Expert Advice: Six Reasons Craft Beer Is Critical to C-Store Sales Pt. 1

The first steps to improve revenue and margin

Published in CSP Daily News

By  Charles "Chuck" Kovach, beer strategy consultant

NEW YORK -- As I’ve addressed in a previous column, convenience stores are the leader selling beer, responsible for 40% of off-premise case volume. But the revenue generated from c-store cases sold can improve!

The craft segment is a large c-store opportunity. I call it a $1-billion opportunity. Expressed as a percentage of beer, c-stores sell 2% of craft-beer cases. Competing channels sell five times more or 10% of the share.  My goal is to help c-store retailers improve store revenue and margin by selling more craft beer.

So, why is craft beer so important to the U.S. beer market and the c-store channel? Here are six reasons:

1.       Absolute growth: Craft beer has grown 41 million cases over the last 4 years, while all of the other segments combined declined 15 million cases.

2.       Percent growth: Craft beer sales grew 19% annually the last 4 years, while all of the other beer segments combined declined 1%.

3.       Underdeveloped: Expressed in percent of channel volume, c-stores sell 2% (or one-fifth) of craft beer. Customers are purchasing craft beers at competing channels as c-stores are disappointing consumers with little craft-beer selection.

4.       High dollar ring: Craft beer has a high dollar ring of $35 per case, or two-thirds more than the beer average. Selling more craft beer can improve c-store revenues and store traffic.

5.       Less sold on promotion: Craft beer is less promoted than the beer category as a whole. Fewer cases sold on promotion usually translates to higher retailer margin dollars.

6.       Achievability: It can be done! Set objectives, and leverage the four Ps of marketing: products, placement, price and promotion. Watch for more on those in my next column!