Convenience Store News

FEB 2017

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WWW.CSNEWS.COM | FEBRUARY 2017 | Convenience Store News 25 B everages are big business for convenience store operators. Combined, packaged beverages, beer and dispensed bever- ages (hot, cold and frozen) brought in $383,490 in in-store sales for the average convenience store last year, and $58.1 billion in in-store sales for the total convenience store industry, according to the latest Convenience Store News Industry Report. As a percent of in-store sales, beverages combined account for 27.3 percent of share. Those are pretty convincing numbers for the impor- tance — and strength — of beverages in the convenience channel. Yet times are changing for all segments of bev- erages, and it is imperative that convenience store opera- tors not take their beverage business for granted. Even though there are more varieties of beverages available today than in the past in order to appeal to consumers' wide range of needs and wants, new research from The NPD Group shows that in the United States, there are actually 72 fewer in- or away-from-home pur- chased beverage occasions per person annually today than there were 10 years ago. One of the chief reasons why is that consumers are migrating to tap water for spending and sustainability concerns. Regulatory measures are also having an effect on bev- erage sales. In 2016, major cities such as San Francisco, Philadelphia and Chicago passed or implemented addi- tional taxes on sweetened beverages, a trend that is continuing as interest grows in healthy eating and drink- ing and the prevention of obesity. In the beer cave, the incredible growth of craft beer is beginning to slow, and retailers face generational differences in preferred types of beer and malt beverages. The bad news is that c-stores are not immune from these widespread changes. The good news, though, is that the beverage business is not at a crisis point, and conve- nience stores, perhaps more than any other retail channel, are well-positioned to defend against category declines. C-store customers are predisposed to buying beverag- es. In fact, purchasing beverages is the foremost reason shoppers visit a convenience store — 98 percent of con- sumers recently surveyed by CSNews cited purchasing beverages as the driver that brought them to the store. To be a beverage sales superhero, c-store opera- tors must continually adjust their beverage offerings to give customers what they want — and what they don't yet know they want. Creative flavors, better-for-you beverages, and putting the power in consumers' hands through customization are among the top ways c-store retailers can triumph in the end. Cover Story By Angela Hanson & Melissa Kress

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