High and Dry

Convenience retailers are adapting to beverage supply disruption.

High and Dry

February 2022

By: Terri Allan

Lynette Stoudt longs for the old days. “We took for granted in the past when we placed an order and, low and behold, it showed up,” the owner of Tramway Market in Stateline, Nevada, lamented. Indeed, today, convenience retailers like Stoudt place orders with vendors, and there’s little guarantee they will be fulfilled. “One of my distributors has taken to calling my orders more of a wish list than an order,” she said. “It’s been a big challenge for the last year—ordering products and not receiving.”

Convenience store operators haven’t been immune to the supply-chain disruption that has wreaked havoc on the retail industry amid the COVID-19 pandemic. Virtually all in-store categories have been impacted in some way, but the beverage sector—one of the channel’s most lucrative offerings—has been particularly hard hit.

“It’s everything—soda, energy drinks, juice, beer,” remarked Vince Segura, general manager and retail director at Fuel City, with seven locations in Texas. “It’s hit or miss. One week it may be a certain package of beer; the next week, it’s something different.” Unfortunately, for Segura and other c-store operators, the situation isn’t expected to abate any time soon.

One of my distributors has taken to calling my orders more of a wish list than an order.


Retailers, vendors and supply-chain experts point to numerous factors contributing to merchandise outages. Labor shortages have been a major influencer, whether at the supply, transportation or warehouse level. Last fall, the American Trucking Associations said the trucking industry is short by a record 80,000 drivers, and that figure could double by the end of the decade. Bump Williams, president and CEO of Bump Williams Consulting, which advises all tiers of the beverage industry, pointed to a lack of CDL drivers to transport finished product from docks to warehouses, from warehouses to stores, or to move containers of cans and glass off of cargo ships.

Beverage producers and distributors have also had to contend with labor shortages of their own for the past couple of years, whether due to virus outbreaks, quarantine protocols, family conflicts or enhanced unemployment benefits. According to Segura, “Coca-Cola has told us they can’t get enough people to work in their warehouse or enough drivers, and as a result, can’t send the deliveries.” Similarly, Greg Hill, owner of two Minit Mart stores in Holland, Michigan, reported, “My biggest distributor told me that due to staffing constraints, orders have to be cut.”

Dan Hennessy, chief sales officer at beer marketer FIFCO USA, said that while his company hasn’t experienced troubles with production, “we’re facing the same challenges as everyone else for freight and trucking, resulting in issues moving inventory from the breweries to beer wholesalers.” Labor issues at beer distributorships have resulted in reduced service to some stores, he noted, such as from twice-weekly delivery to once a week.

Labor challenges have also dramatically impacted ports, where containers carrying products ranging from imported beer and wine to glass bottles and aluminum cans arrive. A veteran truck driver wrote of adverse working conditions in the shipping industry in Medium last fall, detailing hours-long waits for container pickups and low pay, conditions that have shown little signs of improvement despite the spotlight placed on the clogged ports in the past year. Aluminum can procurement has been difficult for numerous beverage suppliers, coming at a time when demand for the packaging has surged, driven by the popularity of craft brews and ready-to- drink beverages.

The consulting firm RSM LP has even pointed to “just-in-time” inventory and manufacturing practices—which it calls “a cornerstone of industrial efficiency for decades”—as failing companies when COVID-19 struck because they quickly exhausted their lean inventories and had a hard time restocking.


Leading beverage suppliers declined to comment for this article, but company exec- utives have referred to the impact of supply challenges on their businesses during recent financial presentations. In late October, Anheuser-Busch InBev said of its third-quarter performance in the U.S.: “Sales to retailers declined 4.7%, driven by a lower industry, segment shift and supply-chain disruptions resulting in out-of-stocks.” And during Molson Coors Beverage Co.’s third-quarter investor and analyst presentation, CEO Gavin Hattersley conceded, “Fuel prices are up. Truckers are in short supply around the world, and freight costs are up, too.”

During a supply-chain webinar in November hosted by the Distilled Spirits Council of the United States, Peter Friedmann, executive director of the Agriculture Transportation Coalition—which focuses on issues pertaining to U.S. agricultural exports—said, “The supply chain is in crisis mode,” a situation that has been exacerbated by COVID-19.

The packaged beverage category, a key in-store segment for c-stores, has been hampered by supply-chain troubles. Retailers report that regardless of the marketer, many carbonated soft drinks and energy drinks are on allocation, and that plastic bottles have been the worst hit.

“The outages are sporadic,” remarked Hill. “One day a product is available; the next day it isn’t.” Rick Rubino, co-owner of the three-unit Filling Co. Gas & Grub chain in Virginia, echoed Hill’s comments. “Every week, it’s something else,” he said of beverage shortages, noting that in late October, Diet Mountain Dew couldn’t be had. At Fuel City, meanwhile, it’s Coca-Cola Beverages’ Powerade Blue Mountain Blast that’s been hard to come by. “It’s one of our top sellers, and we haven’t had it for months,” Segura reported.

State and local regulations pertaining to alcoholic beverages have made supply troubles for those products even more intricate. Retailers reported that as with packaged beverages, beer shortages are across the board. “It’s the major brands—Miller Lite, Corona Extra, Stella Artois,” said Rubino of beer out-of- stocks at his stores. “I can order 20 cases and only receive five. With the specialty beers, you don’t notice out-of-stocks because there are so many of them.”

Hill and Stoudt both pointed to difficulties sourcing major Mexican brews. “I haven’t been able to get six-packs of Pacifico for two months,” the Nevada retailer said in November. At The Convenience Group stores in the Northwest, where craft brews have a big presence, “We’re seeing pressure with cans,” said Don Rhoads, president, adding that some small brewers have also had problems sourcing hops. And for wine and liquor, glass bottle shortages were emerging late last year, a situation that was leading to price hikes, according to Stoudt.

My biggest distributor told me that due to staffing constraints, orders have to be cut.


Beverage suppliers and distributors have only offered limited support and advice to help merchants navigate through the supply outages, retailers said. “They tell us to order big in case an order doesn’t come in the following week,” remarked Fuel City’s Segura. He’s done that at the small shop he manages, but it’s brought its own set of problems. “I just received a delivery of 400 cases of Coke, much more than normal,” he explained. “So now we’re stuffing it in every nook and cranny.” In Michigan, Hill is able to move packaged beverages from one store to the other when needed, as the shops have different delivery days. But that’s a practice he can’t apply to the beer category. Nevertheless, he expressed gratitude that “some distributors will provide special delivery when a needed item is available.”

FIFCO’s Hennessy recommends that c-stores focus more on future needs than ever before. “Find out from suppliers which products are likely to be in stock for the next five to six months,” he advised. “Find out which brewers and wholesalers have large supplies. You may have to make some shifts.” And when larger-than-normal deliveries do arrive, he suggests that retailers build small displays with the backstock.

Williams added that now is a good time for retailers to scrutinize their assortment. “Retailers need to do a much better job of properly allocating shelf space to brands and packages that are winning,” and eliminating those that are no longer performing, he said. He also advised retailers to meet with distributors and manufacturers frequently to be sure growth strategies are aligned. 

Find out from suppliers which products are likely to be in stock for the next five to six months.


Savvy convenience retailers are taking matters into their own hands by seeking out alternative products and vendors. Stoudt, for example, hasn’t been able to access Starbucks Frappuccino for a few months. “So, we switched to Peets, which is more of a local brand, and it’s selling well,” she remarked.

Other retailers like Segura and Rhoads are utilizing distributors they haven’t worked with in the past. And several report turning to grocery and big box stores to fulfill their beverage needs. “When there was an out of stock on Gatorade, I was able to load up at Sam’s Club,” Rubino remarked. Likewise, Rhoads points to utilizing Costco and WinCo Foods for his beverage needs. “I don’t like to do it because it’s labor intensive, but we need to have our shelves looking manageable,” he noted.

On the beer side, Rhoads’ stores are being proactive in the midst of product shortages. “We’ve launched our own private-label craft beer, Gorilla Juice,” he revealed. Produced by Barlow Brewing, the value hazy IPA is priced $2 below a four-pack of a comparable name brand.

Indeed, the trips to big box stores, which are often loaded with coveted beverages, are increasingly frustrating c-store operators about marketplace imbalances. “There seems to be a distribution prioritization,” in that big box and e-commerce retailers are able to access product that smaller retailers can’t, said Rhoads. “It puts us in a tough position. There should be more equal access.” This inequity was addressed in a recent letter from NACS to federal lawmakers reviewing current supply-chain challenges.

With the supply-chain disruption now stretching into its second year, it’s unlikely the situation will dramatically improve anytime soon. “I think this could last into the summer,” said Segura. Hennessy believes that while packaging constraints should clear up by the big summer selling season, labor and trucking challenges will continue. After all, he said, “the trucking shortage has been bad for the last four years.” Rhoads, meanwhile, said that a best case scenario would see the disruption easing by mid-year. “Worst case, it could continue all year,” he remarked. However long the shortages endure, Rhoads speaks for c-store operators around the country. “We’ll just do our best,” he said. 

Terri Allan

Terri Allan

Terri Allan is a New Jersey-based freelance writer. She can be reached at terri4beer@aol.com and on Twitter at @terriallan.