Are retail stores struggling with craft beer in 2019?

Discussion in 'Beer Talk' started by bubseymour, Jun 3, 2019.

  1. bubseymour

    bubseymour Poo-Bah (2,415) Oct 30, 2010 Maryland
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    Over the last 2 years, I've noticed at least 2 stores in my area that were "cream of the crop" in craft beer, purging their selection big time. One store was the "best value" store. Always had the lowest prices in town on 6er's and bombers. Most of the bombers and 750mls are gone from their shelves (maybe because bombers are out of style now), but they haven't adjusted to the times and just scaled way back and no longer offer very much above a typical store in the area. The 2nd store, was in a very affluent area with larger population base, and had one of the best single bottle sections in the whole area. They cut back on their singles by 50%-75% or more in the last 6 months.

    A 3rd store, that has always been the best overall with single bottle offerings used to be only maybe a 10-20% markup to buy singles over 6ers/4packs, but have drastically increased their single bottle offerrings substantially, to the point it doesn't even make it reasonable to buy a singles anymore ($16 /4 pack 16oz'ers go for $7.99 if you buy a single can on my last couple visits...that's crazy)

    Anyone seeing retail store doing radical adjustments in last year or so?
     
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  2. nc41

    nc41 Poo-Bah (1,810) Sep 25, 2008 North Carolina
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    Yep. Empty cooler space, a good bit of the Cali beers and out of state beers are long gone, a shit ton of local breweries on the shelf and floor. Slow tuning beers are long gone, the foot traffic has greatly slowed as well.
     
  3. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
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    My local beer retailers 'look' the same as they did last year and the year before. Lots of product available and a significant portion of those beers are too old. I have no idea whether they are operating profitably. Having so much old inventory could make you think they are not moving product well?

    Cheers!
     
  4. bbtkd

    bbtkd Poo-Bah (2,431) Sep 20, 2015 South Dakota
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    I was just noting the other day at one of my favorite stores that there are piles of KBS, SMS, and other "popular" beers that just seem to be sitting there not noticeably selling. Still eight cases of KBS, where three years ago it would be gone in an hour. For the customer it's nice to be able to get such good beer any time you want it, but it's aging on the shelf and it sure seems like the store must be hurting. It seems like Local beers and macro seem to be selling fine.
     
  5. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,636) Jun 10, 2016 Arizona
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    No adjustments I can see, I have noticed more of the old favorites sitting around like KBS and CBS, etc. Local supply has been solid, most beers that see distro in AZ still have solid showing, so all in all not a lot new to report. If anything the options have increased with a lot of new stuff we never got before now here.
    Cheers.
     
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  6. ovaltine

    ovaltine Poo-Bah (2,587) Apr 6, 2010 Indiana
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    I think we’re seeing a couple of things in play:

    1. “Drink Local/Drink Fresh” is very real and a conundrum for the breweries that are bottling/canning and distributing to anyplace past 100 miles from their brewery. You either need to be really small (and fresh), or have the scale to literally go national (I’m looking at you Sierra Nevada, Bell’s, Founders, and a couple of others), or stay within 4 or 5 states of your base and have enough swag to have the gray market do the rest of the heavy lifting for you (Three Floyds, Tree House, Russian River, etc).

    2. Having a core lineup that translates to beer nerds and newbies alike is important. Chasing trends is scary stuff. I’m looking at you, Toppling Goliath, and your shift with your core lineup to all things hazy.

    3. Beer nerds are a fickle lot, always chasing the next new beer. Refer back to #1.

    It is a great time to be a beer nerd. It is not such a great time to be a brewery chasing beer nerds.
     
  7. Bitterbill

    Bitterbill Poo-Bah (6,568) Sep 14, 2002 Wyoming
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    One store in Casper that had the best(cheapest) prices cut way back with the imports and limited releases from the "local" market but thank goodness the leader in town just keeps on ticking.
     
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  8. Longhorn08

    Longhorn08 Aspirant (219) Feb 4, 2014 Texas
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    Latest data available also show global beer sales are declining.
     
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  9. HopsAreDaMan

    HopsAreDaMan Defender (667) Jul 28, 2015 Missouri
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    Do you have a link to that data or some way to reference the source of the data? Thanks!
     
  10. tinoynk

    tinoynk Initiate (75) Sep 25, 2010 New York
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    Here in NYC, I feel like to-go craft beer has actually gotten a bit of a bump with the recent NEIPA driven boom.

    There’s an increasing amount of people in Manhattan want to drink stuff like Other Half, but if you work a lot and aren’t really about that life of trapseing back and forth from Brooklyn, you’ll definitely pony up $7-$8 per can for Finback/Singlecut/etc.
     
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  11. Obsidian81

    Obsidian81 Initiate (43) Mar 3, 2016 Illinois
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    I see a ton of expensive beers with short shelf lives (hazy IPAs) sitting on shelves forever due to their price. I feel like retailers have to be taking a beating in this scenario.
     
  12. HopsAreDaMan

    HopsAreDaMan Defender (667) Jul 28, 2015 Missouri
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    All of the Whole Foods in my area cut way back in terms of what I would call the higher-end stuff that usually comes in 4-packs or only as singles. For example, they used to carry most of the hard to get Bell's releases, but over the last 6 - 9 months or so I haven't seen really anything like that. I talked to their buyer at one of the stores at the end of last year and he said there were big changes once Amazon bought them out. :slight_frown:
     
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  13. HorseheadsHophead

    HorseheadsHophead Poo-Bah (1,689) Sep 15, 2014 New York

    My local retail stores have actually expanded and improved their beer selection. My only complaint is that most of the expansion is dozens of high-priced new NEIPAs replacing old standbys. :confused:
     
  14. MNAle

    MNAle Meyvn (1,445) Sep 6, 2011 Minnesota
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    I've posted this observation before, but in my regular liquor store (a small, locally-owned establishment), I have observed a reduction in cooler / shelf space allocated to national craft brands (SN, BBC, Stone, Deschutes, etc.), and an increase in space allocated to "barely distributing" locals; some of these come and go, some are in hand-labeled crowlers, but the cooler space allocated to them in aggregate has increased. Also scaled back (but not as much as the national brands) are the "local regionals", in this case that means Schells, Summit, and Surly. Expanding significantly are the "captive craft" brewers, especially those owned by AB-Inbev, but also including to a lesser extent Founders and Lagunitas. Macros have remained about the same, including "local" macro brand Leinenkugel.

    So, two types of craft beers are taking a hit in shelf/cooler space: national craft and local regionals. Those with big money behind their marketing are holding their own or expanding, and while the purely local brewers have expanded shelf space, the makeup of who is there and who had dropped back or out is highly volatile.

    I have no idea how this affects the store's bottom line, but it has to be a big challenge to the beer buyer.

    .
     
  15. Longhorn08

    Longhorn08 Aspirant (219) Feb 4, 2014 Texas
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  16. miwestcoaster

    miwestcoaster Savant (926) Jan 19, 2013 Michigan

    I have been noticing a shift of shelf space to InBev and MillerCoors brands and away from independents that are limited volume (and I am guessing revenue for the stores). I don’t blame the retailer. They are in business to move product and perhaps their whole sale rep is helping them. I enjoy a good porter, and if Founders, Great Lakes, and Deschutes Porter is on the shelf, what else do I need or want as a buyer? Most of the time I try a new to me beer I have buyers remorse and think why didn’t I buy Bell’s Two Hearted or a German Pils that I know is good.
     
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  17. JrGtr

    JrGtr Disciple (389) Apr 13, 2006 Massachusetts

    The hard part from what I can see is keeping up with all the new beers that are coming out every day (it seems) while trying to predict trends. For the moment anything hoppy and hazy will sell, but beers that were uber-popular a couple years ago are now sitting. KBS, for example - a couple years ago if you weren't in line on delivery day, you weren't getting any. Now, it sits for months, if not till next years release.
    You really have to make sure you're not over-buying brands, at least in the craft world - it seems rare for us geeks to buy more than a 4- or 6-pack of something, let along 12s or cases, unless there's a party or something involved.
     
  18. HopsAreDaMan

    HopsAreDaMan Defender (667) Jul 28, 2015 Missouri
    Society

    Thanks for that.

    Here are what I thought were a few interesting quotes from the article:
    "The beer segment suffered the biggest blow of all alcohol markets at -1.5 percent."

    "'It's clear that Americans are drinking less overall, which is likely a result of the continued trend toward health and wellness,' said Brandy Rand, IWSR's U.S. President and global Chief Marketing Officer in a press release."
     
  19. FatBoyGotSwagger

    FatBoyGotSwagger Meyvn (1,270) Apr 4, 2009 Pennsylvania

    The rise in popularity of Hard Seltzer has taken a lot away from crafty beers. Not to mention more SKUs then ever and there may be more options but more then half are rotting on the shelf.
     
  20. Justonemore91

    Justonemore91 Aspirant (228) Nov 24, 2018 New York
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    I recently had a convo with a beer buyer at my local supermarket... I asked him why singlecut and Grimm songle cans were marked at 6.99 to 7.99 and he showed me an invoice from two different distributors... They were being charged $95 for grimm and over $100 for singlecut.. Retailers are paying $4 a can and being in the city with the high rents and all I completely understood... He wasn't selling these neipa at a fast turnover rate and explained it his bosses that freshness matters.. All they cared about was maintaining the profit margins to pay the rent and employess
     
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  21. Hoos78

    Hoos78 Aspirant (244) Mar 3, 2015 Ohio

    Yeah, since the Amazon buyout my local Whole Foods selection has petered out. On the flip side, the nearby Wal-Mart's selection has far surpassed Whole Foods :rolling_eyes:.
     
  22. ypsifly

    ypsifly Meyvn (1,043) Sep 22, 2004 Michigan

    In some areas, more people are going to chain stores for beers that were the “bread and butter” for independents. Beers like Two Hearted and anything from Sam Adams, for example, were largely only available at smaller stores, but that all changed when the chain stores with their buying power and lower overhead got into craft. They can charge less on beer but make that back when you grab a gallon of milk or carton of eggs while you are there.

    Smaller “bottle shops” tend to have higher overhead and don’t sell items like milk and eggs to make up for lower beer margins, therefore lots of consumers are buying their beer at chain stores. Less sales of “bread and butter” beers means less money to put towards an expanded selection. It also doesn’t help that craft is getting so damned expensive. Those premium price tier trub cans aren’t cheap and put a serious dent in purchasing budgets leading to less money to put towards things like imports or craft beers that have a limited customer base ( like kombucha beers).
     
  23. stevepat

    stevepat Zealot (598) Mar 12, 2013 California
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    The places I buy beer most often have expanded their single large can selection, some seem to have reined in their brand breadth, one has added significantly more european beer, most have added more ciders, more gluten free beers, one has expanded their selection of large format mixed ferm/sour/wild sort of things. I rediscovered the old grocery overstock store's beer selection lately for half off some of the local ipas from the brewery that is obsessive about freshness (most cans are less than 2 months old at the overstock store, assuming they are what the brewery doesn't sell in those first 4 weeks). Overall it's a good time to be a retail beer consumer around here.
    I can get SN and the more established local offerings for 8.99 or less a six pack, I can get a selection of single cans from 1.99 for steam, sn, deschutes stove pipes on up to the $6 hip new ipa cans. I can get more obscure european stuff and could definitely walk downtown right now and get abottle of 3 fonteinen or tilquin, some saison from SARA, a couple options from Logsdons farmhouse ales, or a number of other fancy brands.
    I don't know how they are doing, and other than the place that has most of the fancy brands I get my beer from grocery stores/corner stores, and one place that sells alcohol and fancy tobacco, and fancy chocolates.
     
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  24. bubseymour

    bubseymour Poo-Bah (2,415) Oct 30, 2010 Maryland
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    For the retail stores that have made a shift to making alot of shelf and cooler space for the plethoral of new local/state 16oz/4 pack format cans, vast majority of them just aren't selling/moving all that well. Primarily due to high prices. Is that pretty much a universal truth we're seeing?

    I see this as the realization that vast majority of people that have been flooding these local brewery taprooms for the social & entertainment aspects and less so for the love of the beer being served. Move that product to retail shops at the same prices, and people buying from stores are opting for the lower priced options and passing on the expensive locals.
     
  25. ypsifly

    ypsifly Meyvn (1,043) Sep 22, 2004 Michigan

    This is where a singles section comes into play. I sell more of the expensive 16oz cans as singles than I do as packs. In the current climate of high prices and tickers it boggles my mind to see a store that does not offer singles.
     
  26. VoxRationis

    VoxRationis Poo-Bah (1,552) Dec 11, 2016 New York
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    I agree that the beer scene in NYC seems to have gotten a bump. More breweries, with Mikkeler and Evil Twin now represented, more robust choices in bars and restaurants, more bottle stores, basically just more.

    Throughout the rest of NY metro, i.e the 'Burbs, it really is all over the map. I have seen some big players in the area cutting back on international and craft, or going for safer bets in those categories, a few beer only outlets going out of business, while many grocery stores seem to be upping their game.

    Some of this is no doubt the "creative destruction" that Joseph Schumpeter describes and some of it is that, the more complex the offerings, the more difficult the inventory, and the more challenging the retail beer business becomes.
     
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  27. zeff80

    zeff80 Poo-Bah (9,632) Feb 6, 2006 Missouri

    I watched a Craft Beer Cellar from being the best choice for beer in town and watch it's supply dwindle and eventually close. The grocery store in town have pretty much replaced it, but could never quite match CBC's ability to pull any single from a 4-pack or 6-pack.
     
  28. dcall384

    dcall384 Aspirant (273) Aug 9, 2011 Indiana

    Here in Indianapolis I can see a decline too. There was piles of KBS sitting around in stores. Also there was a Firestone Walker mixed pack the I blindly bought and looked and it is almost a year old. Oh well still wasn't that bad. I have really had to check dates on beer lately because so much beer is just sitting on shelves around me.
     
  29. MNAle

    MNAle Meyvn (1,445) Sep 6, 2011 Minnesota
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    Maybe...

    Anyhow, according to the poster of that picture (linked post, then scroll down a few to get his reply of where that was), that was at the TG taproom.
     
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  30. mogulskier

    mogulskier Initiate (41) Feb 3, 2019 California

    Ditto. Alot of inventory of many styles, but they are 60-90-120 days and worse. You don't see alot of traffic unless an anticipated release comes out, then naturally alot of people show up for a very limited supply and customers are vocal about the fact they are only interested in that lone release and nothing else.

    But it is slowly starting to change and I am beginning to see a pull back.
     
  31. meefmoff

    meefmoff Zealot (590) Jul 6, 2014 Massachusetts
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    Thanks for your insider's view of all this. Can I bother you with a question I've been curious about? How stratified do you find your customers to be in terms of their purchasing? That is, if we were to lay out some categories of beer buying behavior, how common is it to have a given customer dabbling in more than one category? And do you find that the answer to this question is changing as time goes on?

    1. Macro buying folks
    2. Macro owned craft buying folks (Goose Island, Elysian, Lagunitas,etc.)
    3. Anything craft that isn't #2 buying folks
    4. Anything craft including #2 buying folks
    5. Stereotypical bottle chasing, ultra picky, few-repeat purchases craft buying folks

    Hopefully that's not too much of a mouthful of a question :slight_smile:
     
  32. MNAle

    MNAle Meyvn (1,445) Sep 6, 2011 Minnesota
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    Then there are people like me who buy all over the map.
     
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  33. meefmoff

    meefmoff Zealot (590) Jul 6, 2014 Massachusetts
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    Well yeah, that's kind of exactly what I'm asking. How common is it for people to dabble in more than one or all of those categories and is that changing?
     
  34. bubseymour

    bubseymour Poo-Bah (2,415) Oct 30, 2010 Maryland
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    I agree, we have 1 store in town that is willing to break those 4pack/16oz cans from locals and sell as singles. In the years of craft beer not being in 16oz cans, they allowed all shelf and cooler beers to be pulled as a single. And it was generally only ~15-20% markup in cost to buy a single bottle/can vs. the value in an unbroken 6er. Flash forward to 2019, and with all of the 16oz/4packs on the shelves now, they are allowing you to break those as well as a single, HOWEVER the price gouge for a single is rediculous and not even worth the gamble to try a single can. Just a real world example last week:

    $15.99 4 packs = $4 per can valuation
    When I bought a single can last week, the place charged me $7.99 for that can from a $15.99 4pack. That is a 100% markup if I'm doing my math correctly.

    So basically I'm now limiting my local NEIPA purchases, back to taprooms when I go for social/entertainment purposes and not from retail stores to enjoy at home (just like it always was).
     
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  35. bubseymour

    bubseymour Poo-Bah (2,415) Oct 30, 2010 Maryland
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    I buy all over the map as well (style variety). More obscure harder to find styles get generally more buying attention from me, especially if from a reputable brewer.
     
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  36. ypsifly

    ypsifly Meyvn (1,043) Sep 22, 2004 Michigan

    1. Tend to buy the same brand over and over. These are the most brand loyal and predictable customers.

    2, 3, and 4 All kind of blend together.

    5. Is the biggest pain in my ass. What they go for takes either long term planning or some kind of negotiating in order to get in what they go for, then its never enough to satisfy all of them but they are a reality in the business. They tend to buy only rare or limited items and their are several flippers among their ranks. I have to take measures to ensure that all limited beers don't just go to this crowd as the other groups are the people who do come in and buy beer regularly and keep the doors open.

    There are lots of people who might be in the 1 group and will break trend and ask when Hopslam or BC are coming because they "heard its really good" and I know some people who would fit in group 5 but have to have Hamm's or PBR when watching football or going camping.

    I hope my rambling answered your questions.
     
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  37. WesMantooth

    WesMantooth Poo-Bah (2,608) Jan 8, 2014 Ohio
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    I’ve seen continued expansion with selection. Numerous new states in the last 4-6 months. But that has just basically amplified the dated beer issue. Pretty much anywhere outside of the big cities it is hard to find in state ipas that are less than 2 or 3 months old, and easy to find numerous examples of year old beer.
     
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  38. NeroFiddled

    NeroFiddled Poo-Bah (10,711) Jul 8, 2002 Pennsylvania
    Society Trader

    I found the same thing with Whole Foods and I don't even bother to look anymore, I just get my other items and go.
    Also in my neck of the woods the GIANT grocery store chain has toned down their selection. They've completely stopped selling single bottles except for their mix-a-six which is just everything they have in six-packs. Most of the space from the single bottles was switched over to wine. I don't bother to even look at their selection either.
     
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  39. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    Would you be willing to guesstimate the percentages of your customers per category?

    For example x % are macro consumers, y % are pain in the neck beer geeks, z % are...

    Cheers!
     
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  40. rightcoast7

    rightcoast7 Disciple (317) Apr 2, 2011 Maine

    I agree, it frankly boggles my mind that so many people seem to enjoy paying $25-30+ for a mixed 4 or 6 pack versus taking a minor gamble that you might ::gasp:: buy one pack of beer from time to time they didn’t enjoy. Instead of maybe overpaying occasionally for a 4-pack of beer you didn’t like, you opt to drastically overpay for all of the beer you buy. The math makes no sense IMO. And with even a modicum of research or knowledge of what you’re buying, it really isn’t hard to avoid buying shitty beer.