is for traditional beer, wine and liquor brands, which benefit from decades of consumer familiarity. As with Abdollah’s examples of hard kombucha or hard tepache, shoppers may not even be aware that certain new types of drinks exist until they see a display in their favorite store.
The single-serve shelf of the cold box is a prime area from which to reach them, but stores may not be ready to commit even that space to an emerging brand in an unproven category. BeatBox faced this challenge early on, further hampered by select category captains who didn’t want to cede refrigerated space occupied by competing products. Schultz said BeatBox had to be realistic about the slim chances of slotting straight into coolers. Instead, the brand offered stores narrow, stand-alone shippers in bright, eye-catching colors.
“That’s like Malibu beachfront property. So as a new brand, to go to a store and say, ‘Hey, put this new brand into your most valuable space,’ it’s tough,” Schultz said. “So we created the shippers to make incremental space for the retailer. We’re acknowledging that you have such little space. This takes up one tile in your store and generates hundreds if not thousands of dollars of profit for you every turn and every month.”
Eventually, BeatBox proved itself through stand-alone displays and, in many chains, is moving into the cold box with multiple SKUs. (The brand sees, on average, a 181% sales lift when a store refrigerates it compared to when it is displayed warm.) Still, its warm shippers continue to be an important tool for catching shoppers’ eyes and alerting them to new flavors and promotions, including music festival sponsorships and partnerships with basketball star Shaquille O’Neal and musician Avril Lavigne.
Abdollah said combining pop-up displays, shipper displays and small-format floor stacks with promotional rebates really moved the needle for new fourth-category brands such as wine- and malt-based Fireball. As customers become more price-sensitive, combining eye-catching displays with a rebate can help convert them from initial curiosity to trial.
“These newer players have gotten pretty aggressive with the promotional rebates that they’re offering our customers,” Abdollah said. “Customers think, ‘Hey, this is an amazing deal, and this drink seems pretty interesting. Let me try it.’”
Know the Competition
Despite clear evidence that fourth-category beverages are some of the fastest-growing in alcohol right now, that doesn’t mean stores should automatically swap proven brands for shiny upstarts. Years of brand and SKU proliferation has finally slowed, with NIQ data showing that UPC counts leveled off last year at about 7,500 RTD products. In a 2024 midyear report, NIQ predicted that a “shakeout” would occur among long-tail brands as consumers and stores focus on proven winners.
This creates a push-pull for c-store operators who need to keep shelves fresh while not sacrificing stalwart brands shoppers expect.
“You’re not going to get space on my shelf until you give me an educated response in terms of what and where you’re supposed to be placed,” Abdollah said.
This is another retailer concern BeatBox has tried to get ahead of. An initial spatial target for the brand in c-stores was on the refrigerated shelves of 750 ml wine bottles. BeatBox was often able to persuade stores that this cold-box space could be more productive if it were stocked with an RTD product such as BeatBox and the white wines were moved to a warm shelf. Schultz said the argument cited the consumer’s mindset: An RTD needs to be cold for immediate consumption, while a bottle of wine is something most shoppers are willing to buy and then refrigerate at home before consuming it at a party later that day or even later that weekend. Most stores, Schultz said, saw a “massive” lift from making the swap.
However stores classify and merchandise fourth-category products, Abdollah urges them to keep the consumer perspective in mind. Thinking too rigidly in terms of beer, wine and spirits categories isn’t how alcohol shoppers approach the shelf—and it can even lead to misleading internal data. For example, if a store operator sees a big boost in malt-based margaritas, it shouldn’t assume that necessitates much more floor space for traditional beer, even if the former is classified as beer internally. In fact, from the drinker’s point of view, those malt-based margaritas have more in common with RTDs and FMBs than they do with, say, domestic lagers.
Understanding how, when and why Americans are visiting c-stores’ alcohol aisles can help retailers ensure the product mix and merchandising stays fresh, no matter what beverage trends lie ahead.