Keeping Spirits High

7-Eleven’s Evolution Stores feature a wine cellar with an enhanced and expansive selection of wine and beer.

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Retailers are redesigning their stores to accommodate expanded wine and liquor sections

By Kathleen Furore

WHAT HAPPENS when market forces catapult a category onto the list of top-sellers?

That’s exactly what happened in 2020 when wine and liquor became a top 10 category in the convenience channel during the pandemic, and then gained an average of 8.5 percent in sales per store in 2021, according to the Convenience Store News 2022 Industry Report.

Elevating product offerings and redesigning stores to accommodate expanded selections of wine and liquor have been among convenience channel retailers’ responses.

Take Irving, Texas-based 7-Eleven Inc. In June, the nation’s largest convenience store chain announced the opening of its fifth Evolution Store in the Dallas-Fort Worth area and the ninth in the country. A wine cellar with an enhanced and expansive selection of wine is among the offerings customers can find in these stores — described as experiential testing grounds where customers can try and buy 7-Eleven’s latest innovations in a pioneering store format.

“Wine sales are up as we continually invest in space, promotions [and] upgraded assortment to let our customers continue to know we are serious about our wine business.”

— Jon Manuyag, Plaid Pantry

Wis.-based Kwik Trip Inc. and Des Moines, Iowabased Kum & Go LC are other c-store chains upping their game in the wine and liquor space. In February 2021, Parker's debuted Parker's Spirits in Pooler, Ga. The liquor-focused brand offers a large selection of premier wines, craft beers, collectible bourbons, and other packaged beverages. Last year saw moves by Kwik Trip and Kum & Go, too.

Kwik Trip launched Kwik Spirits, a new store format featuring a variety of wine and liquor, while Kum & Go

worked with E. & J. Gallo Winery to streamline its wine assortment. Together, the companies identified bestsellers nationally and by state and generated a market-specific core list incorporating multiple store configurations. By clustering store configurations by state, the supplier was able to provide a consistent assortment at the right price points and introduce new items. The results were impressive: the retailer saw an 8 percent increase in wine sales year over year, and E. & J. Gallo was named one of Convenience Store News’ 2022 Category Captains.

Consumer Preferences Are Key to Success

The ways in which wine and liquor drive consumers to c-stores underscores the important role these categories can play for convenience store operators and the channel overall.

Convenience store visits are highly mission-driven, with each trip usually serving a primary need. Alcohol has been identified as one of nine main trip missions, according to VideoMining, a provider of comprehensive insights on in-store shopper behavior.

When comparing the last three years (first quarter of 2022 vs. first quarter of 2019), the Alcohol trip mission gained 15 percent in share of store trips. Other trip missions that posted strong gains were Refreshment, Meal Building and Snacking, according to VideoMining.

Merchandising & Marketing Tips

No matter the size or scope of your wine and liquor categories, the way you merchandise and market the products you sell will ultimately determine their success. Here, Christian Rogers, alcohol category manager for Des Moines, Iowa-based Kum & Go, and Jon Manuyag, director of marketing at Beaverton, Ore.-based Plaid Pantry, share tips on how to effectively merchandise and market wine and liquor to boost sales and profits.

Cross merchandise creatively. “When looking at the alcohol category, there has been a lot of category blurring between beer, wine and liquor,” said Rogers. “Because of this, we pick and choose the right places to cross-merchandise within the total alcohol space to drive incrementality and get the most eyeballs on a product.”

At Kum & Go, for example, spirits- and wine-based RTDs are mixed into the beer space. “You will also see us feature spirits in suction cups in our cold vault space or beer caves to convert add-on purchases to beer purchases,” Rogers noted. “You will see many of our promotions drive the consumer to purchase multiple units, or to purchase an add-on item.”

Choose the right assortment. For Plaid Pantry, the right assortment means finding a good mix of value, mid-tier and premium price points, Manuyag said. “Also have a great mix of boxed wines, as customers see those as good perceived value items.”

For Kum & Go, it means focusing on premium product. “We tend to offer a more premium assortment than many competitors with the intent to drive consumers up from the lower price tiers and meet the increasing demand in the premium segments,” Rogers pointed out.

Run seasonal promotions. “Promoting to the seasons helps,” Manuyag advised. He recommends promoting white wines and rosés in the spring/summer timeframe, and reds, pinots and cabs in the fall/ winter timeframe. Incorporating percentage-off category savings drives engagement as well, according to Manuyag.

Knowing what customers likely will be looking for when they arrive is key.

When it comes to wine, Christian Rogers, Kum & Go’s alcohol category manager, says he sees two trends: the premiumization of the wine consumer, and the continued acceleration of winebased ready-to-drink (RTD) beverages. “Super-premium wines, tetras [Tetra Paks] and tequila are also driving the wine and liquor categories,” he added, noting that tracking trends helps Kum & Go select inventory that ultimately appeals to a broad a base of consumers.

“We have geared our assortment to meet the new demand in these subcategories, while still ensuring we are dedicating appropriate space to the mature subcategories of the wine segment,” Rogers explained. “Within the wine and liquor categories, we offer a strong assortment of products at a number of different price points, with the goal of meeting our customers’ needs for any occasion.”

The approach has paid off, as Rogers reports the company’s 2022 wine and liquor sales are up vs. pre-pandemic numbers, although he says they are “a bit softer than we would like to see YTD. Much of this is due to the convenience channel losing share of large packs to large format.”

Beaverton, Ore.-based Plaid Pantry Inc. is another c-store chain reaping benefits from upgrading its wine program, according to President and CEO Jonathan Polonsky.

“In our market, selling spirits is not an option in the convenience channel, so we have to shine in the beer/wine categories,” he said. Plaid Pantry operates 106 stores in the Northwest.

Layering a selection of “best” wines on top of what Polonsky calls a pretty broad “good” and “better” offering has brightened that shine. And so have local vintages.

“With us living in the Willamette Valley, there are a handful of local wines we offer up that resonate with the Northwest shopper and create a tailored local assortment,” Plaid Pantry Director of Marketing Jon Manuyag said.

The approach is working. “Wine sales are up, and I believe it is a combination of the ‘COVID effect’ and the addition of the higher-end wines we now offer,” Polonsky explained. “We have indexed higher than our local competitors for a long time, and Jon has kicked it up a notch in the last couple of years.”

Added Manuyag: “Wine sales are up as we continually invest in space, promotions [and] upgraded assortment to let our customers continue to know we are serious about our wine business.”

When it comes to advice on how to build a successful wine and liquor program, Kum & Go’s Rogers offers this recommendation: “Listen to your customers through your internal sales data. They are the ones shopping your stores and telling you what they want by the purchase and by the choices they make. Lean on your category partners to provide insights and ideas to support growth of the total category. And keep a close eye on syndicated data. … If you are not paying attention and constantly innovating, you will fall behind.” CSN

The Latest in Liquor Trends

While not specific to the convenience channel, data from the 2022 Alcohol Report: Digital Visibility Is Reforming the Alcohol Industry from Newark, Calif.-based DataWeave, a leader in e-commerce analytics, can help inform decisions about the kinds of liquor to add to c-store shelves.

Vodka remains the most popular liquor sold in the United States, according to the report. However, agave-based spirits — most notably, tequila and mezcal — are now the second most popular category, with sales reaching $5.2 billion in 2021.

As the report notes, the Distilled Spirits Council of the United States stated that tequila witnessed the highest annual growth rate in 2021 (up 75 percent), followed by American whiskey (46 percent) and cognac (31 percent).

The DataWeave report also highlighted that more and more consumers are heading online to buy wine and liquor. According to the data, U.S. online alcohol sales grew from $2.6 billion in 2019 to $6.1 billion in 2021 — a 131 percent increase.

“Within the wine and liquor categories, we offer a strong assortment of products at a number of different price points, with the goal of meeting our customers’ needs for any occasion.”

— Christian Rogers, Kum & Go