c-store landscape analysis 2008

8/7/2019 C-Store Landscape Analysis 2008

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Convenience Channel

Overview1stQuarter 2008

HTBMarketing.com


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The Convenience Channel isImportant to the Beer Category and Beer is

Important to the Convenience Channel

Source: Convenience Store News May 28, 2007

ACNielsen*Does not include Wal-mart

Convenience71.9%

Food/Drug/Mass*28.1%

Off-Premise Beer Sales

20%

27%

18%

46%

36%

53%

0% 10% 20% 30% 40% 50% 60%

8+ TRIPS

5-7 TRIPS


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$569.4 $577.4

$0

$100

$200

$300

$400

$500

$600

2006 2007

Total Convenience Store Industry Sales

In 2007, Convenience Store Industry SalesIncreased $8 Billion Or 1.4%!

BILLIONS OF DOLLARS/PERCENT CHANGE

+15.0% +1.4%

20072006

Nielsen & NACS State of the Industry 2007

Imports

$3.4

$4.8

$0

$1

$2

$3

$4

$5

Total Convenience Store Industry Pre-Tax Profits

In 2007, Convenience Store Industry Pre-TaxProfits Decreased $1.4 Billion Or 29.2%!


-29.2%

20072006

-19.1%


$7.6

$6.6

$0

$2

$4

$6

$8

2006 2007

Industry Credit Card Costs

2007 Convenience Store Industry Credit Card Costs($7.6) Were Greater Than Pre-Tax Profits ($3.4)!


+22.2%

+15.2%

20072006


145,119 146,294

0

50,000

100,000

150,000

2006 2007

At End Of Year 2007, The Number Of Convenience StoresHad Increased By 1,175 Or .8% from 2006!


Number of Convenience Stores

20072006

+3.2% +0.8%

Convenience Store Fact Sheet


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Premium is the Industry Segment Leader inC-Store, Supermarket, Drug and Liquor Channels

36.0

42.5

56.1

21.3

17.1

20.9

22.0

11.1

7.2

6.3

5.5

47.8

9.3

21.0

33.6

2.7

1.6

10.7

4.1

3.7

6.7

2.5

6.2

4.1Package Liq

Drug

Supermarket

C-Store

Premium Sub-Premium Imports Micro Specialty A/O

$ Share of Category

$ Sales % Change YA

$ Share of Category

$ Sales % Change YA

$ Share of Category

$ Sales % Change YA

$ Share of Category

$ Sales % Change YA 0.0 -4.1 -5.9 +11.3 +9.7 -4.9

+3.8 -4.6 +1.8 +10.3+21.8+1.7

Not available

+1.7 +2.5 +3.1 +13.4 +17.3 -2.0

BeerCategory

NA

+3.6

+2.1

-1.1

Sources: IRI InfoScan, 1st Quarter 2008 (13 Weeks Ending March 30, 2008) for TUS Supermarket, TUS Drug and TUS C-StoreIRI InfoScan RMA Sum of Total Liquor Stores, 1st Quarter 2008 (13 Weeks Ending March 30, 2008) for Package Liquor

1st Quarter 2008 Segments by Channel(13 Weeks Ending March 30, 2008)


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In-store

30%

Motor

Fuel

70%

Industry Sales MixIndustry Sales Mix


Gross Profit Dollar MixGross Profit Dollar Mix

In-store merchandise continues to make up over two-thirds of the industrysgross profit dol lars, on slightly less than one-third of the industry sales

Although Motor Fuel Generates Higher Sales,In-store Merchandise Generates More Gross Profit

Although Motor Fuel Generates Higher Sales,In-store Merchandise Generates More Gross Profit

Motor

Fuel

32%

In-store

68%


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Beer Is The Biggest Category

In The Cold Vault!

Dollar Sales

Average Sales per Store - Convenience Channel

Calendar 2006$243,372

$116,413

$16,598 $14,221 $13,812$13,142 $5,615 $1,947

$61,624

Total

Beverages

Beer Traditional

CSD

Bottled

Water

Juice/Juice

Drinks

Sports

Drinks

Alternative

Beverages/

Energy

Drinks

Iced Tea All Others

48%

25%

7% 6% 6% 5%2% 1%



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Malt Liquor

2.9%Non-Alcohol

0.1%

Non-Beer

3.3%

Micro

1.6%

Specialty

4.1%

Popular

9.6%

Budget

11.2%

Imports

11.1%

Premium56.1%

Premiums Remain The Bulk Of The Business,Representing Nearly 60% Of Category Dollar Sales

Source: IRI InfoScan (AllScan) Total U.S. C-Store, 1st Quarter 2008 (13 Weeks Ending March 30, 2008)

Price Segment Dollar ShareConvenience Channel 1st Quarter 2008


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$874,817,900

$393,790,500

$244,952,800

$233,876,200

$170,237,200

$122,071,700

$98,475,930

$89,285,460

$85,533,270

$66,594,720

$60,073,280

$57,411,280

$47,953,060

$47,743,560

$31,532,360$31,133,150

$29,247,630

$25,064,030

$23,515,200

$22,605,800

Bud Light

Budweiser

Miller Lite

Coors Light

Natural Light

Corona Extra

Busch

Busch Light

Heineken

Miller High Life

Keystone Light

Michelob ULTRA

Natural Ice

Icehouse

Modelo EspecialSteel Reserve

Bud Ice

Budweiser Select

Miller Genuine Draft

Michelob Light

The Top 20 BrandsAccount for 83.0% of

Category Dollar Sales inthe C-Store Channel


Dollar Sales

The Top 20 Brands in the C-Store Channel


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$138,584,500

$136,813,000

$131,062,800

$75,071,850

$66,308,670

$65,790,080

$65,627,530

$62,285,170

$56,194,950

$52,981,600

$48,446,940

$46,202,490

$45,328,860

$43,024,480

$42,044,350$41,087,790

$40,974,580

$39,476,760

$37,003,630

$36,810,920

Bud Light 12-Pack 12oz LNBTL

Bud Light 18-Pack 12oz CAN



Corona Extra 12-Pack 12oz LNBTL

Budweiser 12-Pack 12oz CAN

Bud Light Singles 24oz CAN


Budweiser 18-Pack 12oz CAN

Natural Light 12-Pack 12oz CAN

Miller Lite 18-Pack 12oz CAN

Coors Light 18-Pack 12oz CAN

Budweiser Singles 24oz CAN


Coors Light 12-Pack 12oz CANBudweiser 12-Pack 12oz LNBTL

Miller Lite 12-Pack 12oz CAN




The Top 20 PackagesAccount for 38.3% ofCategory Dollar Salesin the C-Store Channel

Dollar Sales


The Top 20 Packages in the C-Store Channel


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Shopper and Consumer Insights


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Source: ABI Shopper Poll, 2003-2007YTD, Total US

Versus all Beer shoppers, loyal C-Store Beer shoppers skew male,younger (21-34), Blue Collar, lowerincome, and non-Anglo.

Convenience Store Beer ConsumerDemographic Profile

Males

Females

21-27

28-34

35-49

50+

Blue Collar

White Collar

Gray CollarStudent 21+

Other Collar

Under $15K

$15K-$34K

$35K-$49K

$50K-$79K$80K+

Anglo

African American

Latino

Asian

27%

30%

20%

34%

15%

36%

13%

30%3%

18%

11%

26%

17%

25%22%

13%

16%2%

70%

73%

All Beer Shoppers

Most Often BuyBeer in C-STORE


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The Number Of Core Beer Consumers IsExpected To Continue Growing,

Generating Greater Category SalesAfter bottoming out in the late 1990s, the core 21-27 year old beerconsumer demographic is projected to grow through the year 2010!

Source: 2000 U.S. Census

23

24

25

26

27

28

29

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

Age 21Age 21 -- 2727

Population(M

illions)

Population(M

illions)


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Population Breakdown by Age Groups

20

30

40

50

60

70

80

90

100

110

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Million

21-27 28-34 35-49 50+

Projected Population by Age Group1990 - 2015

The Highest Growth Rate is Projected for Age 50+Source: U.S. Census


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C-Store Beer Trip Facts

36%

1%

0%

38%

1%

0%

62%61%

Quick Trip

Special Purpose

Fill In

Pantry Stocking

In C-Stores, address the need states of these shoppers & trips:Make Quick Trip shopping easy with the right flow and category adjacencies

Use merchandising and cross-promotions that will resonate with Quick Trip BeerShoppers (i.e. snacks, other beverages)

% of Beer Dollars

% of Beer Trips

C-Store Trips With Beer in Basket

Source: IRI Trip Typology Study 2007; A-B In-Store Intercepts, 2006

TRIP TYPE DEFINITIONS: Quick Trip 1-3 Items; Under $20: Special Purpose Trip around 5 items; $30-$50; specific purpose/occasion:Fill-In Trip 10-15 items; $50-$80, replenish: Pantry Stocking Trip over 15 items; over $80; large, planned trip

Quick Trips w/Beer:

60% are in the store just for Beer

64% pf trips are for short-term consumption at home

Cold Beer and convenient location drive the store choice

Bud Family (37%), Coors Light (6%) or Miller Lite (4%)

12-packs (32%), Singles (29%), 6-packs (25%)

Beer Trip Characteristics


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Beer Shoppers Are Beer ConsumersBeer Shoppers Are Beer Consumers

Who Are C-Store Shoppers?Who Are C-Store Shoppers?

The vast majority of beer shoppers are also beer consumers,C-Store beer shoppers are no exception

Source: ABI Shopper Poll, 2005-YTD 2007, Total US

7%

93%

DrugStore

6%

94%

LiquorStore

6%

94%

C-Store

9%

91%

Grocery

11%

89%

WarehouseClub

11%8%Shopper Non-Consumer

89%92%ShopperConsumer

MassMerch

AllChannels


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95%

83%

82%

81%

81%

68%

14%

4%

4%

3%

8%

4%

3%

16%

26%

83%

5%

16%

15%

15%

Convenience

Package Liquor

Grocery

All Channels

Mass Merchandise

Drug

Wholesale Club

Cold Warm - On Display Warm - Not On Display

Cold Vs. Warm Beer Purchasing Total Beer Shoppers By Channel

Source: ABI Shopper Poll, 2007, Total U.S.

The Beer Purchase Decision

Where available, beer shoppers overwhelmingly likely to purchase beer cold.This is especially true in the Convenience Channel with cold beer salesrepresenting 95% of total beer sales


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Beer Shopper Mindset by ChannelBeer Shopper Mindset by Channel

63%

49%

38%

20%

12%

11%

37%

51%

62%

80%

88%

89%

C-Store

Drug

All Channels

Grocery

Mass Merch

Club

Primary Reason Beer Primary Reason Other Items

70%

67%

62%

59%

56%

56%

22%

28%

29%

21%

22%

32%

8%

4%

9%

20%

22%

13%

Drug

C-Store

All Channels

Club

Mass Merch

Grocery

Pre-Planned Beer, Brand, and Size Decided Brand and/or Size In Store

Purchased Beer on Impulse

Retailers have a bigopportunity in Beergiven its destinationnature, especially in C-Stores and Drugstores.

The biggestopportunities for in-

store influence are inGrocery, Mass Merch,and Clubs.

Source: ABI Shopper Poll, 2003-2007YTD, Total U.S.

Reason for Going on Shopping Trip

Planned vs. Impulse Beer Purchasing


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Beer Shoppers Spend More Per Trip ThanTotal Convenience Shoppers

35%

24%

18%

9%

15%

9%

13%

14%

16%

48%

Less than

$2.00

$2.00 - $3.99

$4.00 - $5.99

$6.00 - $7.99

$8.00+

Total Shoppers

Beer Shoppers

64% of Convenience Beer Shoppers Spend $6.00 or More PerTrip, Compared to 24% of Other C-Store Shoppers!

Dollar Amount Spent on Items Inside the C-Store(excluding gas & automotive)

Source: Meyers C-Store Close-Up Study, 2006


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20%

27%

18%

46%

36%

53%

0% 10% 20% 30% 40% 50% 60%

8+ TRIPS

5-7 TRIPS


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Fridays and especially Saturdays are the key beer purchasing days across all channels

0%

5%

10%

15%

20%

25%

30%

35%

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

All Channels Grocery C-Store Warehouse Club Liquor Store Mass Merch Drug Store

Beer Purchasing By Day Of WeekBeer Purchasing By Day Of Week


Beer Purchasing Behavior


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C-Store beer purchases skew higher than the average of all Channel at 6pm

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

12:00

AM

1:00

AM

2:00

AM

3:00

AM

4:00

AM

5:00

AM

6:00

AM

7:00

AM

8:00

AM

9:00

AM

10:00

AM

11:00

AM

12:00

PM

1:00

PM

2:00

PM

3:00

PM

4:00

PM

5:00

PM

6:00

PM

7:00

PM

8:00

PM

9:00

PM

10:00

PM

11:00

PM

All Channels C-Store

Beer Purchasing By Time of DayBeer Purchasing By Time of Day


Beer Purchasing Behavior


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48%

17%

17%

4%

2%

7%

6%

Grocery

Liquor Store

C-Store

Mass Merch

Wholesale Club

Drug Store

Other Channel

All Beer ShoppersLatino Beer Shoppers

Stores Where Latinos Most Often Buy Beer

Source: ABI Shopper Poll, 2004-2007, Total U.S.

Latino Beer shoppers skew more towards C-Stores for their beer purchasescompared to All Beer Shoppers!

Latino Beer Shopper InsightsLatino Beer Shopper Insights


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Latino shoppers take more timeshopping the beer section before or aftermaking a selection, whereas, Mainstream

shoppers are more likely to have a Grab& Go beer shopping style.

68%

44%

21%40%

7% 14%

Mainstream Beer Shoppers Latino Beer Shoppers

Selects beer but returns and makes a different selection

Selects beer and then further browses the section

Browses the section and then selects beer"Grab & Go" (selects at once & does not linger)

How Shoppers Select Beer

Latino Beer Shopping ProcessLatino Beer Shopping Process

Source: ABI Latino C-Store Beer Shopper Research


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Source: ABI Shopper Poll, 2004-2007, Total U.S.

44%

13%

31%33%

7%

9%

4%

2%

56%

Can

Bottle

Single

6-Pack12-Pack

18-Pack

20-Pack

24-Pack

Other Pack

All C-Store Beer Shoppers

Latino C-Store Beer Shoppers

Last Purchase Beer At C-Store: Package Size Comparison

Latino C-Store beer shopperscommonly purchase 6- or 12- packs

and are more likely than the average C-Store beer shopper to buy bott led beer.

Latino Shopper Purchasing BehaviorLatino Shopper Purchasing Behavior


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Summary

In-store merchandise is almost two-thirds of C-Store gross profit

dollars on slightly less than one-third of the industry sales

The top 10 categories in C-Stores account for 89% of in-store dollarsales

In beer selling stores, beer ranks #2 in product category sales and is

the largest selling item in the cold vault

C-Store beer shoppers are critical to driving traffic and buildingtransaction size, as beer shoppers spend more per trip than the

average C-Store shopper

Being in-stock, especially on weekends, is critically important to

reduce out-of-stocks and maintain customer satisfactionThe premium segment accounts for 56.2% of beer dollar sales in the

Convenience Channel

c-store landscape analysis 2008

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