Did independent convenience stores and small grocers do better during the pandemic than traditional wine retailers?
One study suggests that the independents and neighborhood retailers saw wine sales grow more than 40 percent
The biggest news in wine sales during the pandemic has been the tremendous rise in Internet, delivery, and direct-to-consumer – that is, more consumers buying wine from non-traditional retailers. But lost among that surge was another significant change: The growth in wine sales at convenience stores and neighborhood retailers.
Regular readers already know that convenience stores have been one of the few bright spots in wine sales over the past several years. But a study by a company that sells point of sale software to independent convenience stores; mom and pop grocers; and small liquor shops has further reinforced that good news. Same store wine sales for retailers using the National Retail Solutions system increased 44.5 percent between 2019 and 2020, about double the growth for all convenience stores.
Even more intriguing is that its data may show a relationship between younger consumers and wine – not because it’s wine, but because of where these shoppers buy their wine, says the company’s Suzy Silliman, senior vice president of data strategy and sales.
The company’s sales data hints that younger, more affluent, more urban consumers who are less likely to be white are buying wine at small, local retailers. This behavior seems to be pandemic driven; instead of going out for dinner and drinks, they’re walking down to the corner to buy wine to have with dinner at home.
In one respect, this behavior isn’t surprising, since local has been the marketing mantra for anyone trying to reach younger consumers since the Millennials came of age. But I don’t know that there have been any good numbers to prove the point.
Completely different behavior
And this behavior is completely different behavior from their parents and grandparents, who have powered the growth in companies like Total Wine and have helped Kroger become one of the biggest wine retailers in the world. As such, the wine business has made less effort to sell its product to those smaller retailers. What’s the point if Kroger buys everything you make?
So what’s the catch? The numbers, as Silliman points out, are far from definitive. The software doesn’t track demographics, so the assumption that these are younger, more urban consumers is based on where the stores are located and not actual shopping data. In addition, the pandemic may have skewed the statistics in a way no one has ever seen before. If we return to some semblance of normal, will these consumers still buy wine at the shop down the street?
Maybe. Silliman told me that “a lot of behavior becomes habit.“ She says she misses going out to dinner, but that she didn’t realize just how much she enjoyed staying at home, without the idea she had to go out and do something.
“This may have been a forced experiment, with people having to stay at home,” says National Retail Solutions’ CEO Elie Katz. “But I’ve talked to a lot of Fortune 500 companies, and there’s no guarantee that everyone is going back to the office.”
And the numbers that do exist are stunning:
• The 1,221 stores that use the software, mostly on each coast, in Texas, and in the Chicago area, added 800 wine labels to their inventory in 2020. That’s so big a number as to be practically unprecedented. It’s even more amazing when you consider that grocers can’t sell wine in New York state.
• There seems to be evidence suggesting that shoppers asked their local stores to add specific brands, which accounts for all those new wines on shelves. This behavior is markedly different from what happens at a large retailer, which rarely adds wine based on customer requests.
• Sales of high-end Champagnes, including Moet and Chandon, more than doubled. That these stores even carry $50 Champagne speaks to what’s gong on here. The Moet, in fact, was the fifth best-selling wine in dollar terms over the 12-month period.
• The best selling wine was Stella Rosa, a sweet red – but its sales tripled in the process.
• Luc Bellaire, another high-end French sparkling wine, was the third best-selling wine, and its sales tripled as well The wine can cost as much as $15 for a 187-ml bottle.
• And less we think that luxury items wack these numbers out of proportion, the $9 1.5-liter bottle of Barefoot was the third best-selling wine.