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FOOD AND BEVERAGE FUELS SOLID CHANNEL GROWTH The Australian convenience industry achieved “solid growth” in 2019, according to the latest report from AACS, with the performance of the food and beverage category in particular catapulting the value of the channel. T he 2019 ‘AACS State of the Industry Report’, launched in early May, reveals growth of 2.1 per cent in sales (excluding petrol) in 2019, boosting the value of convenience to $8.8 billion. Food was a clear standout, finds the new report, with food sales up nearly six per cent to $4.038 billion. On the flipside, non-food categories delivered sales of $4.738 billion. This was down by more than one per cent on the 2018 result. The decline, according to AACS, is in part due to the tobacco category delivering growth of just 0.83 per cent in 2019 compared with 6.4 per cent the previous year. AACS CEO Jeff Rogut says the continued strong performance of the convenience channel, as highlighted by the report, is an “ideal accompaniment” to the major milestones the industry is celebrating. This includes the AACS’ 30th anniversary. “The value proposition we provide consumers has never been clearer than right now as the coronavirus pandemic plays out,” he said. “Government has deemed our industry an essential service and we take our responsibility to provide the items people need in these distressing times very seriously. “The strong 2019 result and the way we’re still serving our customers today in bright, modern, clean and safe stores is a testament to the many great operators and staff who make our industry tick.” Refreshing result for beverages During 2019, on average more than 70 per cent of convenience shopping baskets included a beverage, the report reveals. Packaged beverages grew 4.4 per cent over the year, says the AACS, to deliver the greatest dollar value contribution of any convenience category, at $79 million. “Convenience customers are increasingly including a beverage among their purchases, in many instances combined with a food-on-the- go purchase, with the trend to healthier alternatives continuing to play out and new market entrants in 2019 having a positive impact on the category,” Mr Rogut said. Energy drinks, soft drinks and flavoured milk led the way in terms of dollar share in the packaged beverages category. Tea drinks and protein drinks delivered the best performance in terms of dollar growth. Sales heat up for hot drinks Hot dispensed beverages, according to the report, represented the fastest growing category in convenience for the third year running. Its growth of 18 per cent contributed another $46 million in sales, taking the category value to more than $300 million. “Convenience stores are now legitimate coffee destinations as premium quality offerings are being rewarded with more frequent visits from customers,” Mr Rogut said. “Those who typically get their caffeine fix from the convenience store now do so more than once every two days.” Food on the go keeps going strong Generating $68 million in additional sales for the channel, the food-on-the- go category grew at 11.5 per cent, says the report. This result made it the second fastest growing category in convenience in 2019, accounting for 38 per cent of total channel growth and total sales of $659 million for the year. “Food has been one of the key innovation focus areas for our industry in recent times, and the efforts of leading operators are being rewarded,” Mr Rogut said. “Convenience stores are now an established destination for fresh sandwiches, wraps and hot food, with customers responding positively to the quality and freshness of the convenience food offer.” Importance of tobacco Although growth in tobacco sales was only 0.8 per cent for the year, AACS says this is still a “very important” legal category for convenience stores. The contribution of legal tobacco sales to the overall channel sales was almost 39 per cent in 2019, according to the report. Fighting fuel theft The AACS report highlights the cost of fuel theft in 2019 as amounting to a loss for the average store of $166.91 each week. While this is a 1.8 per cent decrease over the previous year, the AACS says it’s still a “significant” sum for any small business. NEWS MAY/JUN, 2020 CONVENIENCE WORLD 5