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03/11/2022

Beverage alcohol in c-stores makes dollars and sense

New research illustrates economic benefits of CICC's “Made in Ontario” proposal to sell craft beer, wine and coolers in the province’s 8,300 convenience stores.
Anne Kothawala
President & CEO, CICC
Anne Kothawala profile picture

Introducing beverage alcohol into Ontario convenience stores is not just about convenience and choice. There’s now proof it’s about dollars and sense.

CICC recently commissioned independent economic research from Cascadia Partners on the financial spinoffs of our “Made in Ontario” proposal to sell craft beer, wine and coolers in the province’s 8,300 convenience stores. The results overwhelmingly demonstrate that following through on the government’s 2018 election promise is a “win-win-win-win” scenario for consumers, the local craft producers, our channel and the government itself.

The facts speak for themselves. Selling locally made beer, wine and coolers in our channel is:

  • A job creator – up to 9,300 new jobs would be created
  • A wealth generator – up to $180 million in wages (annually)
  • A tax windfall for government – up to $350 million in annual tax revenues (67% of which would be kept by the Ontario government)

In addition, stores in the channel will spend approximately $175 million in new equipment and other infrastructure to support the sale of alcoholic beverages. That translates into an estimated investment of up to $45,000 by each store.

Digging a little deeper, beverage alcohol will result in between 3,500 to 6,000 new transactions every year per store, while the snackability multiplier – the purchase of other products when buying alcohol – will increase customers’ basket size 2% to 4%.  That means each customer will spend up to an additional 30 cents per transaction.

CICC has long advocated for the sale of beverage alcohol in our channel because it modernizes the existing archaic and restrictive retail model and will provide Ontarians with enhanced convenience and choice. That’s important because the province has the lowest number of alcohol retail outlets per capita – in 2017, 2.4 per 10,000 residents. That’s well below the Canadian average of 5.9 and a drastic gap from Newfoundland & Labrador which has 21 per 10,000 residents.

Diversifying our product mix is key to ensuring our channel not only survives but thrives. It’s critical that we adapt to meet the ever-changing consumer demand because the pandemic has forever altered our retail model. The perfect storm of lower sales and increasing costs has reduced already razor-thin profit margins and consumers are demanding more one-stop shopping. We know from consumer polling that more than 70% of Ontarians are in favour of expanding alcohol sales to convenience stores.

And CICC has remained steadfast in our advocacy to get this over the goal line. In fact, we developed a creative, turn-key solution, “Choose Convenience. Choose Ontario” that the government should adopt to help the province’s local alcohol manufacturers, our channel and consumers as we enter economic recovery mode.

It’s no secret that a major complaint of craft producers is getting exposure to new customers. The current model makes it difficult for smaller producers to achieve the economies of scale and increased points of sale that they need in order to succeed.

That’s why enabling Ontario convenience stores to sell locally made alcohol products on our shelves makes sense, for everyone involved, including the government.

It’s an election year and now there’s now economic proof that choosing convenience and choosing Ontario adds needed revenue to the government’s balance sheet.

To any of the political leaders wanting to lead the province through the post-pandemic economic recovery, CICC can give you 350 million good reasons for your government to support CICC’s Made-in-Ontario beverage alcohol plan.

Doing so, would provide a win-win-win-win scenario for Ontario – the proof is in the economic data. And that’s a plan that brings not only convenience and choice but makes dollars and sense.

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