Now, this is only useful when using similar products that attract the same consumer demographic and play in the same brand category. My findings so far have been, yes there is cannibalism in the house...no surprise to anyone in the beer industry. What is good about cannibalism is that there is a growth in the two products combined even though the mature product declined slightly. This is just like the growth you see in a category when it is developed more by an increasing number of great product selections. The whole category increases when the category grows however new products tend to increase more than established products. And at times the established products decline slightly in sales which is what IRI data tells us today.
Symphony IRI Group released supermarket beer category data last Thursday which concentrated on the craft beer department after revealing whole category data. Also A-B discussed this data at their recent convention in which they focused on the fact that the supermarkets that expanded their craft beer section at the expense of the premium beer section declined in overall beer sales while stores that did not move to that strategy did fine.
The assumptions one can make to that fact are that craft beer customers don't usually purchase beer at supermarkets even when they have a greater selection, or there were many out of stock situations in the premium beer section so sales suffered, or the stores did not do the "hot" low priced ads on the premium beer section in an effort to drive profitability with more expensive brands thereby focusing on a lower price reduction of those brands. If they did the latter then that proves that craft beer customers aren't usually shopping at supermarkets and checking ads for the best price of one of their favorite craft beers. So that strategy cost them the premium customer that shops the "hot" ads and fills his shopping cart with other items also.
So, having stores decline in beer sales that have added more craft beer space but cut premium space means that more craft beer selection does not grow the overall beer category, it just grows craft beer sales but not at all places, yikes. Or maybe one needs to dig deeper to find out customer buying habits.
Alright, so I've decided to do a mini study of my own at one independent liquor store that I occasionally shop at on the way to a chain supermarket. The store's craft beer selection takes 4 cooler doors and one warm shelf but the selection is of standard craft brands and very few if ever any higher priced craft beers such as 4 packs and expensive 25.4 bottles. The Belgium beer category is almost non-existent. I have expressed a need for other brands to him before however he says they are too expensive and no one will buy them.
I entered the store yesterday and grabbed a 6 pack of Odell 90 Shilling and then asked him if he would carry four brands so I wouldn't have to make a special trip out of my way to Total Wine and More to buy them; he can even charge me a buck more than they do. I went on that he could attract more customers with more expensive craft beers and he doubted it. I told him I can prove it because if he carried those four brands I would be there more. So, his wife wrote down the brands. I had to change one of them because the brewery rep for that brewery pissed him off with his arrogance...thank you, Mr. Awesome Brewer Rep. He will be ordering them this week and I will be tracking what happens with our data mining software. I'll let you know the results and look at more data that might reveal some interesting buying habits. He might even expand his beer selection to include more extreme beers, wow what a country.