With the Ontario government’s announcement that they’ll finally be allowed to sell beer, wine, cider and ready-to-drink cocktails by 2026, joy and relief has come to Ontario c-stores just before the holidays—particularly those that had already been making investments in the age-restricted category without guarantees the sector would ever open up.
That includes at Little Short Stop Stores Ltd., a family-owned chain in southwestern Ontario with 28 locations including in Kitchener, Waterloo, Guelph, and New Hamburg.
“We started in June thinking about what the footprint might look like and how many freezers we’d have to convert to coolers. In fact, we have already converted freezers to coolers in eight locations,” says Robbie Broda, project manager for Little Short Stop Stores. “I had been doing a lot of work on something that may or may not come to fruition, so this news gives me quite the satisfaction.”
Those coolers are temporarily stocked with alternative beverages but will eventually be shrunk to accommodate beer and wine.
“We were anticipating and hoping for this announcement, and I think the whole industry is excited to have the opportunity to add another category,” says Broda. “We’ve been fighting for this for a long time—and that it has finally come to fruition feels amazing. People who had been bypassing us because they were wanting to make a stop at The Beer Store or LCBO will now be able to stop at us and do one-stop shop.”
Little Short Stop Stores has also already been building relationships with microbreweries in an effort to see what their beer and other alcohol planograms might look like. “They’ve been really receptive to the conversation,” says Broda. “Some of our locations have a bigger footprint and some of them have a smaller footprint, so it will be interesting and unique to each store in determining what is going to go where.”
Anthony Magnini is also thrilled by the news, having invested in refrigeration units for beer and wine in the convenience store of his company Gateway Corporate Group’s flagship location at Rymal and Pritchard Roads in Hamilton, Ont. as well as a tons of storage space in the basement of the property.
“The benefit to the store and gas station in extra traffic is going to be unbelievable,” Magnini tells Convenience Store News Canada. “With an adjacent restaurant that we almost have completed and the ability to sell beer and Prosecco and other wines, our average food sale is going to go up by 30%.”
Gateway is also in the midst of construction of a location down the street from its flagship store and Magnini sees new builds being impacted by this policy change. “Gas stations and c-stores are going to be built with bigger footprints, and I think you’ll see existing smaller stores expand, otherwise they could lose the opportunity as you need to have so many coolers devoted to the category,” he explains.
With the massive beer cave at its flagship location, Magnini says Gateway also has a “great opportunity to be a distributor down the road” of beer and spirits to other c-stores.
The Beer Store to distribute to retailers until 2031
In making its announcement on Dec. 14, the Ontario government said it will be looking at more flexible distribution models for getting product to the sector. The Beer Store has agreed to maintain its primary role in beer distribution to retailers during a transitionary period spanning until at least 2031.
As a part of the announcement by Doug Ford, Ontario revealed dedicated shelf space requirements across all new retailers for craft producers. The stipulation is aimed at helping small producers compete.
“This is going to bring in millions of people that haven’t been coming into c-stores, particularly millennials who love craft beer,” says Dave Bryans, CEO at Ontario Convenience Stores Association (OCSA), who will be stepping down from his post on Jan. 1. He will continue to help the OCSA board with the beer file, however, and is launching an advisory group, cstoresconsulting.ca, which will go live in January.
“This will bring in a new shopper to every community, not just in major centres but smaller, rural communities in Ontario,” Bryans adds. “It gives small families the opportunity to work with local craft brewers and build their businesses together.”
“Many craft brewers have long wanted the opportunity to sell their products to local convenience stores, and other local, retail outlets, and this is a big step in giving them that opportunity,” says Scott Simmons, president of the Ontario Craft Brewers Association. “That’s why it is great to see government is mandating dedicated shelf space for craft beer in c-stores, which is something convenience stores support, as well as continuing to prevent stocking fees so that consumer choice determines what is on the shelves.”
“Having more spots to sell our beer is good news as we just have to look at Alberta and B.C. where they already have more retail options and the market share of craft beer sold is two and three times versus Ontario,” adds Simmons. “This shows that when consumers have more access to local craft beer on local shelves, they overwhelmingly choose craft.”