DALLAS -- 7-Eleven Inc. is set to roll out "Game Day," as private-label beer, according to a report by Fortune magazine. The company confirmed that the new product is a premium beer selling at a budget price but would not provide further information. 7-Eleven is expected to officially announce the details today.
The Dallas-based retailer is farming out the brewing of Game Day to City Brewing, La Crosse, Wis., the report said.
Because of the recession, core convenience store shoppers now have less cash, which is likely why 7-Eleven is entering the market at [image-nocss] a low price point, the report added. "They figure that since brands are weaker at that price segment they can capture the full margin rather than pay a premium to a supplier," Harry Schuhmacher with Beer Business Daily, which first reported the news, told Fortune.
Schuhmacher said the beer is called Game Day, but 7-Eleven would not confirm it.
The chain launched the Santiago beer brand in 2003 to get a piece of the imported beer trend, said the report, but like a lot of private beer labels, struggled to get a foothold in the market. "High-end no-name beer is a loser proposition," said Schuhmacher. "Why pay more for a beer nobody's ever heard of?"
He also is not convinced that a budget beer will take off, the report said. Private labels work for soft drinks, but in the beer world brands still matter, Schuhmacher said. Even at the low-end of the spectrum, consumers often show fierce loyalty to a single label.
The launch also allows 7-Eleven more control in how it transports its beer to stores, the magazine said. It will deliver the beer through normal channels in all markets except southern and northern California, the company said, where it will use combined distribution centers. These centers bring together goods from multiple suppliers in order to trim the number of deliveries to stores.
The company unsuccessfully tested out the centralized method for beer in the Los Angeles area last year, Schuhmacher said, adding that this might be a way to show to the big brewers that the system can work.
In other 7-Eleven beverage-related news, the Teamsters labor union said on Friday that The Coca-Cola Co. has proposed testing a new distribution method to 7-Eleven stores in Southern California that could lead to hundreds of job cuts, according to a Reuters report.
An official at the International Brotherhood of Teamsters said the new method, which involves a third-party logistics company, could cost hundreds of jobs now held by employees of Coca-Cola Enterprises Inc., the largest bottler of Coke products.
The world's largest soft drink maker has proposed to acquire the North American operations of Coke Enterprises in a bid to cut costs and streamline its distribution. PepsiCo Inc. recently closed a similar deal.
David Laughton, director of the Teamsters' Brewery & Soft Drink Workers Conference, said on a conference call with reporters that Coke's plan is "dangerous."
"Although no one wants a work stoppage when the economy is in such terrible shape, we will fight for our jobs," Laughton said. He added that if the new method were expanded to other chains and other regions, it could affect thousands of jobs.
The union, which represents some 15,000 North American workers who produce, package and distribute Coca-Cola drinks, said it was not aware that the test had begun.
A Coca-Cola spokesperson referred the news agency's inquiries to Coca-Cola Enterprises, which did not respond by press time. A spokesperson for 7-Eleven was also unavailable for comment to Reuters.
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