Wine sales spike at convenience stores
February 09, 2021
You might not think of independent convenience stores as a hot wine market, but in fact these stores -- most of them in urban areas -- were one of the hottest spots in the country for wine in 2020, according to National Retail Solutions.
NRS providers scanners and software to independent convenience stores, allowing them to manage inventory. Similarly to Nielsen, NRS can use this scanner data to compile overall sales numbers.
The 1221 stores in NRS' network that sold wine in both 2019 and 2020, sold $19 million in wine in 2020. This may be a drop in the fermentation tank of the national off-premise market for wine, which Nielsen estimates was worth $20.1 billion in 2020. But sales in independent convenience stores were up 44.5% by value in a same-store comparison over 2019: a rise like that should get the wine industry's attention.
Moreover, people spent significantly more per bottle in convenience stores in 2020. Suzy Silliman, NRS Senior Vice President of Data Strategy and Sales, said the average price of a 750 ml bottle of wine was $11.10, which compares favorably to the average bottle price Nielsen reported in supermarkets.
Silliman said the increase was a result of a different product mix, rather than stores simply charging more. This is shown by the fact that people paid more, on average, for a 750 ml bottle in 2020 than they did for a 1.5-liter. The average price for magnums in NRS stores in 2020 was $10.75.
The overall average price per bottle sold of any size was $9.03 in 2020, up from $7.97 in 2019 -- an impressive 13.3% rise in a single year.
Sovos ShipCompliant and Wines Vines Analytics recently reported that many people ordered wine online for the first time in 2020. This would seem to also be true for independent convenience stores, though NRS is not able to measure who is buying the wine. Silliman suggested that some urban residents may feel safer making a quick stop in a convenience store instead of shopping in a larger grocery store, and that savvy merchants updated their wine product mix to satisfy these new customers.
"They do know who their shopper is," Silliman said. "The scenario with Covid likely brought new shoppers into that store who aren't normally coming into their store every Friday to buy a bottle of wine. Does that new shopper have a new brand preference? How can you stay on top of that new opportunity?"
This was also apparent in the rise in average prices paid for several types of spirits. The average unit price for Tequila shot up 45% to $17.08; Cognac went up 15% to $23.27, and became the No. 2 spirit by value, passing vodka (Whiskey remained at No. 1). Combined, Cognac and Tequila made up 39% of spirits sales by value in NRS stores in 2020, up from 31% in 2019. Conversely, for some reason almost nobody buys gin in these stores.
Alcohol is popular in these stores, but wine's rise is recent. It is still only the eighth-most popular product. No. 1 is tobacco, with annual sales of $289 million. Beer ($198 million) is No. 2; followed by non-alcoholic beverages; spirits ($89 million); salty snacks; candy, gum and mints; and wraps and tortilla shells. The latter's prominence should interest wineries that have been interested in reaching out to the Latinx market.
Silliman said that across NRS' entire universe of stores, beverage alcohol makes up about 30 percent of sales, but some stores don't sell alcohol, or sell only beer. Thus the importance of wine in the convenience stores that do sell it is even higher.
Growing this market might be a simple matter of convincing more independent convenience stores to give wine a try. Of the stores NRS measures, less than one-third sold wine in 2020, but an opening is there because 2,852 stores carried beer compared to only 1,221 carrying wine (and 932 carrying spirits.) For spirits it is often a legal issue, but most states that allow beer sales in convenience stores also allow wine sales.
Wine was a much hotter product in NRS stores in 2020 than beer, for which sales were only up 19% even while including hard seltzers and cider. That said, a comparison to other products shows how hot all alcohol products were: tobacco sales were up 9.6 percent and non-alcoholic beverages were up 8.6%. People were clearly buying more alcohol at the local bodega.
"Bars and nightclubs have closed," Silliman said. "Home is where the legal-aged adult is consuming their adult beverages."