What a Peach
Extensive coverage of the 2013 NACS Show in Atlanta.
Best Strategies for Increasing Beer Sales
Top-quartile retailers sell nearly seven times as much beer as those in the fourth quartile, according to a new report by Anheuser-Busch, St. Louis. The difference, according to A-B’s C.J. Watson, is a balanced approach and a consistent pricing strategy.
Watson, vice president of category management, reported the results of the A-B study during a NACS Show workshop titled “Getting Crafty with Beer Sales.” The study, which included 40,000 convenience stores across the United States, unveiled the following beer quartile sales figures:
- Top-quartile retailers sold $315,272 in beer.
- Second quartile: $193,739.
- Third quartile: $130,913.
- Fourth quartile: $46,045.
Part of the study took a closer look at more than 300 stores, which showed a balanced beer strategy was most often successful.
According to the report:
- Retailers who focused on craft beers at the expense of premium beers succeeded in outperforming the c-store industry average only 21% of the time.
- Those that focused on premium beers and downplayed craft beers succeeded 70% of the time.
- That said, a beer strategy that highlighted both craft and premium beers beat the industry average 90% of the time.
Watson said a balanced approach more closely reflects the way consumers think about beer. “People want all segments, so we have to manage all of them,” he said.
The top quartile also has a consistent pricing strategy, maintaining craft prices that index at 175 compared to premium beer prices—i.e., if an average six-pack of premium beer costs $6, a six-pack of a craft beer costs 75% more, or $10.50.
It’s a matter of setting expectations for the consumer, Watson said: “If you’re not asking them to pay more consistently, how can we expect them to trade up regularly?”