Dive Brief:
- Craft beer sales are climbing at convenience stores. For the 52 weeks ending July 16, research firm IRI’s data shows total sales of craft beer in U.S. c-stores reached $1.1 billion, up 9.2% compared to the same period a year ago, reports Convenience Store Decisions.
- “C-stores have had a lower share of craft beer sales, but they’re experiencing more tremendous growth than other channels right now,” Bart Watson, chief economist for the Brewers Association, told Convenience Store Decisions. “Craft beers have typically been in 12- or 22-ounce bottles, but we’re seeing them move into cans and different sizes. That makes it easier for c-stores to sell them. Also, craft beer is a great fit for small, local chains.”
- Some analysts believe there could be a slowdown in the craft beer segment soon, with some areas of the country reaching saturation and large breweries acquiring smaller operations.
Dive Insight:
Craft brews are starting to lose some of their star power. Despite the category’s “cool” factor and halo of authenticity, foreign beer imports, as well as millennial appetites for wine — and its many innovative iterations like wine-infused coffee, sweeter profiles and blue wine — are hurting the industry. The Wall Street Journal recently reported that craft beer sales are declining as more competitors enter the market and rivals are acquired by brewing powerhouses. Nielsen data shows that retail-store sales of all craft beers fell $143 million to $2.3 billion in the first half of 2017.
The good news is that more c-stores could give craft brewers a chance to revive flattening growth. Shoppers are beginning to look for — and even expecting to find — their favorite craft beers at their local convenience store. The Brewers Association has even tried making it easier for consumers to identify truly independent brewers from those with giant parent companies by introducing a new seal to identify small and independently owned beer makers.
Local c-stores partnering with craft brews seems like a natural fit, and one that could lead to a symbiotic relationship for both parties. Craft breweries can retain their local roots and independent heritage while gaining increased distribution and sales at retail. C-stores can use these partnerships as an opportunity to display neighborhood pride and boost their authenticity.
Convenience Store Decisions points to Robinson Oil Corp., owner of 34 Rotten Robbie c-stores in the Santa Clara, California area, as an example of this success. The company has seen microbrew grow from 12% to 14% of overall beer sales in the past year. Consumers Beverages Inc., with 17 stores around Buffalo, New York, has also reported a “huge increase” in the amount of its shelf space going toward craft beer.
Still, the jury is out on whether the average consumer would choose an unknown craft beer at their c-store over a national brand. Indeed, microbrews may find it difficult to effectively compete inside the c-store alongside big beer brands like Anheuser Busch and MillerCoors. Only time will tell if the smaller players can contend with major companies' huge marketing and advertising budgets.