CRU14 Insights: The Evolving Beer Drinker

Consumer wants have changed and retail strategies should, too

Published in CSP Daily News

Bob Gulley of Kangaroo Express convenience stores

Bob Gulley

GLENDALE, Ariz. -- Bob Gulley is a believer in product innovation, a big believer.

“I take all innovation [into my stores] instantly,” the director of beer, wine & spirits at The Pantry/Kangaroo Express he said during a Convenience Retailing University course titled “The Evolution of Beer, Wine & Spirits.” “If [a new product] is coming, like Miller Fortune, I want it in my store on day one.”

Why? Because innovation is what’s driving beer sales these days, he said.

“If you’re not in innovation, you’re not taking advantage of the opportunity in the beer segment.”

It helps, he said, if the manufacturer has a healthy marketing plan to go along with the new-product rollout. And if part of that marketing includes POP materials for retailers, he wants in.

“I advertise what’s new,” Gulley said. “The customer already knows I’ve got 18-packs of Bud Light.”

Beer consumers are more willing to experiment than ever, he said. “This shift has required suppliers to push their boundaries to adapt and grow.”

One way Gulley is taking advantage of this experimentation is by focusing on single-serve beer, with three shelves of 16-ounce singles in the cold vault and “ice units in every one of our stores.”

The customer may not be ready to spend $9.99 on a 6-pack, but they can afford $2.99 or less for a single-serve can that serves as a sample taste. So he’s pushed manufacturers to develop single-serve packages of craft beers and other high-end brews, and it’s paid off with brands such as Blue Moon, Shock Top and Red Hook now available and “selling gangbusters” in Gulley’s stores.

And with premium and sub-premium beers struggle to maintain share, the strategy involves developing a well-rounded product offer.

“I’m not going to walk away from the premium brews,” he said, “but I am going to offset it.”

How beer shopper wants and needs have evolved over time:

What consumers wanted then

What they want now

Domestic offerings (premium, economy)

Above premium (higher alcohol, flavors)

Cold beerIce-cold beer
Value pricing2/$3, etc. price bundling
Out-of-home, in-store advertisingMobile moments
Right package, right occasion

Demographically relevant assortment

Future consumption (multipacks)

Immediate consumption (single serve)

 

Keywords: 
beer, wine & liquor