At CD’s Quik Mart in Hopkins, Michigan, 30-packs of Busch Light are a popular item. But due to the space constraints of the typical convenience store beer cooler, the store hadn’t been able to fully stock the pack size to meet customer demand.

So owner Chris Kerber installed a 300-square-foot beer cave in the store. That was about eight years ago, and today, CD’s can chill as many as 40 30-packs of Busch Light, up from the two or three that an average beer cooler can accommodate. Moreover, due to the strong response to the cave from customers, beer sales at the c-store have dramatically increased. “The cave paid for itself in the first year,” Kerber reported.

Kerber isn’t the only c-store operator to discover the power of beer caves. According to a recent report from iSee Store Innovations, a designer and manufacturer of retail merchandising solutions, about 20% of all c-stores—or between 30,000 and 40,000 locations—feature beer caves.

Joe Vonder Haar, iSee’s CEO and founding partner, said major chains like Sheetz, Circle K and Wawa are installing beer caves in most new store builds, while smaller companies like Wallis Companies and Alta/Petro-Mart are also big supporters of the refrigerated spaces. “Beer caves allow c-stores to be competitive with big box retailers down the street,” Vonder Haar remarked. And because they range in size from 8 feet by 8 feet and up, even stores with a small footprint can install a beer cave, he noted.

Among the findings in iSee’s State of Beer Caves report, which cited data from a study completed by Bump Williams Consulting Co., a beverage consulting firm:

Installation costs range from $15,000 for an 8-by-8-foot cave to more than $75,000 for a 20-by-20-foot cave. Stores with beer caves see foot traffic increase by 35%. Average shopper baskets increase by $6 per customer in stores with caves. Caves allow c-stores to enhance their assortment and variety at a time when new brands, flavors and packages continue to proliferate. Beer caves can prevent out-of-stocks on readily available cold beer. Caves free up space in cold vault doors for highly profitable single cans of beer. Caves drive valuable cross-category purchases.

David Garcia, national accounts vice president, convenience, at Molson Coors Beverage Co., agreed that beer caves can be a valuable feature for c-stores. “Beer caves offer the opportunity to maximize your sales across all brands and pack sizes, increasing traffic to your store, and increasing your sales versus grocery and liquor stores in your area,” he said.

Caves can be highly effective in motivating customers to make purchases, added Garcia, noting, “once inside the cave, eight out of 10 shoppers make a purchase.” Indeed, stores with a beer cave sell 46% more beer, the Molson Coors executive said.

“Beer caves allow us to carry more assortment than your average c-store.”

Expanded Assortment

According to an array of c-store operators—from major chains to single-store managers—the primary benefit of beer caves is exactly what you might expect: the ability to stock more beer.

“Beer caves allow us to carry more assortment than your average c-store and more inventory on high-velocity packages so they remain in stock,” said Corey Viglotti, senior category manager at RaceTrac. Some 240 of the chain’s more than 580 stores feature beer caves, she reported, adding that “merchandising strategies for the caves depend on store format.”

In markets like upstate New York where craft beer has soared in popularity in recent years, caves allow c-stores to stock a wider assortment of brews. “Customers like that we bring in new beers every day,” said Sunny Patel, manager of Good Guys Convenience & Deli in Plattsburgh, New York. “We even take special requests and try to fulfill all orders.”

Due to the cave’s spaciousness, it can stock virtually any package size, he added, ranging from singles to 30-packs to draft kegs ordered on request.

At CD’s, meanwhile, the beer cave has also been an enormous help in aiding the store’s market for craft beers, Kerber said. The cave—which is reserved for 12-packs and larger—can hold as many as 950 cases of beer, and with the temperature set at 32.9° F, “it’s so cold you can see your breath,” Kerber said.

“The cave paid for itself in the first year.”

The guarantee of cold beer is a big attraction for c-store customers, who are known for their inclination toward immediate consumption. Jake’s Convenience store in Staunton, Virginia, has had a cave for about eight years. According to a store manager, “Customers like that the beer is always cold. They don’t have to wait for us to stock the cold box.”

When it comes to beer in c-stores, the product being “cold tops brand, pack sizes and pricing,” Vonder Haar said. “Cold beer is the single biggest factor for customer satisfaction, which means they come back.” Beer caves are more ideal than the common practice of utilizing case stackings to feed the cold box, the iSee executive added. “Beer caves help prevent out of stocks of cold beer,” he said. “With a beer cave, retailers can live up to the reputation of ‘coldest beer in town.’”

Traffic Driver

With beer a destination category for c-stores, caves additionally help drive traffic, Vonder Haar noted. That’s certainly the case at Hawaii’s Aloha Island Mart, with 50 stores on four of the state’s islands.

“The beer caves at Aloha Island Mart enhance the customer experience by offering a unique, chilled shopping environment and a broader selection of beers, attracting a wider customer base,” said Veronique Nguyen, marketing manager. With high-margin specialty brews merchandised in the caves, the refrigerator units help build the chain’s sales and revenue. “Additionally, they provide a competitive edge,” Nguyen continued, “support local breweries, and ensure product quality through optimal temperature control.” In addition to beer, the caves at Aloha Island Mart stock ready-to-drink beverages, such as hard seltzers and flavored malt beverages.

Though while caves can help drive beer sales, grow traffic and attract new customers to c-stores, the units aren’t without some challenges, including the investment dollars and space needed to erect a cave. Beer caves may not be right for all c-stores, particularly in markets like Indiana and Minnesota where regulations infringe on the ability of the channel to sell cold, full-strength beer.

According to iSee’s State of Beer Caves report, shopper awareness has a big impact on the success of the units in c-stores, as consumers don’t typically associate beer variety with the channel. Quality signage inside and outside of a store, as well as other marketing tools including social media, can go a long way in informing customers about the presence of caves and assortment of product selection.

Vonder Haar, Garcia and c-store operators also cite lack of organization within the beer cave as a factor that can impede the success of the units. “Shoppers get turned off by disorganized, cluttered caves, and by not being able to find the price,” remarked Vonder Haar. “If customers can’t find the product they want or the price of the product, they won’t come back.”

Kerber agreed that organizing a beer cave can be challenging. “Once a few vendors come in and set down their product, it can get very cluttered,” the Michigan retailer noted. Some distributors take the time to set the beer according to a plan, while others don’t.

Communicating with vendors about the organization of the cave can help. Garcia noted that Molson Coors’ “Purpose Drives Purpose” category strategy aids retailers in bringing in a wide assortment to their caves while keeping them shoppable and easy to navigate.

Latest Advances

Vendors of beer cave equipment recommend that whether c-stores are installing the units in brand new stores or as part of remodeling projects, they should consider the latest advances in cave efficiency. The Anthony automatic beer cave door, for example, features a motion sensor on the interior and exterior of the door, allowing for easy two-way traffic.

“Because of the heavy foot traffic near beer caves, operators need doors that are both reliable and offer crystal-clear product visibility to draw people in,” Uri Rainisch, senior product manager for Anthony, said.

Lynn Burge, senior marketing manager at Refrigerated Solutions Group, meanwhile, noted that polyurethane panel insulation is more efficient and reliable than polystyrene in keeping beer cold. “Polyurethane’s greater heat resistant properties mean a refrigeration system doesn’t have to work as hard to keep inside air cold, which saves energy,” she explained. Polyurethane also saves on the upfront cost of refrigeration systems, Burge noted.

Once a beer cave is installed, it’s important for convenience retailers to merchandise the space just as they do other areas of the store. “Use everything in your merchandising toolkit,” said Vonder Haar, including cross-category strategies. The iSee executive pointed to merchandising non-beer items in the cave, ranging from bottled water to wine (where legal) to candy bars and beef jerky to spur impulse sales. He added that c-stores also need to work with their direct store delivery partners to ensure the caves are organized, uncluttered and all prices are clearly visible.

Garcia believes that “simply getting shoppers to realize there’s a beer cave in the store and to check it out” is still the biggest opportunity for the units in c-stores. Noting that only 10% of customers shopping for beer enter the cave, the Molson Coors executive advised, “by making the cave more approachable, engaging and well-lit” and by communicating that they are featured in the store, “c-stores can tap into the beer cave growth opportunity.”