Store-brand beer is on tap in all channels as retailers offer quality brews at below-premium prices
They have catchy names like Port Republic, Buck Range, Game Day and Big Flats 1901. They're made in established breweries, and come in light, ice and other popular varieties.
Yes, they certainly have a lot of the same attributes as national brands. But these brews are different: They're retailer-exclusive. Port Republic is a Kroger brand; Buck Range, Supervalu; Game Day, 7-Eleven; and Big Flats 1901, Walgreens.
Amidst the struggling economy and rising national-brand beer prices, retailers are catering to a new beer consumer: One who's not as brand loyal as in the past, and on the lookout for good-tasting beer at a lower price point.
Private brands meet those needs with retails like 50 cents for a can of Big Flats; and $5.99 for a 12-pack of Buck Range.
“Based on the economy, Supervalu saw an opportunity to offer our customers a high-quality, low-price can of beer with the same great taste as leading national brands,” Mike Siemienas, a Supervalu spokesman, told SN.
Buck Range is available in most Supervalu stores, including Albertsons, Jewel-Osco, Cub Foods and Farm Fresh.
The retailer, which does not state on the packaging that Buck Range is a private label, is targeting outdoor and sports enthusiasts with the brand.
“Wherever your outdoor enthusiasm takes you, whatever your choice of adventure, alone or with your fellow comrades, the journey is yours. Live the life — Pass The Buck,” the www.buckrange.com website reads.
“Our goal was to put forward a brand image to target people doing outdoor activities or watching the game,” Siemienas said.
7-Eleven has a similar target market for Game Day, a premium lager beer introduced last year. Game Day is available in two varieties - Light and Ice — and two package sizes — 24-ounce singles and a 12-pack of 12-ounce cans. Suggested retail prices range from $6.99 to $8.99 for a 12-pack, and $1.49 to $1.89 for a single.
Game day is comparable in taste and quality to the top-selling national brand beers, only it's less expensive, 7-Eleven says. City Brewing in La Crosse, Wis., brews Game Day.
The timing of such brands is no coincidence. While the economy is getting better, the effects of the recession, coupled with higher national-brand beer pricing, has led many drinkers to seek out less expensive beer.
“The tough economy has prompted retailers to offer consumers an alternative to the national brands at a lower price,” said Bump Williams, a beer industry consultant based in Stratford, Conn.
The upswing in store-brand beer introductions follows a wave of store-brand spirits, including Origine, Supervalu's line of ultra-premium, small-batch spirits, including French vodka, single-malt scotch and London dry gin; Rue 33, a vodka imported from the Cognac region of France, from Sam's Club; and Veris, an ultra-premium vodka from Kroger Co.
Based on the success of such introductions, it makes sense that retailers would now jump into beer, said Tom Pirko, president of Santa Ynez, Calif.-based Bevmark, a beverage consulting firm.
“We've crossed the line in the alcoholic beverage business,” Pirko said.
Beer generated $8.4 billion in food stores for the 52 weeks ending March 20, a mere 1.2% increase from the prior 52 weeks, according to SymphonyIRI Group. The biggest category — premium-priced domestic beer such as Bud Light, Coors Light and Miller Lite — generated a flat $3.4 billion, while superpremium beers like Michelob slid 0.5% to $760.4 million.
Such performance could be a result of beer drinkers seeking out less expensive alcoholic beverages.
“‘Joe Six-pack’ is looking for value,” Pirko said.
Today's younger beer drinkers don't have the same brand loyalty that their predecessors have.
“National brands no longer have the power they once had,” he said.
Likewise, the popularity of craft beers has introduced beer drinkers to new flavors, names and choices, making them more receptive to new brands.
“It's a fantastic opportunity,” said Pirko.
Retailers are rising to the occasion by partnering with companies like the Winery Exchange, a Novato, Calif., corporate-brand company that sources beer, wine and spirits.
Winery Exchange is the company behind Big Flats, Game Day, Port Republic and Buck Range, as well as brands like Steel Kettle Whistle, an American-style lager from Fresh & Easy Neighborhood Market. Winery Exchange markets about 31 different beer brands, from premium to crafts to imports.
The time is right for corporate brand alcohol beverages because retailers can get quality products at a good price point, said Oliver Colvin, Winery Exchange's chief operating officer of corporate brands.
“Our retail partners have asked for exclusive brands to serve as a point of difference,” he said.
A typical private-brand six-pack of craft beer costs about $1 less than the national brands, and $2 less than premium, said Colvin.
Private labels can quickly pique the interest of today's beer drinkers, said Colvin.
“The beer consumer likes to be the first in the neighborhood to try a new product,” Colvin said. “It provides a sense of discovery.”
Winery Exchange is working with Kroger Co. to launch Port Republic next month. It will be available in light and lager in 30-packs retailing for $21.99. A 24-ounce single-serve can will sell for $1.49.
Port Republic will join Kroger's expanding list of store-brand beers, which include Caguama, a Latin beer, and Hollande 1620, a Dutch beer.
Along with premium brands, retailers continue to focus on the popular craft segment, whose sales soared 14% to $804.5 million in food stores for the 52 weeks ending March 20, compared to the previous 52 weeks, according to SymphonyIRI. Kroger, for instance, markets Tap Room 21, a store-brand craft beer, while Supervalu sells RJ King Wingwalker, another craft.
“Retailers introduce their own craft brands and don't think people will know the difference as long as the quality is there,” said Williams. While store-brand beer may get strong trial, sustaining repeat business will be difficult, Williams said.
Retailers see it differently. Supervalu says it's pleased with the performance of Buck Range. And 7-Eleven touts the fact that Game Day Light earned a gold medal at the 2010 U.S. Open Beer Championships, a national beer competition that included more than 700 beers in 50 different categories. Brewers from around the world, including Canada, Belgium, Germany, England and Brazil, competed in the contest.