Sales of big packs are on the upswing as beer drinkers
spend more now to save money later
Value-conscious consumers are increasingly buying large beer packages to save money on a per-unit basis.
Sales of 30-packs of subpremium beer generated $332 million in supermarkets for the 52 weeks ending Dec. 28, 2008, a 14.1% growth from the same period in 2007, according to Information Resources Inc., Chicago. And 36-packs of premium beer saw $70.6 million in sales, up 14% from the same period one year ago.
The reason larger packs sell well is simple — each bottle or can is cheaper per unit, said Todd Wiggs, beer department manager, Jungle Jim's International Market, Fairfield, Ohio.
For instance, Bud Light costs 56 cents per unit when sold in a 12-pack at Jungle Jim's, but 48 cents per unit in a 30-pack, or a $2.40 savings per 30-pack, according to Wiggs.
“The savings is definitely motivating sales of the larger sizes,” Wiggs told SN.
The large packs are so popular that Jungle Jim's currently has three displays of Keystone 30-packs, and just one display of Keystone 12-packs.
“It's important to provide a value to customers, because they're definitely price shopping,” he said.
The larger sizes don't pose a merchandising challenge, because they're only slightly wider than 24-packs, Wiggs added.
Wiggs said the big-size trend has taken off in many beer segments since Miller Lite came out with a 30-pack several years ago.
Sales of large packs — including 24-, 30- and 36-count, as well as other large sizes — have grown over the past few years and will continue to shine this year as recessionary shopping habits take hold and more brewers tap into the trend, said Dan Wandel, IRI's senior vice president of beverage alcohol client solutions.
“You're starting to see larger pack sizes diversify into more segments,” Wandel said, noting new introductions in the domestic premium and subpremium segments, along with imports and crafts.
The movement toward larger packs is all part of the belt-tightening being done by consumers. When asked how they would like manufacturers to respond to rising raw materials costs, 47% of consumers polled by a Nielsen survey said they'd like them to offer larger economy sizes with a lower price per unit.
At Dorothy Lane Market, Springboro, Ohio, 24-packs are moving well, said Jerry Post, beer and wine manager of the retailer's Washington Square store.
Post said the large sizes previously were only offered to club stores. Even as recently as last year, wholesalers didn't present many large-pack sizes. But that's changing now.
“Our suppliers are starting to come to with us with more 30-packs,” he said. “It's nice to have them available to us.”
Post is eager to bring them in because consumers like the value they provide. For instance, a 24-pack of Bud or Bud Light sells for $15.99, while a six-pack goes for $5.19.
“It's definitely a savings,” he said.
While some shoppers may balk at spending more at the outset, more and more are realizing that the savings add up over time, said Post.
“Beer drinkers know they will drink x amount of beer per week, so when they budget it out, they know it's cheaper to spend more now on a large pack to save more in the long run,” he said.
Post is also seeing interest in large-size variety packs. For St. Patrick's Day, for instance, he planned to merchandise a Guinness 18-pack consisting of three six-packs each of the Harp, Guinness and Smithwick's brands. The 18-pack sold for $23.99. Typically all three brands sell for $8.99 a six-pack, so it's a $3 savings.
Post said he'll probably focus on two or three large-pack brands at a time, such as premium domestics and crafts.
Because they're larger, he'll merchandise them warm. But if they start to take off, he'll make room for them in the refrigerator cases.
To do so, he may take out certain stockkeeping units of other brands. This won't be difficult because of the many different SKUs carried under the same brand. For instance, Dorothy Lane has Bud Light in six-pack bottles, six-pack cans, 12-pack bottles, 12-pack cans, and 18-pack bottles and cans. He may take out one of those SKUs to make room for a 30-pack.
“It's a good time to take a chance and try out some of these [new sizes],” he added.
Since the large packs are such a good value, Post would like to see brewers offer better point-of-sale materials emphasizing the savings.
“Our distributors have wonderful posters, but none of them talk about the savings,” Post said.
In the meantime, Dorothy Lane will create its own signs that emphasize large-pack values.
“There's no sense stocking the large packs if they aren't promoted,” Post said.
At Dahl's Food Markets, Des Moines, Iowa, the best-selling 30-packs are those in the subpremium segment, consisting of lower-priced beers like Miller High Life and Keystone Light.
“The large packs in the lower-end beer have always done well, but they're doing much better now,” said C.J. Frazier, store manager at Dahl's Merle Hay Road store.
Frazier attributes that to beer drinkers trading down from more expensive beer like Bud and Michelob and buying a 30-pack to get an even bigger savings.
“As they search for value, people may be switching brands,” he said.
Frazier said this could also be the reason why imports aren't doing as well as they had been.
“People aren't buying as much imports because of the cost,” he said.
GOOD THINGS COME IN LARGE PACKAGES
Sales of certain 30- and 36-packs saw strong growth.
|BEER TYPE/PACKAGING SIZE||DOLLAR SALES||% CHANGE VS. YEAR AGO|
SOURCE: Information Resources Inc., for 52 weeks ending Dec. 28, 2008, in supermarkets. All data is for packages holding 12-ounce cans.