Craft, Imports Propel Beer

Beer2Beer has long been a staple of convenience stores—a destination stop for adult consumers looking to pick up a 6- or 12-pack on the go. But over the years, consumer trends have changed exactly what they’re picking up.

The first change came in the 1970s and early ‘80s, when the Baby Boomer generation matured, and these new adults, looking for perceived healthier alternatives in their food and beverage choices, began to turn away from full-calorie brews and toward their light counterparts. Indeed, light offerings became the leading brands for the major American brewers—Anheuser-Busch, Miller and Coors.

Next, largely fueled by the popularity of alternative American brands, such as Samuel Adams, Anchor Steam and Red Hook, a shift towards craft beers occurred. This was the result of the maturing Baby Boomer generation spending more and drinking less. The other segment that benefited greatly from this more-less dynamic was imported brews, such as Corona and Heineken.

According to Information Rescources Inc. (IRI) data, domestic brews remain king in U.S. c-stores, accounting for a rock solid 71.27% of retail dollars generated in the $16.7 billion category in 2013.

What’s Selling Now
Retailers, however, need to be tuned into current trends as there are signs that the gargantuan domestic beer category might be changing. For instance, the domestic premium category—a staple in c-store cold doors—showed signs of slippage last year, down 1.1% from 2012. Domestic sub-premiums (down 5.1%), and domestic malt liquor (down 5.77%) also declined.

Instead, consumers continue to spend more on high-end offerings such as craft brews, imports and progressive adult beverages, including wine coolers and flavored malt beverages, such as hard lemonade and tea products. Those three segments accounted for 58.61% growth in an otherwise flat category according to IRI.  Hard ciders showed dollar growth of over 200% in 2013, but represented just .30% of overall category sales. Wine sales saw an 18.85% gain over 2013 dollar totals.

“We’ve seen for years that Americans of legal drinking age are no longer only beer, wine or liquor drinkers,” said Jennifer Zegler, global food and drink analyst for research firm Mintel. Instead, they’re dabbling in a range of alternative alcoholic beverages, such as craft brews, hard ciders and sparkling alcohol offerings. “This thirst for variety has led to flat volume sales, even though people are buying more of much-smaller segments like craft beer and hard cider,” Zegler said. ◆

C-Store Liquor Sales by Segment
C-store consumers continue to migrate from domestic premium and sub-premiums beers to higher-end offerings.

SEGMENT

Dollar Sales

Percent Change

Domestic
Premium

Domestic
Sub-Premium

Imported Beer

Craft Beer

Progressive Adult Beverages

Domestic Malt Liquor

Cider

Wine

Craft, Imports Surge…

While domestic sales were sluggish, craft and import sales were strong in convenience stores, Technomic reported. This is good news for retailers because craft and import beer drinkers spend more on each trip to the store with case sales as much as $16 higher for craft beers than domestic brews.

                                Dollar Sales    Sales % Change       Case Sales    Average Case Price
Total Import               $1.93 Bil           7.87                      65.38 Mil           $29.51
Total Craft                $446.69 Mil        24.61                     12.01 Mil           $37.23

…While Domestic Takes a Hit
As sales of craft beer rise, it appears to be coming at the expense of domestic brands, IRI reported.

                              Dollar Sales    Sales % Change    Case Sales    Average Case Price
Total Beer              $16.67 Bil              1.46                775.38 Mil            $21.50
Bud Light                 $3.99 Bil             (1.31)              187.78 Mil            $21.26
Budweiser               $1.39 Bil              (2.94)               64.80 Mil              $21.39
Coors Light              $1.32 Bil               3.32                61.77 Mil              $21.44
Miller Light              $1.02 Bil             (3.72)                47.71 Mil             $21.47
Natural Light          $774.1 Mil             (8.33)                47.99 Mil            $16.13
Corona Extra           $632.5 Mil               7.9                  19.67 Mil            $32.15

Source: Information Resources Inc. (IRI), Total U.S. Convenience AllScan, 52 Weeks Ended Dec. 29, 2013

 

7ads6x98ycss.php