NACS President and CEO Henry Armour said it best at this year’s NACS State of the Industry Summit: “You have to run a business very differently in an inflationary environment, and you learn quickly that focusing on dollar metrics is a fool’s errand. The focus has to shift to units.”

Inflation had a major impact on the products convenience stores sold in 2022 and continues to do so in 2023. Although sales were strong for the top six merchandise categories, with the exception of cigarettes, NIQ data revealed that units were down for packaged beverages, cigarettes, beer and candy. The only category to increase units was salty snacks. 

In-store trips are on the rise again, which is fantastic news. The average basket—what customers spend per visit—increased 4.9% to $7.52 in 2022. Convenience retailers can keep this momentum going by stocking the products their customers are looking for, or better yet, the products that people didn’t know they wanted until they saw them in their favorite c-store. 

Now that we’re halfway through 2023, we can use 2022 insights not as a look back but to show us where we sit now and the situation heading into 2024. With that in mind, we dive into the top brands that can help drive trips and bigger baskets, and ultimately let you do what you do best: excite and delight your customers. 

Data for the six top merchandise categories throughout this article is from NIQ (formerly NielsenIQ) and based on total convenience sales for 2022. This data reveals the brands that are driving category growth within the biggest convenience store merchandise categories.

BEVERAGES

The average convenience store has eight to 12 cooler doors dedicated to beverages, including alcoholic beverages. Larger 8,000-square-foot to 10,000-square-foot formats may have even more space for beverages, as well as a walk-in beer cave. This industry is serious about refreshments. 

Packaged Beverages

We could argue that no other retail channel is a destination for packaged beverages quite like convenience retail—and we’d likely win. 

In 2022, the industry experienced a significant sales increase for packaged beverages on a consistent month-over-month basis, with 2022 coming in 10.1% higher in sales than 2021; however, unit sales were down about 1%. 

NIQ data shows that the top 11 packaged beverage brands accounted for 58% of sales. There are more than 2,000 total brands available in the c-store space, giving customers ample choice for refreshments. 

Notice the top two brands are Red Bull and Monster. Could energy drinks be the new morning coffee? A bit of a spoiler alert, but the answer may be yes, according to heatmap data by PDI Insights Cloud that you can access in the NACS SOI Report.

Beer

The top 11 brands accounted for 73% of beer category sales in 2022, with more than 2,000 total brands selling in the c-store channel, according to NIQ. 

If you haven’t been paying attention to imports like Modelo and Corona, it’s time to start looking for cooler door space. Mexican lagers have been driving the imported beer subcategory the past few years. Unit sales for Modelo were up more than 19% in 2022, while Corona had an 8.3% increase.

Although conversations around flavored malt beverages tend to include the word “saturation,” it’s a different conversation with hard seltzers. The top two brands, White Claw and Twisted Tea, saw double digit increases in unit sales in 2022. 

SNACKS

Convenience stores are where the residents of Snack Food Nation lay their head at night.

According to Mondelez International’s 2022 State of Snacking report, globally 71% of consumers snack at least twice a day, and more consumers are replacing meals with snacks. 

Consumers are also loyal to their favorites. The Mondelez report found that six in 10 (61%) people will go out of their way to find their favorite snack, while a similar percentage (63%) would pay extra to bring back some of their favorite childhood snack brands. Also, the top brands are winning: two-thirds (65%) of snackers prefer brand-name snacks to store brand or generic ones.

Salty Snacks

Bold flavors, redonkulously hot and spicy flavors, tangy, salty, traditional, cheesy, barbecue—you name it, the salty snacks category has it. 

In 2022, salty snacks was the only top six merchandise category that saw both sales and unit increases year over year, with units up by 2.8%. 

There are more than 1,500 salty snacks brands selling in the convenience store space, and the top 11 brands cited by NIQ make up 57% of category sales. Frito-Lay dominates the top products, with the top two potato chip brands, Lay’s and Ruffles. Potato chips have historically been the dominant salty snacks subcategory at about 40% of overall category sales. 

What’s impressive is that every top 11 salty snacks brand was up in both sales and units, except for a very—and we mean very—slight dip in unit sales for Fritos. 

Candy

The top 11 confection brands were responsible for 63% of c-store sales, with more than 1,600 brands selling in the channel. 

Let’s talk about seasonal opportunities for confections. The standout subcategory for convenience stores in 2022 was novelties/seasonal candy. This subcategory is growing at a faster rate than all other candy subcategories, with the obvious spikes around Valentine’s Day, Easter, Halloween and the winter holidays in November and December.

Here’s some advice from candy suppliers: Get ahead of the game and get your orders in a few months prior to the holiday selling period. Also, don’t be afraid to be the first to drive excitement among consumers who cannot wait to get their hands on their favorite holiday-inspired treats. Case in point: Pumpkin spice everything doesn’t wait for the fall. 

One trend that continues to live on is strong sales of gummies, and no shape or animal is off limits to being gummified. Gum is also making a comeback, a subcategory that suffered a bit during the pandemic. Now that more people are buying coffee again, going to work again and communicating closer than six feet again, they’re remembering the refreshing role of gum and mints. 

Alternative Snacks

The alternative snacks category first cracked the top 10 list of in-store categories in 2017 in terms of gross profit contribution. These products appeal to customers who are looking for a healthier option or a protein-rich snack, as well as an energy boost or meal replacement. 

Inflation clearly impacted the category in 2022: The average unit price for alternative snacks was up 7.9% and sales were up 3.8%, but units were down 3.8%, according to NIQ data.

According to NIQ, half of the category’s sales come from meat snacks, which is consistent with NACS State of the Industry data (50.6%). Health/energy bars from brands like Clif and Kind, which saw unit sales increase in 2022, are no strangers to new flavors and pack sizes. These types of product introductions appeal to on-the-go consumers who are looking for a healthier alternative to traditional candy and salty snacks offers or a snack with sustenance until their next meal. 

CIGARETTES

Is Don Draper in the house? The story with cigarettes takes an interesting turn with Lucky Strike—a 131.7% unit change from 2021-2022. That level of unit change is something to keep an eye on, especially after you read the next sentence. 

In 2022, convenience stores saw a -3.2% sales change year over year for cigarettes, which was also accompanied by a unit change of -7.5%, according to NACS State of the Industry data. The top 11 brands accounted for 66% of sales; more than 150 total brands had sales in the channel.

Regulation at every level can impact how retailers sell cigarette products. In April 2022, the FDA proposed a ban on the sale of all menthol cigarettes and all flavored cigars in the United States. California enacted its own menthol ban in December 2022. 

The opportunities for smokers to smoke could be a factor, especially if they’ve returned to work. Working from home had its perks for smokers, while being back in an office environment may mean less chances for a smoke break. But does that cause people to smoke less? It’s a consideration, but the jury is still out.