OAK BROOK, Ill. -- Growth in craft-beer sales in convenience stores is giving retailers ample reason to add a high-end beer set, if they haven't already, highlighting craft beers and imports.
"The beer business tends to have familiar cycles that ebb and flow, and craft beers as a segment are currently performing well," Manny Zayas, vice president, convenience store channel for Anheuser-Busch Inc., St. Louis, told CSP Daily News. "It's important retailers make changes based on these numbers but carefully analyze and review sales trends [and] know their clientele."[image-nocss]
For a look at the trends currently driving growth in craft beers, see the July issue of CSP magazine.
"People are looking for value," Jim Koch, founder and chairman of the Boston Beer Co., told CSP Daily News in an exclusive interview, "and value doesn't necessarily mean the cheapest thing on the shelf. Value means something that is worth what you pay for it."
With that in mind, CSP cornered a handful of beer suppliers to get their suggestions on developing a high-end beer set. One common theme: Don't overdo it.
Steve Ward, vice president of national accounts for Heineken USA, White Plains, N.Y.
"Data shows that over the last five years, more than half the volume and share gains have been driven by just five craft brands. Thus, flavor variety and style are not becoming more important to consumers than strong brands. Retailers should be aware of the dangers of devoting too much of their resources to a large number of small SKUs. This may cause crowding out of large brands in craft and imports that actually represent the bulk of the business and the growth.
"In the limited-space environment of a c-store, it's vital that retailers ensure adequate pack-out of the biggest selling SKUs in all key segments of the beer category. While it is important to provide variety, long-term growth will come from retaining brands that have staying power and that will contribute to your business year after year."
Scott Waters, vice president convenience channel for Crown Imports LLC, Irvine, Calif.
"You've got to know your market. You've got to have the right ones. You can't just go in there and throw 15 or 20 [brands] in there. Get the right three or four, absolutely expand that part of the business, but you can't carry 15. That customer doesn't expect to find 15 different microbrews in a convenience store. We still have Bubba there."
"[Consumer that buys craft beers] are looking for authenticity. And that's a manufactured product without too much marketing."
Jim Koch, founder and chairman of the Boston Beer Co., Boston
"First, there is no average c-store. There are c-stores that have a whole door of craft beers in New England, in particular. In Waco, Texas, you can barely put Sam Adams on the shelf.
"Start with six-packs, and move down the brand chain, the brand ladder. Start with Sam Adams. If you can't sell Sam Adams Boston Lager and Seasonal, you probably don't have craft-beer drinkers in your store. Then add Blue Moon. If that does well, then go down to the next brand. It may be a local [brew], it may be Sierra Nevada, it may be Fat Tire, and so on. At some point, you've met your consumers' needs. The extremes are the c-stores that can't sell Sam Adams Boston Lager and Seasonal; the other is filling two or three shelves with those six or seven brands.
"As to warm packs on the floor, it depends on the market. The high-craft-share markets on the coasts, yes. You don't want warm beer for an unknown beer, though."
Larry Munshower, convenience channel manager, North American Breweries, Rochester, N.Y.
"In most convenience beer sets, there are plenty of slow-movers that can be eliminated in favor of high-dollar-ring crafts. This channel is the bread and butter for their domestic premium and subpremium brands." Retailers need to weed out what Munshower calls the "space holders" that "crowd out" potential new entrants.
Tenth and Blake insights team, high-end-brand managers for MillerCoors, Chicago
"Craft and import space has increased in c-stores over time. The number of brands retailers carry has increased significantly over time. Retailers need to understand the consumers they are attempting to bring in and offer products that meet the needs of these consumers."
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