Convenience stores have become more than Big Gulps and Slim Jims as consumers reprioritize health options.
The channel is evolving from beer, soda and chips to meet a growing demand for healthier food and beverage options, according to NielsenIQ (NIQ) data presented at its C360 event earlier this month.
Reaching Beyond The Six-Pack
While beer and CMBs are still by far the largest beverage category in convenience with sales topping $26.2 billion in the 52 weeks ending May 10, functional beverages are increasingly gaining share. The functional set (which includes energy drinks) has surpassed soft drinks, notching a 5% increase in c-stores over the last two years.
It’s not only energy and functional beverages that are drawing interest, either. Cannabis beverages garnered $23 million in sales, representing a 486% rise year-over-year. Also, outpacing dollar sales growth in convenience are wine (+8%) and spirits (+7%) products, largely driven by the expansion of RTD cocktails and wine-based options.
More Than Bagged Snacks
While coveted Gen Z consumers may be driving the shift away from alcohol, that group is also increasingly looking beyond c-stores. The demographic group under-indexes in the channel more than any other age group.
While Gen Zers shift purchases away from tobacco and beer in increasing numbers, the age group does appear to be following the lead of Millennial shoppers who are seeking beverages, snacks and prepared foods in convenience stores.
Along with the expanded drink options mentioned above, c-store operators are looking to reel Gen Z consumers back through their doors with more robust foodservice offerings. In the total U.S. convenience channel, dollar growth versus share of foodservice was up 12%, NIQ reported. Retailers with greater than 20% of their business in foodservice, saw dollar sales increase 32%.
This has led some c-store chains to expand their prepared food offerings and expand footprints to include cafés. These updated concepts add more seating and barista-style coffee drinks to the traditional grab-and-go offerings in c-stores.