brewing a beer strategy

Variety and pricing are the keys to building the beer business, according to a Convenience Store Decisions survey of regional marketers.

“We’re seeing strong sales in imports, as well as the flavored alcoholic beverages,” said Doreen Lewis, category manager of beer and wine for Portsmouth, N.H.-based Irving Oil Corp., which operates 300 Mainway and Blue Canoe stores in New England and Canada.

Irving’s top-selling beers include Budweiser Bud Light and Coors Light, Lewis said, noting that the trend in her markets seems to be moving toward full-caloried beers. The chain carries more than a dozen beer brands in all package varieties.

“Customers are also trading up overall,” said Tim Cote, vice president of marketing for Beaverton, Ore.-based Plaid Pantries Inc., which operates 103 stores in Washington and Oregon. “Cheap beers and expensive beers are doing well. Ten years ago, I could never picture carrying 12-packs of microbrews.”

While many trends impact the beer category,-the one that will most directly influence how marketers do business is the continued demand for more choices by the consumer, said Joe Vonder Haar, vice president of the convenience store channel at St. Louis-based Anheuser-Busch, the world’s biggest brewer.

“Demand for choices in packaging and product differentiation will continue to impact how we go to market and what types of products we offer,” Vonder Haar said. “Today’s contemporary adult consumers 21 and over crave variety; different drinks at different times of the night and in different settings.

“This is an important opportunity for beer innovation, and that’s why you see us bringing out new products like B2E, Tilt, Bacardi Silver Big Apple and Peels. It’s also why we provide innovative packaging like the aluminum bottle and new shrink wrap designs.”

Anheuser-Busch constantly works to address the changing marketplace with new products and marketing approaches that will serve this new consumer mindset.

“For example, we recently launched Michelob ULTRAAmber, a beautifully rich, deep amber-toned lager with a toasted, malty taste that is also low in calories and carbohydrates,” Vonder Haar said. “It’s ideal for adults who prefer a full-flavored light beer. We also have noted an increase in high-end brand growth in the convenience channel.”

While new product offerings create excitement and the potential for incremental sales, it is also critical to focus on the products that represent the core of the convenience store business — premium beers. According to IRI data, the premium category accounts for nearly 60% of all beer sales in convenience stores.

“We must ensure that loyal convenience customers have access to the brands they expect to find — in stock and cold,” Vonder Haar said. “This underscores the growing importance of shelf management and Anheuser-Busch is continuing to invest in the manpower and technology to provide quality recommendations to retailers in these efforts.”

Customers are also responding to storelevel discounts in the Southeast, said Billy McNamara, general manager of 29 Signature convenience stores for Austin, Texas-based Triple S Petroleum. “When we run good pricing, our sales jump,” he said.

Terry Manke, vice president of marketing for JFM Inc. in Jackson, Miss., agreed. “The biggest change in the category that we’ve noticed is that the best promotions are strictly centered on price,” said Manke, whose company operates 32 Junior Food Stores.

In the Midwest, Speedway SuperAmerica, operator of 1,670 stores in nine states, found that cross promoting the beer offering and couponing were two innovative strategies that helped create new revenue streams.

“We had a fuel and ice program that Anheuser-Busch put together in July, where customers received a coupon for either $3 off fuel or $3 off ice with their beer purchase,” said Tim Young, Speedway’s associate category manager for beer and wine. “We did that for more than two months and had a great response. We probably had a 6% lift for those packages on the coupon.”

Anheuser-Busch said it is responding to retailers’ needs for a diverse beer offering by providing the right product mix, packaging and merchandising options that will appeal to the convenience customers.

“The convenience channel is our largest retail segment and the company dedicates significant resources to help develop quality recommendations for the convenience retailer,” Vonder Haar said. “Our experts in convenience store selling and merchandising also work to develop creative promotions to increase sales and encourage store traffic.”