Shelf Space

It's going to take eternity for BMC to disappear.

 

Based on the sales just in our store, they're not going to disappear any time soon. 3:1 is Bud Light to any other beer in our store, and 7:1 is about any macro to any craft. It's sad.

It just leaves more for us I guess.

 

Don't care

 

Reminds me of how odd it is that so many grocery stores only have two labels on their beer section: "Domestic Beer" and "Import Beer."

And Samuel Adams, Sierra Nevada, New Belgium, and beer from three different breweries located within 50 miles of the store are all in the "import" section (along with a relatively small selection of actually-imported beers like Dos Equis, Modelo, Heineken, Stella Artois, and Newcastle sandwiched right between the Bud Light and the American craft beers)...

 

These distributors buy this space. I used to do this for a couple years. They give them tickets to concert and sporting events or get the VIP access to local events. This is a big game....those with the money will make sure they don't lose it, even if it is just all smoke in mirrors.

 

My local chain grocery store is loaded with craft beer. BMC still there but occupies a small % of all of that space. A couple of years ago my guess is it had about 90% of space.

 

The question is "are the mega brews going to disappear from the shelves". Not in my lifetime. Way back up in this thread someone said money talks,and as long as it does you will see those beers prominently displayed in the local "packy" or grocery store. Having said that, I have watched 'craft beer" take over sizable shelf space in these places in the last 20 years,sometimes center of an aisle in local grocery stores here in New Hampshire. There are multiple stores within short driving distance of me in both Ma. and N.H. that are dedicated to craft beer only. No BMC allowed.
Peoples tastes are changing. Local brewerys are attracting more and more people like us who want quality over quantity.
However, at $10.00 a six or a four pack are we pushing away those people on the fringe. But I guess that would be a subject for a different thread. Money talks.

 

That´s hard man, I don´t think that´s going to happen. I have a podcast reviewing craft beer, more than 50 episodes and the one with the most views is when we talked about the "craft" beer a mega brewer just released in Mexico.

 

The irony to all of this is that the Billboard Effect (massive shelf space in one area due to many packages to make a singular brand stand out, see: Beer Wars) is still very much in place, only now it's craft brewers doing it. Think about some of the larger craft brewers, as an example without naming names: Flagship Brand is sold in 6pk Bottles, 12pk Bottles, 22oz Bottles, 16oz 4pk Cans, 6pk 12oz Cans, 12pk 12oz Cans. That's six SKUs right there. Then their IPA comes in 6pk Bottles, 12pk Bottles, 16oz 4pl Cans, and 22oz Bombers. Then 3 other Core brands. That's 3-5 more SKUs. Then seasonals in 6's and 12's. And a variety pack. And the Nerdbait series in 22s or 750s. So you're potentially looking at 18-25 SKUs from one large craft brewery alone. Having to pick and choose between all those as a buyer is a nightmare. I never want to tell a customer no, but i simply cant bring them all in.

To put things in perspective as well, i have ~2,600 SKU's at any given time, but over the course of the year i'll have sold ~5,000 unique SKUs. And more breweries keep coming to the market.

 

I think the better question is how do we keep the shelf space we have with craft. With only 10% of the market craft beer has a huge amount of shelf space. The good thing is even 10% is enough of an incentive to maintain some shelf space. My biggest worry is that when the segment stops growing at 20% we will see a lot of shelf space go away. The last thing I want to see for the industry is that craft beer becomes a specialty item only sold in specialty stores.

 

Oregon is way ahead of the rest of the country in percentage of craft beer consumed (http://oregoncraftbeer.org/facts/). But there are still plenty of full cooler doors of macro lagers, Coors Light especially.

 

This is incorrect for most big chains and stores. Most stores keep BMC razor thin to compete and get people in the door. Craft usually has much better margins especially on limited stuff.

 

With AB/In-Bev's recent purchase of 10 Barrel, it seems like an inordinate amount of shelf space is now devoted to their beers here in Oregon. Haven't seen a corresponding increase in Elysian yet, but it will probably come. Elysian's "Loser Pale Ale - Corporate Beer Still Sucks" beer is still on the shelves, LOL!

 

I wouldn't lump Starbucks and Subway in with Mcdonalds.

 

I was at the local Safeway in Alexandria Virginia the other and a rep from Devil's Backbone was guvung out samples (I tried the dubbel). OTOH there were larger displays for DFH and local Port City. Craft seems pretty mainstream here.

 

Living in Michigan I can tell you that we have a ton of great breweries & Michiganders are very loyal so it seems like the space on the shelves seems to keep rotating to each new, hot, out of state brewery that hits MI. They seem to come in with a splash then seem to fizzle out with a lot of their stock sitting for a long time. I can't wait for Alpine later this year but fear that there won't be enough people that become familiar with the brand & that they fizzle out quickly like others have

 

That's an interesting perspective from the retail side of things. I hadn't thought about all of that.

 

I think there are 2 major issues at play here.

1 - money. The big brands move big volumes and turn inventory fast, leading to steady income. No matter how much shelf space they have, they will turn and make money because the target audience is so large. 1 facing, 2 facings, or however many, macro lagers will turn and pay the bills.

2 - craft saturation of the shelf. There is only so much shelf space, even if you reduce macro to 1 facing, the competition for the other space is tremendous because every 6 seconds a new Tom, Dick, or Harry is opening a brewery and trying to distribute. It's really craft fighting craft at that point, and there is only so much real estate to go around.

 

Have you ever shopped in Wisconsin? My number one SKU is New Glarus 6 packs. 2-10 are all BMC related. My store built a walk in cooler dedicated to the cheap shit. Trust me, it keeps the lights on.

Same reason I buy 100 cases of Kendall Jackson Chardonnay and 200 cases of Korbel Brandy. Those air condition this place...and damn, it's cold.

 

What will quickly replace so much of what you call "domestic" is "crafty or former craft" owned by AB/Coors. It is just less obvious. Even with the rapid expansion of small/super small local brewers, the conglomerates are picking up labels quickly and they aren't buying the tiny ones. Blue Point all over my local grocery store in NC now and you trip on the Goose Island display as you go past it. The Red Hook display was also enormous. There does not seem to be any sign this trend will do anything but accelerate.

Less Macro--yes

Less AB/ MillerCoors down the road in the grocery case than today?--not so sure.