For many in the beverage alcohol retail industry, there’s been a host of disappointing developments in recent months, from the Surgeon General’s recommendation that drinks include cancer warnings on their labels to sales setbacks for large marketers and the closing of many craft breweries. But one retail sector seems to be less hard-hit: Convenience stores. Christ Pecat, the director of purchasing at Pride Stores, a chain of 17 convenience stores in Illinois, is grateful that his company has been spared. “Those things aren’t being reflected in our sales,” Pecat says, noting that spirits in particular have been on the rise in Illinois. He cites the premiumization of spirits and continued consumer demand for convenient retail transactions as reasons why the category has strong prospects in his retail sector. “We believe spirits will keep growing,” Pecat says. Eleven of the chain’s stores are licensed to sell full-strength spirits.
Similarly, spirits sales are performing robustly at some 17 Mega Saver c-stores in Nebraska and Iowa, according to a senior executive who declined to be identified. “Spirits sales are increasing a lot,” the spokesperson says, driven by the stores’ vast selection and their ability in recent years to source specialty allocated Bourbons.
While still a small channel for spirits, c-stores have been a top performer of late. According to the Wine & Spirits Wholesalers of America’s (WSWA) SipSource data, for the 12 months ending in November 2024, c-stores were the only off-premise channel to post both volume and revenue growth, at 1.1% and 1%, respectively. “The data highlights a significant consumer trend toward convenience and on-the-go options,” says SipSource director Michael Bilello. “Pre-mixed cocktails and agave spirits are leading the growth.”
Volume of pre-packaged spirits-based cocktails in c-stores soared 15% during the period, Bilello notes, while Tequila and agave spirits jumped 10%. Vodka, the largest spirits type on a volume basis in c-stores, was basically flat, but revenue increased about 2%. The trends signal the “evolving preferences of shoppers in this channel and the critical role of convenience stores in driving overall spirits sales,” he says. According to recent NIQ data, meanwhile, c-stores now account for 12% of off-premise spirits volume sales, following liquor stores at 57% and food outlets at 21%.
Spirits marketers are certainly aware of the gains. “Convenience is a huge channel,” says Clement Pappas, co-founder and CEO of Stateside Brands, marketer of the fast-growing Surfside RTD portfolio. Despite the fact that the sale of spirits in c-stores can face tougher regulations in some states than in other channels, Pappas notes that “more business and consumption has been moving into c-stores. It’s becoming one of the primary channels for beverage alcohol.”
Hannah Venhoff, vice president of marketing strategy at Heaven Hill Brands, adds that while the growth and interest of spirits in c-stores is relatively new, and that marketers are still ramping up their efforts, the trend makes sense. “Today’s consumer is on the go. Convenience becomes more important when making purchasing decisions,” she says. “So, it’s not surprising to see growth in this channel, particularly for products like RTDs and canned cocktails.”
Channel Evolution
Indeed, the emergence of RTDs has been a big contributor to the growth in sales and awareness of spirits in convenience stores in recent years. “From my perspective, RTDs have most definitely fueled the growth of the c-store channel,” says Britt West, chief commercial officer at Gallo’s wine and spirits business units, marketer of top-selling RTD High Noon. He points to data from consulting firm Park Street Imports that more than 40% of all RTD purchases occur in the c-store channel. “At the same time, RTDs have changed the way legal drinking age consumers view convenience stores. Instead of a quick stop to pick up forgotten items, c-stores have evolved into the go-to source for discovering the newest, most sought-after beverages,” West says. C-store shoppers are also loyal and generate massive traffic, adds the Gallo executive, noting, “the average c-store shopper visits three times a week, generating 165 million daily visits.”
high rate of frequency is our plug-and-play model.” Pappas explains that c-stores typically don’t have much storage space and require more frequent deliveries than wine and spirits houses usually provide. For their part, c-store operators are drawn to Surfside because it’s “like beer but with higher rings and higher profits,” the marketer says. Now distributed nationally, Surfside’s key c-store states include Virginia, Florida, Illinois, Arizona, and Nevada.
Gallo and Stateside both see even more opportunity for their RTDs in c-stores with large pack single-serves—700-ml. cans akin to beer’s tall boys. Earlier this year, Surfside launched its 700-ml. “longboard” can aimed at c-stores and stadium venues. High Noon tall boys, meanwhile, are “great for grabbing on the go when you want a larger format, single can for yourself—like at the beach, on the golf course, or at a friend’s backyard barbeque,” West says.
Small-format spirits packages also remain a go-to for many c-store shoppers. At Pride Stores, 50-ml. “nips” are the top-selling spirits package, followed by 375-ml. offerings. At stores that feature nips, up to 50 spirits SKUs are available, Pecat says, with a selection that ranges from Fireball up to single-barrel picks. Small-format offerings of Gallo’s New Amsterdam vodka—including 50-ml., 100-ml., 200-ml., and 375-ml. options—“have experienced particularly high growth” in the channel, West says, “while the 750-ml. core bottle is still performing strong as one of the top SKUs in the category.” Overall, New Amsterdam “has experienced consistent growth in the convenience channel this past year,” West says. At Heaven Hill, Venhoff notes that 100-ml. and 150-ml. bottles of Deep Eddy vodka are strong performers in c-stores.
Pappas credits Surfside’s reliance on beer wholesalers in many markets for the gains the brand has made in c-stores. “We’ve found that beer distributors do a really excellent job of servicing c-stores in a way that wine and spirits distributors historically have not,” he says. “Being on beer trucks with a
Single Barrel Serves
Partnerships in recent years between c-stores and distilleries on single-barrel products surely signal that the channel has developed into a serious competitor within spirits. Casey’s, the mammoth midwestern c-store chain, for example, has teamed up with the Sazerac Co. on several Buffalo Trace special releases. Last year, central Illinois locations offered 375-ml. bottles of the limited Buffalo Trace Single Barrel Select. In 2023, in addition to a private barrel Buffalo Trace offer in Iowa and Missouri, Casey’s teamed up with Sazerac on a Myers’s Rum Single Barrel Select program in Illinois, which featured the Jamaican rum finished in oak barrels previously used for aging Sazerac rye.
Pride Stores have collaborated on barrel picks for about eight years, according to Pecat, with prices ranging from $39-$139 a 750-ml. Partners have included Elijah Craig, Knob Creek, Four Roses, WhistlePig, and BlueRun. The c-store chain has even teamed up with 5 Sentidos on a mezcal barrel pick. “We put up full displays to merchandise them,” the retailer says of the limited-edition products.
With their expanded attention to spirits, c-stores are increasingly gaining access to coveted allocated products. Pride Stores, for example, have expanded their points of distribution for Sazerac products, providing the retailer with a higher chance of receiving bottles of Pappy Van Winkle and the Antique Collection, Pecat explains. When the stores do receive a limited-edition bottle, it’s usually offered for purchase via a customer drawing at sister store The Pride Beer & Wine Plus Spirits liquor store in St. Charles, Illinois. Mega Saver has also scored allocated spirits in the last few years, the chain’s spokesperson says, noting, “the customer response has been great.”
‘In and Out’
Along with an enhanced focus on the category, c-stores are upgrading their merchandising tactics for spirits. While value and mid-tier products like Evan Williams and Black Velvet are top performers in the channel, Venhoff says, “we’re seeing some c-stores elevate the experience by utilizing point-of-sale materials that highlight products.” Moreover, the Heaven Hill executive adds, “traditionally small shelf sets for the spirits category are growing in c-stores, providing incremental options for consumers.”
Merchandising efforts can run the gamut from “two-for” promotions for RTD singles, where legal, to in-store sampling. Grub Mart c-stores in Alabama sell spirits at three of their 11 locations, thanks to separate entrances into the licensed spaces, as per state law, and according to Brian Young, vice president of parent company Young Oil, in-store sampling is sometimes offered. Overall, the stores dedicate between 650-1,000 square feet to spirits, he notes, with Bourbon the top-selling category, and Tequila and RTDs showing the best trends. Three Pride stores with on-premise sales permits also feature spirits tastings, Pecat says.
Still, the c-store business model can provide challenges for operators in managing the spirits category. C-stores are much more limited in merchandising and inventory space than channels like liquor stores, typically resulting in a scaled-down selection and the inability for retailers to buy in on quantity discount offers, where legal. Pecat says that one of the biggest problems with spirits at Pride Stores is the potential for theft. As a result, spirits packages under 750-ml. are merchandised behind the counter, a common tactic at c-stores, but one that can impede the promotion of new products and impulse buys. Venhoff cites “vying for customers’ attention and time” as a bigger obstacle in c-stores than other outlets. “In a liquor or big box store, consumers are spending more time exploring the aisles and price points, aided by aisle violators, shelf talkers, and displays,” she explains. “In c-stores, the objective for customers is to be in and out.”
Convenience store operators already offering spirits see more opportunity ahead. “We plan to increase our selections even more,” says Mega Saver’s spokesperson. At Grub Mart, Young said the chain hopes to include spirits at all new stores. Spirits and RTD marketers are equally enthusiastic. “RTDs are a relatively underdeveloped category,” says Pappas. “We think c-stores are one of the biggest opportunities out there.” Heaven Hill’s Venhoff adds that with all the headwinds the spirits industry is currently battling, “it’s exciting to think about channel development.”