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There are several emerging trends within the alcohol space that are expected to continue to grow in convenience stores, mainly due to increasing consumer demand and options that appeal to those focused on a balanced, active lifestyle. Here’s what you need to know.
Trends in FMB
The FMB category provides the highest gross margin percentage on average today across all beer subcategories at roughly 29%. The category has quickly grown +3.6% in sales and +4.9% in units through the end of Q1 across the convenience store channel.
What’s more, with FMB predominately produced in singles packs, there’s additional sales opportunity, since 64% of beer units sold within the convenience channel in the beer category come from the singles pack type. Two-thirds of new trial purchases within the beer segment are made on either the six-pack or singles-pack type, giving FMB room to grow as well.
Health and wellness
Health and wellness is another emerging trend within the alcohol space, as consumers are looking for better options within the beer category—just as they are across the rest of the CPG landscape. Consumers want higher quality ingredients that also offer lower calories and even functional benefits.
Transparency and traceability will play a major role in consumer’s choices this year. Consumers’ need for reassurance about the safety and trustworthiness of food and drinks has led to increased use of natural, ethical and environmental claims in global food and drink launches. Thus, global organic food and beverages are expected to grow +16.4% CAGR from 2014 to 2022.
Michelob Ultra Pure Gold is a perfect example of brands providing transparency in their new ingredients. The drink is made with organic grains and offers a pure, refreshing taste with only 85 calories and 2.5 grams of carbs. With this new product, the brand that is already the No. 1 share gainer in the beer industry has provided another breakthrough (with its ingredients) that will continue to lead and shape the industry.
The Michelob Ultra brand has seen significant growth, to the tune of +21.2%, within predominantly Hispanic c-store accounts. Given that Pure Gold has price parity to the Mexican import segment, it is highly recommended to be placed next to this segment to maximize sales of this premium new product line. The super-premium segment is up +23.7% in sales and +23.1% in units through the end of Q1 across the c-store channel.
Following trends for maximum participation
Within c-stores, alcohol and beverage trends are important to watch if retailers want to remain competitive. Currently, trends within the FMB segment, as well as within better beverages, are what’s seen as key. From offering new and unique FMBs to stocking products that boast natural, ethical or other better ingredients, following these trends can give stores a leg up against the competition.
Sources: IRI FY ’17; IRI panel, 52 weeks to 1/28/18; IRI Store Level Data (non-projected based on Hispanic Trade Area, 52 weeks ending 01-17-18; CSR Ultra Vol YTD 12/31/17; CSR Ultra Vol YTD Package, Hispanic Accounts 12/31/17; ABI Media Connections; Applied Market Research’s CAGR information; C-Store Explore Exit Interviews 2017; CSX/Nielsen and NACS research; Mintel’s Global Food & Drink Trends of 2018 report