Getting Back to Beer

America’s changing demographic will continue to add new contours to the beer category, and that has some operators optimistic that beer could experience strong spring and summer selling seasons.

The major breweries are expected to introduce products that target health-conscious consumers. For example, SABMiller this month will begin test-marketing its Miller Lite Brewers Collection, consisting of a low-calorie, low-carb blonde ale, amber beer and wheat beer. Beyond that, brewers can be expected to take fuller advantage of the growing demand for seasonal beers.

Anheuser-Busch is working to build market share among Latinos with a huge marketing push behind Budweiser and Bud Light. The brewer plans to increase spending by 25% this year in Spanish-language advertising, including billboards and local radio. Spending on national outlets such as Univision and Telemundo will reportedly rise 45%. The largest U.S. brewer spent about $26 million on Spanish-language advertising in the first nine months of 2007, according to New York-based research firm TNS Media Intelligence.

Anheuser-Busch recently extended its Bud family to appeal to Latino drinkers. The introduction last year of Bud Chelada–a tomato cocktail pre-mixed with Budweiser or Bud Light–targets Mexican-American consumers, many of whom are already drinkers of similar "clamato-type" cocktails. Sales in the wake of Chelada’s rollout Texas and California justified national distribution. A-B also credits Chelada with boosting sales of regular Budweiser and Bud Light in some Latino markets.

Growing beer sales
Plaid Pantries Inc., the Beaverton, Ore.-based marketer that operates stores in Oregon and Washington, carries about 135 beer SKUs, spread across five to seven cooler doors, in a typical set, said Tim Cote, vice president of marketing for the 101-store chain. There are also beer displays on the sales floor. Management relies on store-specific sets.

In all, the chain manages more than 60 unique beer sets, according to Cote. The craft brews that Plaid Pantries stocks are distributed locally, but come from just about every western state. Budweiser and Miller account for "a surprisingly low share," Cote added.

The craft beers help turn Plaid Pantry stores into destination locations. "We carry far more craft beers than a typical convenience store," Cote said. "There are some independents that give us a run for our money–in fact, there are independents out there with bigger equipment to carry more than we do. But for a chain convenience store, yes, we probably have the best craft and import selection in the market."

Pricing should be better on seasonal beers, especially summer seasonals. "They are very drinkable products in general," Cote reasoned, "and they are not real high on hops, so there won’t be as much price pressure on them. That will be a lot of our focus, seasonal beer."

Cote said that he and his colleagues have detected "a little bit of a trend back toward the beer category in general." His chain offers a well-developed wine offering, and staffers have picked up on "indications that the wine customer is starting to trade down a little bit."

Research, Cote believes, tends to confirm this. "Beer is an affordable luxury. When customers have to pay that extra five dollars or six dollars to fill their gas tanks it’s got to come from somewhere," he said. "Well, they’re not going to stop drinking beer, but they may change which beer they are after." The craft category in particular, he added, is going to be "much more about promotional craft brands (than) full-price craft brands."

Other trends are emerging, especially in high-end beer, back to the 22 ounce bottle. "A lot of the craft brewers who had been there and gotten out of it are now coming back to it, and the customer is responding," Cote said. "The craft customer by nature is kind of an experimental person: ‘Give me a little bit of this, give me a little bit of that.’"

Cote said operators must work with the brewers on what SKUs are more profitable for them, "and which SKUs aren’t going to do silly things. Not all craft brews are these super-hopped-up products that the typical beer drinker can barely gag down. There will be quite a bit of pushing towards ambers and pales and things like that this year."

That pushing, in fact, may take the beer category in a variety of interesting directions.


Speak Your Mind