Putting Together the Beer Puzzle: Is This the Future of Beer Sales?

This week I’m delving into a three-part series to better understand the shifting beer landscape. Part 1 was on the importance of two consumer groups and part 2 suggested how Millennials are impacting production.

We’ve looked at who is growing in importance for the beer industry and why an increase in variety may be taking place, but today I thought we’d try and find out where future change may come from.

We’ve become very spoiled as beer fans, with our breweries and bottle shops lined with the finest craft beer for shelves and shelves. But sometimes I’m afraid we forget there are more ideal places where Average Joe Beer Drinker may be picking up their drink of choice:

Fastest growing channels for craft beer sales – convenience stores and value/club stores. Danny Brager #BBsession

— Bron D’Angelo (@BronDAngelo) December 5, 2013

It’s true. For as much as we love to get our beer fresh and straight from the brewing source, off-premise craft beer sales growth (stores) is now almost double that of on-premise sales (bars, restaurants, etc.).

Why is that important? Because as we continue down the path of our expanding craft beer renaissance, convenience stores – those long-forgotten bastions of late night snackery – are more important than ever.

To set the stage, here’s some context: Nearly 80 percent of convenience stores sell beer, accounting for about a third of all beer purchased in the U.S. Lest you think that percentage is chock full of Budweisers, Millers and other BMC brews, the large craft brewers kind of kill it.

Last year, Sierra Nevada Pale Ale saw 12-pack growth of nearly 91 percent in convenience stores alone. Boston Beer’s craft brands grew 15 percent from 2012 to 2013.

Who needs the Kwik-E-Mart?

Now, there’s an inherent problem when combining craft beer and your local convenience store: it’s going to be the “big boys” of craft only. But that doesn’t mean convenience store owners want that to be the end of the story, especially when craft’s hottest brand – the IPA – grew 61.8 percent in sales at convenience stores in 2013. As more breweries big and small roll out craft’s most popular style, it makes sense more shelf space would be made for the IPA.

What future success may come down to, really, is the convenience of convenience stores.

For instance, let’s take craft beer’s biggest demographic base – Millennials. If they’re flocking to cities at high rates and we know they’re interested in craft beer, convenience stores offer a unique sales opportunity thanks to their prevalence (one for every 2,100 Americans) and the fact they’re open later than bars, breweries and other points of sale. Naturally, people in the industry have noticed:

“You will need a little more focus on some of the regional players,” Maiellano said. “Bring in more local brews and focus on learning how to sell craft beer, which is different than traditional beer. For example, you can sell it warm because it’s a different type of buyer.”

Some regional chains have noticed this, like Kum & Go, which sells up to 30 craft beers to customers in six packs at various locations:

Craft beers comprise about 8 percent of the company’s beer sales. However, Richard Ginther, the chain’s category manager for packaged beverages, said he expects craft beer sales at Kum & Go to experience “strong double-digits” in the next five years.

At a time when we’re seeing strong growth in large cities where the most important beer drinking demographic is moving, it should be no surprise that convenience stores are trying to buy into those potential sales. The biggest roadblock simply comes from the stigma of the convenience store. These are places we go to get gas, not peruse aisles of IPAs, porters and stouts.

More so, convenience stores have to get over the stereotype of the place where underage kids drink macro beer out back and more in line with displays we may find in chain stores like Total Wine.

While it may all sound strange right now, don’t forget that convenience stores comprise just over one-third of all retail outlets in the U.S. Where there’s a will, there’s a way, especially when there’s a demand for craft beer and these stores seem to be ready to supply it.

Who needs the Kwik-E-Mart? We do.

I’m curious – do you buy beer at convenience stores?

Putting Together the Beer Puzzle series

• Courting New Demographics
• Do Young Drinkers Impact Our Choices?
• Where is the Future of Beer Sales?

+Bryan Roth
“Don’t drink to get drunk. Drink to enjoy life.” — Jack Kerouac