Heads Above the Rest

Retailers can revitalize their beer cases by focusing on assortment, uniqueness and quality.   

To borrow a line from Mark Twain, perhaps with a wedge of lime, the reports of the death of the beer category have been greatly exaggerated.

While some big mainstream brands have seen declining sales and market share, industry observers say many consumers, especially Millennials, have taken a liking to craft, local, imports and beers with unique flavors and attributes.

“The overall beer category is experiencing soft performance when compared to wine and spirits,” says Gary A. Hemphill, managing director of research, at Beverage Marketing Corp., based in New York. “However, both craft beer and imports continue to grow.”

According to observers, retailers can further improve the draw, sales and productivity of their beer aisles by concentrating on new brands, profitable stalwarts, unique eye-catching packaging and, where legal, fully taking advantage of manufacturer promotions.

“Promoting beer is good for retailers’ business and we can offer recommendations on customized plans to suit their stores based on their resources and the size and layout of the store,” says Mike Potthoff, vice president of sales – grocery, club and mass, at Anheuser-Busch, based in St. Louis. “Cross-merchandising and teaming up on joint promotions and in-store marketing, innovative product displays and product sampling are also key to driving awareness and purchase of beer at retail.” 

Retailers should first focus on optimizing their beer assortment to drive the most incremental dollars, suggests Vikas Saytal, senior director, category development, at Heineken USA (HUSA), based in White Plains, N.Y. “The more unique and differentiated an item is, the more incremental volume it will add to the assortment. Maximizing incremental volume through a mix of high reach scale brands like Heineken, strong growth brands like Dos Equis, and the fastest moving national and local craft brands is key to minimizing out-of-stocks and increasing sales,” he says.

Optimizing assortment also improves sales, Saytal says. “At Heineken USA our commercial marketing team is focused on bringing unique shopper insights to our retail partners, helping them develop assortment flow plans based on who their shoppers are, how they shop, what occasions they shop for and what segments and brands they shop,” he says.   

Consumers are showing an interest in learning about the ingredients used in the brewing process and about the people behind the brands, Potthoff says.  “Recently we rolled out a new campaign for Budweiser—‘Brewed the Hard Way’—a bold and proud statement affirming Budweiser’s quality and role in beer culture. We’re pleased to see that the spot has contributed to renewed interest in this iconic brand.”   

For Bud Light, Anheuser-Busch has introduced 28 team-specific cans for the 2015-2016 football season as part of its “Official Beer Sponsorship” with the NFL. “Each can features a scroll message customized for each team’s fans, which is a fun, relevant way to connect the packaging to the passion and excitement consumers have for their teams,” Potthoff says. “In stores, we’ll also have special team-specific NFL displays and massive programming to highlight the Super Bowl’s 50th anniversary.”

Canned beer is seeing a major revival, says Ron Skotleski, director of marketing at Crown Beverage Packaging North America, a leading supplier of aluminum cans to the beverage industry, and division of Crown Holdings, based in Philadelphia. “The word is out on cans over glass,” he says. “The vast majority of new brewers looking to get into retail go straight into cans, and most of the larger craft brewers are looking to get into a canned offering as well.”

According to Skotleski, cans offer several advantages over bottles. “Cans get colder faster and stay colder longer,” he says. “Products in cans are for more portable drinking occasions like hiking, the beach or camping, and cans are better at blocking out UV light transmission.”   

Cans are also infinitely and completely recyclable. “We have our Crown 60 Promise, which is where a can is turned back into a new can within 60 days,” Skotleski says.

On the other hand, MillerCoors is going back to the future with glass.

“Miller Lite is coming out with a steine bottle that is basically a replica of the first Miller Lite bottle from 1975,” says Marty Maloney, manager, media relations, at MillerCoors, based in Chicago.

MillerCoors is also rolling out Blue Moon White IPA.

“Our brew masters wanted to combine the citrus flavors of an IPA with the smooth, balanced malts of a Belgian white Belgian-Style Wheat Ale,” Maloney says. “They began by experimenting with hop after hop until they found the perfect combination of four hops, including a rare German hop called Huell Melon. The result is a pronounced citrus and fruity hop taste, perfectly balanced by wheat, coriander and orange peel.”    

New craft brewers often have to seek out a niche to get placement on crowded shelves. Dr. Jeckyll’s Craft Brewery has found one for its Irish Red, Spiced IPA and American Kölsch bottled beers.

“There is really no other beer company like us,” says Tom Costa, president and CEO of Altadena, Calif.-based Dr. Jeckyll’s. “We’re the world’s first and only organic craft beer that is vegan friendly and brewed with super foods in a very synergistic way. Our American Kölsch, for example, is brewed with super foods that help increase metabolism and burn fat, such as green coffee bean, raspberry ketones and grapefruit fiber.”

Another unique selling proposition for Dr. Jeckyll’s is that the company gives one percent of its proceeds to charity, the Wounded Warriors Project in the case of American Kölsch, American Cancer Society for Spiced IPA, and American Heart Association for Irish Red. “The charity coincides with what the beer is all about,” Costa says.

Catchy promotions also stir consumer interest and build sales, brewers say. Heineken USA, for example, has teamed up with the latest James Bond film SPECTRE. “Heineken will be running a fully-integrated promotion including heavy retail activation featuring dynamic Bond-themed promotional packaging on Heineken Lager and Heineken Light, mass displays with movie themed enhancers and eye-catching POS materials driving shoppers to enter a sweepstakes for a ‘1 in 007’ chance to win movie tickets,” says Saytal.   

HUSA’s Mexican import sister brand Dos Equis recently launched the newest version of its Beers of Mexico variety pack. “It includes a new, limited edition, Dos Equis Roja—a distinctive red lager crafted with Mexican malted barley and hops—that joins Dos Equis Lager, Tecate and Sol in one convenient Fiesta Pack,” Saytal says.

The big brewers are also getting into the craft beer business to build market share.

MillerCoors recently acquired Saint Archer, while Heineken has acquired a 50 percent ownership stake in Lagunitas Brewing Co., the fifth largest craft brewer by volume.

“Craft brewers around the country have brought renewed interest to beer,” says Anheuser-Busch’s Potthoff. “We’ve bolstered our portfolio by bringing established craft brands into the mix through acquisitions of Goose Island, Blue Point Brewing, 10 Barrel Brewing and Elysian Brewing. These brands have a tremendous following and we’re excited to maintain the culture and character they had when they first opened their doors and bring them to more beer drinkers across the country with the power of our distribution network."  

The Beer of Champions

General Mills’ Wheaties brand cereal has partnered with local Twin Cities brewery Fulton to create a limited-edition Hefeweizen beer. Available only in the Twin Cities market, HefeWheaties is the first alcohol partnership for Wheaties, and represents a teaming of two Minnesota-based companies to create a “beer for champions,” according to General Mills officials.

Hefeweizen is a south German style of wheat beer, typically brewed with more than fifty percent malted wheat, making it a natural fit for a wheat-based cereal. It is typically served in a traditional Weizen glass.

“Like many novel ideas, HefeWheaties was born out of a barroom conversation between two friends,” says David Oehler, Wheaties marketing manager, at General Mills, based in Minneapolis. “Fulton was there from the beginning, and we couldn’t be more thrilled to partner with another outstanding Minneapolis brand.”

Founded by four home brewers in a one-car garage in 2006, Fulton has grown to two breweries, a taproom next to Target Field and a 50,000-square-foot production facility in Northeast Minneapolis. Its beer is distributed in five Midwestern states.