Beer

Craft Breweries Find Fuel in Convenience Store Sales

Craft beer is nudging its way into a retail outlet once dominated by the likes of Bud, Miller, and Coors: the convenience store

beer brewed in a convenience store
Photo courtesy of Yazoo Brewing Co. and Belle Meade Express.

The scene was familiar: about 100 people standing in line, many sporting beards and brewery T-shirts, excitedly shuffling forward toward a highly anticipated release of specialty beer.

The location was anything but. In April, Nashville’s Yazoo Brewing Company picked an unlikely spot for its event—a Belle Meade Express convenience store that sits on a four-lane state highway, adjacent to a Shell gas station and on the opposite end of the block from the Belle Meade Post Office—and people still lined up for their chance to buy one of 120 bottles of the limited-release High Octane, a dark sour blend made from beer aged in Cognac, Sherry, and Bourbon barrels, the latest in Yazoo’s beloved Embrace the Funk series.

“People forget that convenience stores are a viable retail outlet,” says Neil McCormick, Yazoo’s sales and marketing manager. “Most of the time they’re in pretty good locations, they’re independently owned, and it’s a good opportunity to get attention in a place where you’re historically bombarded by 12- or 18-packs of Bud Light.”

In fact, Yazoo’s unique sales strategy fits in perfectly with an ongoing shift by some of the country’s larger craft brewers to focus more attention on convenience stores, where about $16 billion of beer sales occurred in 2016, according to data compiled by Nielsen and Scantrack for the Association for Convenience and Fuel Retailing. Historically, classic brands like Bud Light, Miller Lite, and Coors Light have dominated salesbut that’s changing.

Last year, the only beer categories to see double-digit sales growth in convenience stores were “micro” (14.4 percent), “import” (16.5 percent), and “super premium” (19 percent), per Nielsen and Scantrack. Flavored malt beverage was the remaining category to show any positive growth, at just 2.2 percent sales increase. Overall beer sales saw a 4.5 percent increase from 2015 to 2016. During that same period, IRI-tracked craft beer saw an increase of about 11 percent in convenience store dollar sales.

Given the change in sales growth and types of beer categories gaining shopper interest, it makes sense that craft breweries are trying to take advantage of convenience store chains as a new retail outlet.

“We never want to get to a point where anything is off the table if it makes sense for business,” McCormick says.

Yazoo may have made its foray a one-time deal, but breweries like New Belgium (Dayblazer Easygoing Ale), Founders (All Day IPA), and Lagunitas (12th of Never) are using the convenience store to attract new customers, placing their brands in 19.2- or 24-ounce cans perfect for the “single serve” sales that are typical for that kind of chain.

Spotting this growing trend, Green Flash Brewing Co. made a significant commitment to convenience store sales this spring, launching its GFB blonde ale in 19.2-ounce cans to initially be sold in convenience stores in California, Texas, and Virginia. In 2016 golden/blonde ale was among the fastest-growing style categories in convenience stores, increasing dollar sales by nearly 60 percent, according to IRI.

“It’s a competitive world, and we’re trying to find a way to make our business successful,” says Mike Hinkley, founder and CEO of Green Flash. “When we’re putting our cans in these stores, we’re not replacing another Green Flash brand to make it work. We’re taking on brand-new shelf space.”

For years, the brewery, based in San Diego and Virginia Beach, was known for its use of 22-ounce glass bottles, but use of that format has decreasedincluding a 3.7 percent drop in barrels sold from 2015 to 2016as more breweries transition to smaller-sized packaging and aluminum cans. In 2014, Green Flash sold more 22-ounce bottles than 12-ounce ones, Hinkley says, but that’s no longer the case. To stay relevant and gain new customers, the company had to reconsider how it sold its beer as much as where. By the end of this year, Green Flash plans to sell GFB in about 1,000 convenience stores across its three rollout states, with hopes to continue to expand.

A lot of those plans depend on the reception of the beer’s price. The beer retails for $2.49 a can, but Hinkley says that a year-round special will enable the purchase of two cans for $4, to take advantage of the “convenience store model” that relies on turning a single-serve purchase into two.

Between location and cost-effectiveness, Hinkley says that he sees beer sales in convenience stores as an important part of business planning not just for his company but for all of craft beer. According to the Brewers Association, breweries that fit under the trade group’s definition of “craft” make up only about 12 percent of sales volume nationally, but as craft beer continues to move into mainstream habits of drinkers, Hinkley says fellow breweries would be wise to embrace models that connect with customers at all potential points of contact.

“A couple years ago we were pretty much exclusively in super-crafty beer bars and specialty bottle shops,” Hinkley says. “But I got into the business because I wanted to make something and have it be on the shelf where anyone can buy it. This is a whole new piece of business, and 15 years in, it’s a new way to learn and get excited.”

Bryan Roth is an award-winning journalist and the director of the North American Guild of Beer Writers. He’s written for All About Beer, Beer Advocate, Good Beer Hunting, and other beer industry publications. Find him tweeting about beer at @bryandroth.

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