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Flat. It's not just what happens if you open a can of beer and let it sit too long. It's also what's been happening to beer category sales the past few years. With beer's core demographic aging and focusing on moderation and young drinkers preferring wine and spirits, who is driving this $11 billion industry?
“To unlock growth, we must understand who is drinking, when are they drinking and what they are drinking,” says Keith Campo, director of large formats at Anheuser-Busch.
The IGA retailers who understand the "who, what, and when," as Campo says, are excelling in beer sales and are also the highest-performing stores across IGA. So what are they doing to capitalize on this important category that other retailers can try?
Campo and IGA CEO John Ross shared insights and strategies on how retailers can maximize sales and profits in the recent webinar, Driving Sales in the Beer Category. From ensuring the right assortment to timing your ads and merchandising, learn what the best of the best are doing to boost beer sales.
Who is the typical beer drinker and what are they looking for when shopping the adult beverage aisle of their grocery store? Here’s a quick look at some facts and figures:
While overall sales remain strong, as mentioned, Campo says beer consumption is down about one percent over the last few years as traditional drinkers focus on moderation, and Baby Boomers—a core beer demographic—reduce their beer consumption.
There are still big opportunities for growth in specific subsets of the beer category, in craft beers and "near beer" beverages such as hard seltzers. To take advantage of those opportunities, you just need a bit of knowledge and understanding of the forces at play behind these trends.
Anheuser-Busch has divided the beer category into five subsets: Beyond Beer, Balanced Choices, Easy Drinking, Classic Lager, Craft & Styles, which are also broken down into five different price partitions: Value, Core, Core+, Premium, and Super Premium.
The core brands in the Easy Drinking and Classic Lager subsets, Budweiser/Bud Light, Coors/Coors Light, Miller, etc., make up 40 percent of sales, so any changes in the beer aisle still need to preserve that volume, Campo said. At the same time, all the new growth and higher profits are in premiumization: the Premium and Super Premium options in the Beyond Beer and Craft & Styles subsets.
Campo boils the strategy down to this: “Where is the future going? Premium. What do we need to maintain? The core volume.”
Adds Ross, “Our shoppers are all of those columns. We have the opportunity to serve customers in these new categories and focus on the ones that are growing.”
Based on those insights, Campo advises retailers to ask themselves:
When looking at when people are likely to drink, Campo identifies three main occasions:
According to Campo, there are a number of things retailers can do immediately and as part of a long-term strategy.
Follow these merchandising tips:
IGA is ready to help your store boost beer sales with the right assortment and merchandising, as outlined in the webinar. Ross says that Red Oval partner Anheuser-Busch will work with a store to complete a category makeover, while the IGA visual merchandising team will create signage to educate consumers and make the products stand out. Once the results from the store makeover are in, IGA and Anehuser-Busch will develop a category driver toolkit and work to build beer education into the National Digital Ad and online content.
Interested in volunteering for the beer aisle makeover? Contact IGA's Heidi Huff to submit your store for consideration.