By: Rachel Phillips and Christina Carranza | Category Managers

The year 2019 was great for convenience overall. Though fuel sales dollars declined, sales inside the store grew by 2.6%, and convenience saw some of the largest increases to merchandise sales since 2016. In a study of 1046 responses from the GasBuddy app, 51% of those surveyed said that they make purchases at a convenience store at least once a week and 20% make purchases at least once a day. Another takeaway from the study is how health conscious consumers have become compared to five years ago. Nearly half of consumers strongly agree that they have moved toward healthier options in their c-store purchases. Additionally, consumers say they try new items based on discounts or interesting packaging and that 65% of beverage purchases are unplanned prior to reaching the store (CStore Decisions, 2019).

Despite the success of 2019, the first half of 2020 has been difficult for c-stores. Convenience beverage sales were down in almost all categories at the end of June.  Sports drinks volume held steady, but overall it was a jagged decline for the rest of beverage. Due to many states closing or enacting shelter- in-place mandates, consumers made fewer trips out of their homes, thus leading to less fuel demand and less foot traffic for convenience stores (CSNews, 2020). However, according to CSP Daily News, convenience is on the mend from the effects of COVID-19. July saw refrigerated beverage growth levels in line with 2019 for the first time since mid-April.

Juice

Convenience juice demand continues to drop as consumers become more health conscious.  Sugar and added sugar are becoming more of a concern, while many low-calorie and low-sugar alternatives are offering the same nutritional value in the form of added vitamins. Juice demand went up when COVID-19 panic buying commenced, along with most other commodities. However, it has evened out to normal levels after the sharp drop when shelter-in-place orders were issued. 

Tropicana and Simply are the top two juice brands at McLane.

Ready to Drink (RTD) Tea

RTD teas are usually a yearly growth driver for the tea segment that generally stays quite flat. However, last year RTD tea sales dropped a modest 1.1% (Beverage Industry). Despite the 2019 sales drop, they are expected to resume growth as a category and increase sales 4.2% between 2021-2026, or possibly exceed it (Market Watch). As new innovations and players enter the RTD tea industry, demand is likely to increase as the variety and health of offerings expand. 

Consistently, the top RTD tea SKUs at McLane are Arizona. While the 99 cent price point draws in many consumers and a variety of flavors encourage brand loyalty, some c-stores are looking to private label teas for a higher margin and control of price point.

Water

Water demand continues to grow year after year. Between 2013 and 2018, sparkling water grew 118% and is projected to continue growing 74% between 2018 and 2023. As consumers become more health oriented, the water market will continue to thrive. Across all channels, private label waters and private label sparkling waters maximize profit and sales throughout the category as customers and consumers alike strive to find ways to increase value at the store level.

According to Nielsen’s national data, Topo Chico and Perrier made up 48% of the convenience sparkling category last year. These are the top two sparkling water brands at McLane, though San Pellegrino is also a large mover. Many consumers enjoy the textures, unique flavors, and innovations of sparkling waters while also finding it a more interesting replacement for soft drinks than normal bottled water.  Sparkling water is one of the fastest-growing categories in the beverage industry (Beverage Industry).

In addition to the success of sparkling water, the market for still water is still 4.4 times as large. Over the years, bottled water has evolved from something that was only purchased during vacations or on-the-go to a daily consumer staple. As more consumers drink bottled water throughout the day and adapt it into their lives, demand will continue to increase. 

Keep in mind as you look at still water options that water brand awareness and availability varies by region.