C-Stores Foresee Strong CBD Sales in 2022

In fact, Galli noted that vape sales are more than keeping pace.

“Other tobacco products, vape and nicotine replacement products have been doing very good for us, and it continues to grow,” he said.

NielsenIQ Total U.S. Convenience data over the 52 weeks ending Oct. 23, 2021, registered an increase in dollar sales of 13.8% for both tobacco alternatives vapor and electronic cigarettes. This is consistent with the same period last year, which landed at 14.0% for each. Plus, the research firm reported that Vuse gained a point in market share for the four weeks ending Oct. 23, 2021, and dollar sales jumped more than 54%.

WHAT TO WATCH

The FDA’s actions aren’t the only regulations affecting the category heading into 2022. In Massachusetts, the first state to pass a comprehensive flavor and menthol tobacco ban, lawmakers have proposed repealing elements of the law. One bill, for example, would exempt products granted FDA marketing approval or modified risk status.

“The data shows the ban hasn’t worked. Increased sales in New Hampshire and Rhode Island coupled with conversion to traditional tobacco flavored cigarettes in Massachusetts prove this out,” said Jon Shaer, executive director, New England Convenience Store & Energy Marketers Association. “It’s difficult for retailers to watch the sales occur, just not through their stores.”

“One of my issues is that when they put the ban into effect, it didn’t allow for PMTA or modified risk from the FDA,” added Anna Bettencourt, senior category manager for Haffner’s c-store chain, owned by Lawrence, Mass.-based Energy North Inc. “If the FDA clears products to be on the market, then states should allow them to be sold.”

Another development that could benefit the vape category for c-stores is the final ruling on the Preventing Online Sales of E-Cigarettes to Children Act (POSECCA). The law forbids the delivery of vape products to residences throughout the continental U.S. via the U.S. Postal Service. Several delivery services, including FedEx, also have declared they would no longer transport vape items to homes.

“Consumer access is being tested with the new regulations,” Clark said.

Perhaps the most intriguing component of this legislation is that Congress did not distinguish between tobacco plant-based and synthetic nicotine products. Currently, it’s unclear whether synthetic nicotine falls under FDA jurisdiction. It’s certainly a product line worth watching for its potential to replenish convenience stores’ back bars after so many MDOs. CSD

fast facts:

• Vape and e-cigarette sales climb 13.8% at c-stores for the 52 weeks ending Oct. 23, 2021, per NielsenIQ. • The Preventing Online Sales of E-Cigarettes to Children Act bans mail delivery of vape products. • Manufacturers look to synthetic nicotine to possibly sidestep FDA regulations.

BEST

SELLER

GoPremier.com

C-STORES FORESEE STRONG CBD SALES IN 2022

The convenience industry has real opportunity to build upon 2021 momentum by capitalizing on trending products like delta-8 gummies and CBD drinks.

Isabelle Gustafson • Associate Editor

Cannabidiol (CBD) sales in the convenience and petroleum channel are set to hit $171 million in 2021 — up 49% from 2020, according to market research firm Brightfield Group’s “US CBD Market Industry Update, October 2021.” The market is forecast to reach $449 million by 2026, representing a 21% compound annual growth rate (CAGR) from 2021 to 2026.

“We are seeing growth in the (convenience) channel uniquely, and we have it expanding more rapidly than the market in general,” said Brightfield Group Senior Insights Manager Jamie Schau.

While the CAGR for c-stores is only slightly higher than the overall market, Schau said, it’s especially promising considering initial projections.

“It’s not really what we were originally expecting,” she said. “We were expecting a whole lot of huge pharmaceutical change, grocery, mass (merchants), to move a lot more volume, and that’s been delayed. So it’s giving convenience stores, actually, unique access.”

Savannah, Ga-based Parker’s, which operates more than 70 stores throughout coastal Georgia and South Carolina, started selling CBD products about four years ago, said Mike Gancedo, senior category manager for Parker’s.

The chain now carries a variety of products, including Summitt Labs’ Hemplitude gummies, disposable vapes and cartridges, as well as cartridges and gummies from the Pur brand.

“We are going to keep some kratom,” Gancedo said, referring to an herbal extract that comes from the leaves of an evergreen tree grown in Southeast Asia that offers similar effects to CBD. “But delta-8 is just dominating — right now, it’s the gummies as No.1, and then the vape is No. 2.”

DRINK DILEMMA

While tinctures have been holding about 25% of sales this year in the convenience channel, Brightfield Group expects capsules, drinks and gummies to see the strongest growth over the forecast period.

“Everyone is talking about drinks,” Schau said. “There’s a lot of excitement around it. … I think it is largely because it’s seen as this alcohol substitute, and a lot of people coming out of the pandemic slowly but surely are looking to cut back on alcohol consumption. This is a really viable alternative.”

It makes sense to position CBD drinks alongside alcoholic beverages, Schau said — either as an alternative or even a mixer.

Still, many c-stores are holding off on adding CBD drinks to the lineup.

“And there’s a reason for that,” Gancedo said. “See, our CBD products, we’ve got them on the counter, but right now they’re installing doors. We don’t want anybody under 21 having access to those, even to steal the product. We don’t want it in their hands.”

If Parker’s had the space behind the counter to carry CBD drinks, Gancedo said, it might be different. For now, he sees CBD drinks as a better fit in tobacco outlets or vape shops, where employees are able to talk with the customers further and educate them on the different products.

But many of Parker’s competitors do sell CBD drinks, Gancedo noted — on the floor, on the counter, “everywhere.”

“Our customers, we tailor to soccer moms and ‘Bubba’ and everybody else,” he said. “The one thing that you do not want is you do not want to upset mothers. They’re our base customers, and we want to make sure that we’re doing things responsibly.”

DELTA-8 DOMINATES

Parker’s has seen huge success with its delta-8 products, which are considered to have many of the same psychoactive effects as tetrahydrocannabinol (THC) — albeit at lower levels.

Source: Brightfield Group, “US CBD Market Industry Update, October 2021”