Domestic beers dominate sales and retail space, but retailers are increasingly saying cheers to imports and crafts, as well as innovative new products like gluten-free and organic brews.
Such efforts come at a time when wine and spirits sales are rising at the expense of beer.
While the overall beer category grew 2.7% to $8.2 billion in food stores for the 52 weeks ending May 20, domestic premium beer (priced about $17 per case) slipped 0.7% to $3.6 billion and domestic sub-premium ($12 per case) dropped 1% to $1.3 billion, according to Information Resources Inc., Chicago.
Brewers, in turn, are fighting back with unique new domestic brands, as well as items that cater to specific holidays, seasons, and health and wellness trends.
Syracuse, N.Y.-based Green Hills Farms recently began carrying Anheuser-Busch's new Redbridge brand, a beer made with sorghum, a grain that's safe to those with wheat or gluten allergies. Bard's Tale, another gluten-free brew, is also new to Green Hills' shelves.
Along with gluten-free, other types of health-oriented beers are making a retail impression.
Green Hills' 31-by-16-foot refrigerated walk-in beer cooler now carries organic beers like Stone Mill and Wolaver's, according to grocery manager Dan Piron.
“We will always carry brands like Bud and Coors Light, but we try to specialize in craft and other beers to cater to upscale shoppers,” Piron told SN.
The new wave of beers has prompted some retailers to use new consumer education tools.
Charlotte, N.C.-based Harris Teeter, for instance, used special shelf labels called AdTags earlier this year to describe the benefits of gluten-free and organic beer, according to Little Rock, Ark.-based Vestcom, the company that produced and supplies the tags.
AdTags for Stone Mill featured the “USDA Organic” symbol, along with a brief description of the taste of the beer.
“A classic pale ale with a perfect bouquet of malt and hop,” the labels read. The AdTags were featured in all Harris Teeter stores that sell beer, according to Vestcom.
Gluten-free and organic selections aren't the only distinctive beer retailers are offering. Green Hills, for instance, makes sure it has plenty of limited-edition and seasonal beer available. This summer, it's heavily promoting Saranac Pomegranate Wheat. The beer is one of Saranac's “12 Beers of Summer,” available in stores from March through July.
The Saranac brand has special importance to Green Hills because it's brewed by the Matt Brewing Co., located just a half hour away from the store.
“We like to have a good selection of unique beer,” Piron stressed.
Green Hills also stays abreast of new beer flavor profiles. At present, it's looking forward to receiving Miller Brewing's new Miller Chill, which launched nationally this month after a spring test in Arizona, Florida, New Mexico, San Diego and Texas.
Modeled after the Mexican chelada (“cold one”), Miller Chill is a light beer brewed with lime and a pinch of salt.
Randy Ransom, Miller's chief marketing officer, described the brand as an example of the fast-growing “Latinization” of American culture.
“Miller Chill is a celebration and fusion of two wonderful cultures, great light beer from America and the chelada-style from Mexico,” Ransom said in a statement.
At just 12% distribution, Miller Chill is already the No. 1 new beer brand, and is on track to becoming a $35 million brand, Bump Williams, IRI's beer, wine and spirits general manager, told SN.
Williams attributes the brand's quick success to the fact that it capitalizes on consumer demands for flavored beer — and caters to Latinos, who over-index in beer purchases.
“There's a strong focus on Latinos,” Williams said, noting that Anheuser-Busch is reaching out to the same ethnic market with Chelada Bud.
The launch of such brands comes at a time when beer is facing strong competition from other alcoholic beverage categories. About 25% of American adults over the age of 21 drink regular domestic beer, a 15% drop since 2001, according to Chicago-based research firm Mintel International. Some of that may be due to health concerns, as half of respondents to a Mintel study said they think that wine is healthier than beer.
There are exceptions, though. Williams stressed that the big domestic brewers are working to regain lost ground by romancing the category much in the way wine companies have. Among other efforts, brewers now host food/beer pairings at key retail accounts. Micro/craft and import beer grew 17.9% to $519 million and 9.2% to $1.7 billion, respectively, according to IRI.
The reason microbrews and imports are doing so well is that consumers are trading up, said Mary Anschutz, brand manager for Hacker-Pschorr and Paulaner, two German import brands marketed by White Plains, N.Y.-based Star Brand Imports, a Heineken-owned company.
Star Brand research shows that many moderate drinkers will spend a little more money to get a beer that has more flavor or is perceived as more special, Anschutz said.
“Specialty imports are an affordable luxury,” she said.
That's certainly the case at Metcalfe's Sentry Foods in Wauwatosa, Wis., said liquor department manager Tony Furlich.
“The overall beer category is not showing much growth, but imports and micros are doing well,” he said.
Many of Metcalfe's Sentry Foods consumers are willing to spend more money for a specialty beer, he said.
“People don't want to take a chance on something that may not taste good,” he noted.
Metcalfe's Sentry just rearranged its beer cooler to give special attention to seasonal, malternatives and others that are popular during the warmer months.
One of Sentry's most popular seasonals is Summer Shandy from Leinenkugel, a division of Milwaukee-based Miller Brewing Co.
It's also readying for an annual two-month Oktoberfest promotion, in which six or seven of its German imports, including Spaten and Hacker-Pschorr, are featured.
“We celebrate Oktoberfest because it's something different than the traditional holidays, like the Fourth of July,” Furlich said. “It's special.”
The store will also put up special displays featuring German glassware and related products.
Brewed in Munich, Germany, home of the Oktoberfest, Hacker-Pschorr offers retailers Bavarian-themed decor designed to pique consumer interest in the brand. Additionally, authentic Oktoberfest banners, flags and 1-liter glass mugs from Munich will be available.
What makes Oktoberfest so unique is that retailers can stretch it into a two- or three-month selling period, Anschutz said.
“Oktoberfest has become a selling ‘season,’” she noted.
Along with imports, many craft beers can tie in well with an Oktoberfest theme.
“There's enough beer available that retailers can create an entire Oktoberfest section,” Anschutz said.
Retailers are also creating other beer trends. This year, shoppers at Metcalfe's Sentry Foods are showing strong interest in regional Midwestern brands, including New Glarus and Lakefront. These and other brands are merchandised together on the shelf.
“Regional beers are a growing trend in the business,” Furlich said. “Many people are gravitating toward homegrown brews.”
At the same time, they're responding to beer that has pomegranate and other added flavors, Fulich said.
Micro/craft sales are growing in the double digits at a time when the largest domestic beer segments are flat to declining.
|Source: Information Resources Inc., based on dollar sales in food stores for the 52 weeks ending May 20, 2007|
Carbonated soft drinks were most commonly sold on promotion, followed by bottled water and beer.
|CATEGORY||$ SALES*||% CHANGE VS. YEAR AGO||% SOLD ON PROMOTION**||% CHANGE VS. YEAR AGO|
|Source: Information Resources Inc. |
*Sales in food, drug and mass outlets (excluding Wal-Mart) for the four weeks ending May 20.
**Display, feature or price reduction.