Boston Beer’s C-Store Sales: Opening Convenience Coolers for Craft

The country’s largest craft brewer, Boston Beer Company, is enjoying impressive sales growth in the convenience channel to begin 2013, up over 25 percent through a four-week period ending Jan. 19.

Those numbers, and others, seem to confirm a growing presence for at least the country’s best-established craft beer brands in convenience stores.

In a report released on Monday, investment bank UBS examined beer sales at c-stores from six beer companies, including Boston Beer. Analyzing data provided by global retail sales information provider, A.C. Nielsen Co., the report provided a snapshot of the overall state of beer sales in the convenience channel, which boasts more than 148,000 stores.

In the convenience channel, Boston Beer’s craft brands grew by 15 percent over a 52-week period ending Jan. 19 — and that’s not including its Angry Orchard cider or “Twisted Tea” offerings. That’s also compared to just 4 percent dollar growth in food, drug and other mass market retailers.

While those impressive convenience growth figures are off a small base, according to UBS beverage analyst Kaumil Gajrawala, who wrote the report, they represent a growing part of the brewer’s overall retail picture. Boston beer’s sales are heavily weighted toward channels like grocery, liquor, and other account types — a big difference from the larger beer companies who make up the majority of volume share in convenience.

Nevertheless, as with other channels where craft has made incursions, Gajrawala wrote that he sees “expansion into c-stores as a growth opportunity for the craft(y) players.”

Domestic beer companies like Anheuser-Busch InBev and MillerCoors make up a majority of the volume share in c-stores, but growth for BBC could also be a leading indicator of a shift in both retailer and consumer buying habits.

Danny Brager, the head of Nielsen’s beverage alcohol group, confirmed to that overall beer sales in c-stores were up just 5.1 percent in 2012 while craft beer sales — including crafty offerings like Shock Top and Blue Moon — were up 27.1 percent. In broader retail channels like food and drug, Nielsen pegs sales growth for craft at 18.3 percent.

“Craft is growing faster in c-stores [of course] on a much lower base,” Brager said.

Nielsen statistics are consistent with data supplied to by the Chicago-based market research firm Symphony IRI (SIG). Sales of craft beer in convenience are up 21 percent percent through the 52-week period ending Jan. 27, 2013, according to SIG.

Craft beer sales have been growing steadily over the last five years and the segment has nearly doubled its dollar share during that time. According to the National Association of Convenience Stores (NACS), sales of craft beer rose by 13.9 percent in c-stores in 2011 as well.

It’s a trend that hasn’t been overlooked by the industry’s second largest craft beer producer, Sierra Nevada. At the Brewbound Session business conference last November, Sierra’s national accounts manager of convenience stores presented on the growth of the craft in c-stores. 70 percent of the 148,000 convenience outlets in the U.S. currently sell beer, representing tremendous growth opportunities for craft beer, Jannuzzo said.

Click here to read the complete UBS report.

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