Data mining software can be an amazing useful tool to give you dynamic views of sales data with comparison charts and graphs that will give you a new perspective of what's actually happening in the retailer accounts. For instance, we looked at some of the non-alc products and at different roll-out times and noticed that there is some cannibalism and there is also an overall increase in sales in the combination of products. Does that mean no one product is greater than the whole? Try and tell that to Monster. I think it means a category success is dependent upon a variety which in turn increases the number of consumers interested in sampling the products of that segment. ( Nothing new there, no rocket science on that thought, it's already been proven).
So such is the craft beer segment today, the success of beer and the success of imported beer followed by the success of craft beer delivers an explosion in beer sales especially in craft as new brewers are brought to market. To use wine as an analogy, you start with lower end wines that are not particularly palatable and then as a wino you move towards more palatable wines. Could you have started with those if you hadn't developed the taste with easier, lighter drinking wines? My point is that all parts of the category contribute to the overall success of that category.
Now let us look at the retailers and the beer segment. As we know there are many chain and independent stores that have a very small craft beer segment which to many of the craft beer industry people is a problem caused by the big brewers of pale, fizzy lagers. So their goal is to move them off the shelves to increase the number of craft beer packages and specifically their own beer. Good goal, and at first glance that seems to be a good strategy however the problem with that strategy is that the reason those pale, fizzy beers are on the shelf is because around 90% of the beer drinkers are buying them and that's dollars for the retailers. Why would the retailer want to move a proven seller off the shelf to replace it with an unknown? The retailer's first thought is that he will have to spend more time stocking the shelf with pale, fizzy lagers and he does not like that at all which is why the shelves are the way they are.
So, what is a good solution of this cannibalization of shelf space? Can there be a Total Wine and More within walking distance for eveyone? If you have one of those big box chain liquor stores you know what I mean, they carry everything and what's kept cold are the beers that appeal to the masses and you can buy the craft beers warm and hurry home and throw them in the fridge. Since, that's working so well for them, when will I see a brewery market/sales rep go to market with a plan to encourage warm shelf development at regular liquor stores. Quit the whining about the big brewers and have a plan to convert warm shelf space to craft beer.
Success stories are a very influential method to influence retailers. Why? Because they want to get in on the latest money making craze. They know all about traffic count and the need to increase it. I will be going to the Craft Brewer's Conference again this year and sitting in on the wholesaler meeting and invariably someone will begin whining that the big brewers are keeping the small wholesalers from getting to the shelf. Nothing could be further from the truth. As a wholesaler you first need to have all of the resources that get you to the discussion table so you can get on the shelf and then you must understand data. A small wholesaler that tells his supplier that the big brewers are keeping them out are doing the brewer a disservice. Store space is available, you just need to target the right space and then the retailers will catch up with the craft segment.
As you look at bars and stores, you see an increase in craft beer space but it's moving forward at a pace behind the current craft explosian so retailers need an education. These liquor store owners are not the greatest risk takers in a down economy so brewery reps spending time with them and sharing data has an impact. I wonder when the brewery reps will begin making independent liquor store calls along with their chain buyer calls? When will they realize that craft beer bars are not the only independent accounts in the world because they are only concentrating on tap handles?
We are looking for love in all the wrong places. The retailers are not causing the canibalization of shelf space, the industry itself is by not educating independent retailers on providing warm shelf space. How can the explosion continue if there isn't space for the products? I would like to stop at any corner store on my way home from work and have a variety of beers to select from that are cold or warm.