OLD GREENWICH, Conn. -- Need a good reason to increase your import/specialty beer set? Beverage consultant Tom Fox will give you three: there's more profit to be made, the category is underdeveloped, and, perhaps most importantly, the consumer wants to trade up.
The c-store channel is getting about 42% less out of this category than all other [channels], said Fox, partner with CM Profit Group, during CSP's Import/Specialty Beer Forum held recently in Old Greenwich, Conn. The best developed [beer] segment in c-stores is the value [segment], and I don't [image-nocss] think that's where we want to be.
Fox was joined by about 30 convenience store retailers and beer suppliers to discuss the issues facing the import/specialty beer category. During the two-day event, all attendees agreed there are opportunities to grow the segment with varying opinions of just how to do that.
C-stores have very finite shelf space, said Don Bryant, vice president of trade development for Mike's Hard Lemonade, Seattle. So how far do you want to push the envelope [to increase import/specialty variety and selection]?
Profitability is often the tie breaker, said John West, director of sales and merchandising for Southwest Convenience Stores, a 131-store chain based in Odessa, Texas.
According to Fox, import and specialty beers provide a 50% profit advantage over premium beers on a 12-pack basis and an astonishing 88% profit advantage on single serves. You literally have to sell twice as much [premium beer] to make the same profit, he said.
But David Wilkins, category manager for Circle K Gulf Coast, wasn't ready to discount another significant statistic: store traffic. If the decision is strictly [based on] store traffic, premiums are going to get the space because that's what's driving the traffic, he said.
Thus, a compromise was suggested. The dilemma is deciding on the balance, said Jackie Pfeiffer, category manager for BP Products North America, Naperville, Ill. We look mainly at unit movement, but when it comes to [a tie between] two productsmaybe an import and a premiumthat's when we look at [profitability].
West, who said beer is the No. 1 category is his stores, added more space for import and specialty beer by looking beyond the cooler door. We cut beauty aids to make more room for warm specialty/imports, he said. We are a grab-and-go business; our customer will come in and buy cold Budweiser. But what we've found is then what he'll do is reward himself with a more upscale brand that he's not going to share with his buddies. He'll take that home [warm] and chill it down.
Robert Gulley, category manager of BP/ampm, La Palma, Calif., agreed and said having that warm-beer display can send a message to the consumer. Ninety-five% of beer is sold cold in the c-stores, he said, but having Corona or Heineken on the floor shows that you're in the [beer] business.
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