Fall Shelf Sets: More Doored Coolers, Harder Look at Craft

FILED SEPTEMBER 14, 2016

Dear Client:

We've been talking to some retailer and consulting sources to gather info on how the Fall round tables went for setting off-premise chain Plan-O-Grams as we enter football season.

One thing is for sure: Craft is still the fastest growing category -- so it won't lose aggregate space necessarily -- but a few chains we talked to said they will be re-jiggering their space toward fewer SKUs of major craft brands (New Belgium, Sierra, Sam Adams, Blue Moon, Shock Top, etc.) and more local craft facings.

BIG CHAIN REDUCING CRAFT SKUs. Big national chains, including Wal-Mart and Kroger we hear, are in fact reducing slower moving craft SKUs in favor of increasing days of supply (shelf space) for faster moving brands -- think FMBs and Mexican Imports.

Has the pendulum started to swing back? We'll see, it's early days. Again, we note that craft beer is still the fastest growing category in the bev-alc space (other than FMBs, depending on how you define them).

FIVE CRITERIA FOR SETTING SHELVES. Our friend and consultant Bump Williams sent us a missive which really boils down concisely what is going on at retail:

1. Local and strong performing regional labels is still a "free pass" for getting on shelves and grabbing a draught line.

2. While I would have expected MORE from "what's new", I've actually seen a bit of a slowdown in these new items getting draught lines and facings.

3. High-end is getting more shelf space driven by Mexican imports, Belgian imports, Mich Ultra, crafty imports and of course sweeter flavored drinks and true American craft beer.

4. I'm watching category captains' brands getting/keeping their shelf space regardless of brand performance and it's all about "saving shelf space" for big domestic (sluggish trends) brands.

5. At the end of the day the brewers who write the biggest checks (biggest volume brands) are not losing facings, shelf space or draught lines (to a smaller degree) the way they should be. Those big brands and the investment $$ the bigger brewers spend in the marketplace are assuring that the mature, declining brands remain fully stocked and packed out.

CLOSED DOOR COOLERS. Another development: This just in, from a refrigeration company source (yes we get our sources from everywhere). Off-premise chains grocery and mass-merch stores (in particular Wal-Mart) are moving toward using doored coolers rather than open space door-less coolers. It's part of a commitment of going green and reducing their carbon footprint (but also the benefit of reducing electricity costs).

BAD FOR BEER. But for beer, it means a more difficult way of merchandising the stores, particularly if the shelves aren't filled from the back from a beer cave. As one retailer told me, beer caves are out of fashion now because ZERO women will go in there (and I don't blame them) and few men will, and it's a merchandising and rotation nightmare.

TOWARD A C-STORE COOLER MODEL. The same refrigeration company told BBD that "we only get RFPs [requests for proposals] these days for door coolers. Before we'd only get work for that from convenience stores, but not anymore."

Here's the thing: Saving energy is a good thing of course, but hiding beer behind glass doors with a glare will cut overall beer sales by an estimated 1 - 3%. How did I come by that number? What's my methodology? I admit, it's gut instinct only.

A DIFFERENT MERCHANDISING STRATEGY. Other than losing sales, there's another factor: Merchandising strategy. Open air coolers rely on a shelf set based on the average consumer flow through the store. A doored cooler strategy must take into effect the lift from putting certain products near the handle of the door. Handle and eye-level criteria become much more important than being first in the natural traffic flow through the store.

This is a seismic shift in basic beer sales strategy that will become more important as more major chains move toward closed door coolers, and fewer beer caves (which provide beer distributors with a natural back-stock which they of course like).

BEER BRIEFS:

YESTERDAY A FEW OF THE NBWA'S Next Gen group took offense of me calling young people dumb.

Here's my response: Well of course you're not necessarily "dumb". What I meant is, maybe, "willing to learn more"?

Look, people on this earth fewer years than us old folks by nature know less, and the Next Gen group's very reason for being is to close that gap. That's what I was getting at. I regret if I dissed any of you. We all good, brahs?

Until tomorrow, Harry

"Be polite, be professional, but have a plan to kill everyone you meet." - Gen James Mattis


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