Convenience retailers and consumers alike are operating with the mindset that the worst of the pandemic is behind us. That confidence showed up in NACS State of the Industry (SOI) data for 2021, which revealed that inside-store sales grew 8.7% year over year to $277.9 billion. When it comes to the products powering inside c-store sales, the tried-and-true brands are holding their own, while some newer entrants are on the rise.

With the help of total U.S. convenience data from NielsenIQ, this month we look at the brands driving category growth plus new entrants that have popped up in the rankings in the first quarter of 2022. The majority of the names comprising the top 11 of the leading categories in the convenience channel are well-known, and category managers would not be surprised that brands like Anheuser-Busch InBev’s Budweiser, for example, dominated the beer category or that Hershey’s continued to lead the candy category on a product share basis in 2021. That said, some notable movement in the rankings within some of the categories provides some excitement and novelty.

In 2021, merchandise sales in convenience stores posted solid growth of 6.4%, driven by packaged beverages, up 14.4% year over year, NACS SOI data for 2021 indicate. The center-store categories of candy, salty snacks, packaged sweet snacks and alternative snacks all saw sales increase by double-digits compared with 2020.

NACS Research ranks center-store convenience top categories by gross margin contribution. Top margin center-store contributors for 2021 include: 

 PACKAGED BEVERAGES

In 2021, packaged beverage sales grew 14.4% year over year on a per-store, per-month basis, NACS SOI data indicate. Gross margin contribution rose to 23.26%, up from 22.06% in 2020. The category ranked No. 1 for inside gross profit contribution ahead of prepared food in 2021 and was No. 2 in inside sales.

Energy drinks have powered growth within the packaged beverages category during the past two years and dethroned carbonated soft drinks in 2020 as the top contributor to category sales. That trend held in 2021 as energy drinks contributed 26.8% to the packaged beverages category and saw sales increase 14.4%.

Three of the 11 best-selling packaged beverage brands in the convenience channel last year were energy drinks: Red Bull, Monster and Bang. Red Bull continues to lead packaged beverage category sales, with a 16% year-over-year sales increase and a 15.9% rise in units compared with 2020.

Monster Energy slipped into the No. 2 spot for 2021, bumping Coca-Cola. The Monster brand saw a 10.2% rise in sales and a 9.4% rise in units in 2021, while Coca-Cola sales grew 2.5% and units edged lower. Bang, made by Vital Pharmaceuticals, is still growing, increasing its ACV (all commodity volume) distribution to 95.5% for 2021, compared with 89.8% for 2020.

Gatorade, owned by PepsiCo, was the leading sports drink in the channel for 2021, with sales up 14.8%. BodyArmor, owned by The Coca-Cola Company, enjoyed impressive growth as sales climbed 37.3% and units increased 31.7% in 2021. Starbucks’ bottled coffee was the sole coffee drink among the NielsenIQ top 11.

It’s no secret that supply chains are stressed, particularly for packaged beverages, which are important drivers of trips to convenience stores. In the first quarter, those stresses showed up in the NielsenIQ product rankings as all but Red Bull, Monster and BodyArmor lost units. 

  CIGARETTES AND OTP

Tobacco remains a key category for the convenience store channel, and it’s one that benefited mightily during 2020 as people worked from home. In 2021, cigarette sales edged up 1.2% year over year, NACS SOI data indicate. Premium cigarettes made up 80.6% of the category, followed by branded discount cigarettes at 11.4%, subgeneric/ private label at 6.2% and fourth tier at 1.1%.

Within the top 11 leading brands in the category, there was some trading of positions, but Altria’s Marlboro is by far the category leader, dominating sales and ACV, followed by British American Tobacco’s Newport. BAT’s Camel brand climbed to the No. 3 position, bumping Pall Mall, also from BAT, to No. 4. However, all the brands in the top 11 lost units in 2021, and seven out of 11 saw sales decline. Those trends continued in the first quarter of 2022 with a notable exception: BAT’s Lucky Strike appeared in the top 11 with a 200% surge in sales and units.

After a pullback in 2020, the OTP category in 2021 marked a turnaround, with sales up 7.2% year over year amid an 8.1% rise in profits. The category ranked fourth in inside gross profit contribution and fifth in inside sales contribution. Smokeless contributes 38.7% to the category, followed by e-cigarettes at 31.6%, cigars at 22.2%, other tobacco at 4.2%, pipes at 1.8% and papers at 0.9%.

Altria’s Copenhagen remains the category leader, followed by JUUL and BAT’s Grizzly. BAT’s Vuse moved up to the No. 4 slot, with a 57.1% jump in sales and a 37.9% increase in units sold in 2021. Another big gainer was ZYN from Swedish Match, which boosted dollar sales by 43% and units by 42.6% last year. 

BEER

In the beer category, the largest three subcategories all delivered sales growth, according to NACS SOI data for 2021. Premium beer, which accounted for 27.6% of the category’s sales, grew sales 3.4% to a total of $5,609 per store, per month. Gross profits for premium beer also showed strong growth of 9.1% year over year. AB’s Budweiser is ensconced at the top of the leading brands in the category, with nearly 99% market penetration. Sales and units, however, slipped in 2021 as people ventured back into bars and restaurants.

The second-and third-largest subcategories, imports and flavored malt, both had significant gains in revenue and profit, increasing both metrics by double-digits year over year, NACS SOI data indicate. Import sales overall increased 10.0% year over year on a per-store, per-month basis and grew gross profits by 17.1%.

Modelo from Constellation Brands continues to gain market share, with an ACV in 2021 of 87.1% vs. 85.1% in 2020. Corona Extra, also from Constellation Brands, is riding the import wave, too, as sales rose 6.8% and units grew 6.4%.

Flavored malt sales increased 10.7% from 2020, and gross profits were up 16.8%. White Claw hard seltzer from Mark Anthony International is still the go-to beverage in the flavored malt space, with a 4.2% increase in sales and a 12.1% jump in units in 2021. A new brand in the beer category top 11 for 2021 was Boston Beer’s Twisted Tea. The hard tea notched a 25.4% increase in sales year over year and a 19.5% increase in units. 

SALTY SNACKS

In 2021, salty snacks made up 4.36% of inside sales, up 0.24 point from 2020, according to NACS SOI data. Sales per store, per month increased 11.3%, and the category ranked No. 5 in inside sales when cigarettes are excluded. The category also ranked No. 6 in inside gross profit contribution in 2021.

Potato chips led the category, accounting for nearly 40% of salty snacks’ sales. The second-largest subcategory, other salty snacks—which includes items like puffed onion rings, pork rinds, vegetable puffs and potato sticks—saw sales growth of 23.0% year over year.

PepsiCo’s Frito-Lay unit holds all but three of the top 11 leading brands in NielsenIQ’s 2021 ranking. Up-and-comer Barcel Takis, owned by Grupo Bimbo, surged to the No. 5 spot, with a 20.6% increase in sales and an 11.1% rise in units. That’s up from No. 9 on the 2020 list.

Momentum continued into the first quarter as nearly all brands in the top 11 saw growth in sales dollars and units. The Kellogg Company’s Cheez-It made its way into the top 11, along with PepsiCo’s Sabritas brand. 

CANDY

The candy category accounted for 3.5% of inside sales contribution (up slightly from 2020), ranking seventh out of all in-store categories, and accounted for 5.2% of gross profit contribution in 2021, according to NACS SOI data.

Chocolate bars and packs traditionally account for the largest share of candy sales in c-stores, and 2021 was no exception. Hershey’s is the leading brand, followed closely by Mars Inc.’s M&M brand. What’s notable for 2021 was the growth of non-chocolate candy like gummy varieties and sour-and fruity-flavored treats. Breaking into the 2021 top brands rankings was Haribo by Haribo GMBH, Trolli by Ferrara Candy Co., Sour Patch from Mondelēz International and Starburst from Mars Inc.

And denoting Americans’ return to work and social occasions without masks, gum and mints brands—Hershey’s Ice Breakers, Mars Inc.’s Life Savers and Mars Inc.’s Wrigley’s—all landed in the top 11. The fourth-largest sales subcategory in candy struggled in 2020, primarily because of work-from-home and stay-at-home orders. Sales of the gum and mints subcategory rose 15.4%, and gross profits increased 14.3% in 2021. 

ALTERNATIVE SNACKS

Meat snacks like Conagra’s Slim Jims and Link Snacks’ Jack Link’s power the alternative snacks category, which also includes health/energy/ protein bars, granola/fruit snacks and other alternative snacks. Leading the rankings, Jack Link’s increased its dollar sales percentage 21.4% year over year, and unit sales grew 13.4%. Slim Jim, meanwhile, carved out a 4.1% increase in sales, but units dipped 5.1%.

New to the top brands list for 2021 were two meat snacks: No Man’s Land Beef Jerky and Premium Brands’ Cattleman’s Cut. No Man’s Land grew sales 73.4% in 2021, while Cattleman’s Cut sales rose 57.8%. Both have ACVs below 40%, so there’s plenty of market share to grab.

Another new entrant was the Quest brand from the Simply Good Foods Company. Quest’s lineup includes keto-diet friendly protein bars and snacks. Sales rose 23.2% and units increased 19.4% in 2021, and the brand’s solid growth continued in the first quarter of 2022.