The right to sell alcohol was a hard-won battle for forecourts. So it’s perhaps surprising that, having gone to the trouble of gaining a licence, so many forecourt retailers are content to let their beers, wines and spirits (BWS) section take a passive role in the product mix rather than making it stand out and seduce.
That could be a mistake and risks losing sales to rival convenience operators, especially with the sector as a whole outperforming the market. BWS sales in the year to January 3 were ahead by 1.8% according to Nielsen, but sales in convenience stores grew by 5.5% over the same period and now account for over a third of all BWS volumes.
Every BWS sub-category is in growth in convenience with light wine a declining market overall in the past couple of years the fastest growing of the lot.
Best practice around making good things happen for your BWS revolves around stocking big brands or well-known cash and carry exclusives and paying attention to convenience-friendly promotional mechanics like price-marked packs. But that doesn’t have to be the end of the story. Some forecourts have pushed things to the next level to drive the maximum possible profits from the alcohol category.
The Spar Parkfoot forecourt at West Malling in Kent had a major refit in 2013 with an expanded BWS section to include banks of energy-saving chillers for white wine, lager and cider.
Owner David Charman says: "We have Spar’s Everyday Low Value deals on brands like Gallo and Blossom Hill, but we’ve also got higher value wines and beers at good prices that aren’t going up and down from week to week."
BWS accounts for 20% of total sales and the store focuses on well-known brands in all product areas but these are accompanied by products that take it beyond the run-of-the-mill convenience offer. One of the stand-out elements in the BWS range is the number of, and promotional weight behind, local products from bigger producers such as Shepherd Neame to smaller brewers and winemakers. There’s even Nip For The Hip, a locally-made range of flavoured vodkas which is only otherwise sold in farmers’ markets.
"We’re selling 15 times more ale than we did in the old store," says Charman. "We’re big on local beers and ciders and a lot of them are things you won’t find in the supermarkets around here, like Westerham, Trafalgar and Chatham.
"There’s little point in selling something that Tesco and Asda sell cheaper than us. We’ve also got a permanent three-for-£5 on Shepherd Neame beers which we source direct. Our Spar wholesaler Blakemore gives us access to 200 brewers in all and we can order a single case if we want."
There are little details that help to drive sales too, like fresh limes merchandised with Mexican beer, that aren’t always evident in c-stores.
Sunny Bhurji, head of trade marketing at Stella Artois and Corona supplier AB-Inbev UK, endorses this approach.
"Cross-merchandising works really well if there is a strong link between the products," he says. "Retailers should work their products around key events beer and crisps during key football games, beer and barbecue products during the summer, and beer and pizza for a sharing occasion with friends.
"Retailers should also try to create associations with products to increase basket spend, such as positioning Stella Artois the official beer of Wimbledon next to strawberries and cream.
"They don’t need to be a multibuy deal but merchandising next to each will drive the association."
The advice of leading suppliers shouldn’t be underestimated in helping to improve your BWS aisle. Several leading players have schemes to help retailers navigate the minefield of brand selection and space allocation, though these should always be approached with caution given the opportunity they provide for suppliers to push their brands.
Heineken whose portfolio includes Strongbow, Bulmers, Foster’s and Kronenbourg 1664 increased the store coverage of its Star Retailer scheme by a third last year and now claims to reach a quarter of the convenience retail market.
Richard Campbell, category development manager, said the scheme had so far added 12% to participants’ collective sales, an average of £5,500 per store annually.
"It’s not just about a bit of free stock," said Campbell, "it’s about category growth. Furthermore, 83% say they have seen an increase in spend across the whole store."
Big brand owners in spirits also point out the importance of getting the basics right. Patricia Mota, category development manager for convenience at Smirnoff and Baileys supplier Diageo GB, points to price-marked packs, a range of bottle sizes and targeting gift shoppers as key areas to focus on to build spirit sales.
Gifts, in particular, can drive higher basket spends. "Consumers say they are more likely to buy a cheaper brand for a party and spend more on a premium brand for a gift," she says. "There is a massive opportunity to increase sales by focusing on gift occasions."
Premium spirits are one of the big growth areas in BWS and offer retailers another route to look beyond the big brands and represent localness in their ranges, particularly with the emergence of dozens of craft gin distillers across the UK, such as Warner Edwards and Cambridge across central England; Langton’s and The Lakes in the North; and Brighton, Sipsmith and Portobello Road in London and the South East.
Craft beers are also a big trend that shouldn’t be ignored. Latest Nielsen figures put niche ale ahead by 23.5% year-on-year and niche lager up 17.7%, while value lager was down 7.2% and classic lager more or less flat.
Wine traditionally offers one of the best opportunities to trade up, and Shaun Heyes, business sector controller for impulse at Treasury Wine Estates, whose wine brands include Lindemans, Wolf Blass and Rosemount, says wine purchasers stay longer and spend more in convenience than average shoppers.
He urges forecourts not to be tempted to race to the bottom on price, but to tier the wine range across higher price points.
He says: "Many forecourt retailers tend to focus their wine offer on entry level wines to deliver value for money, but miss out on the huge opportunity presented by shoppers who are willing to pay a bit more for quality.
"Sales of wine within the £6-8 price bracket are growing by 5% year-on-year in impulse, but make up almost 28% of all wine sales as more consumers choose to treat themselves to a higher priced wine. Larger forecourt retailers can capitalise on the meal-for-tonight shopper mission by offering link deals including food and a bottle of wine."
big Brand News
There is no shortage of new products to pep your BWS aisle in the coming months.
Elderflower and peach have joined AB-Inbev’s Stella Artois Cidre line-up for the summer and Carlsberg has added apple burst, cranberry and blackberry to its Somersby cider portfolio.
Zesty blood orange has joined the Bulmers range of fruit ciders at Heineken, which has also introduced Desperados red, a line extension of its tequila-flavoured beer brand that comes with added guarana and the Brazilian spirit cachaça.
SHS Drinks also hopes to see red do well this year in the form of a new 70cl bottle for its WKD red ready-to-drink brand. The category-leading brand is launching it exclusively to independents through cash and carries with specially flashed cases carrying six x £2.99 price-marked packs.
Flavours are also on-trend in spirits with new launches in 2015 including Diageo’s Pimm’s strawberry with a hint of mint and Lamb’s spiced cherry rum from Halewood International. The Pimm’s product also comes in a single-serve canned premix.
In the wine category, Californian producer Gallo is heading into lower-in-alcohol territory with a Pinot Grigio flavoured with pineapple and passionfruit and a Grenache rosé with raspberry and lime, both at 5.5% abv under the name Gallo Family Vineyards Spritz.