A New Strategy for Driving Growth in The Alcohol Beverage Category

A time-traveling consumer from just a few decades past would scarcely recognize today’s convenience store beer assortment.

Modern beer coolers include a wide variety of styles and price points, from value-priced, easy-drinking favorites to premium, complex brews that have stretched the category’s boundaries and expanded the role of beer in countless occasions.

Optimizing the potential of this increasingly diverse product mix requires a new approach to category management—one that not only incorporates the trends that are shaping the category today, but also operates with an informed vision of how alcohol beverage consumption will evolve in the future.

That’s where IGNITE comes in. IGNITE is Anheuser-Busch’s comprehensive approach for driving category growth. Powered by deep insights into consumers, shoppers and occasions, IGNITE provides strategies for unlocking the potential of the total alcohol category in convenience.

The IGNITE strategy has four pillars

To IGNITE category growth, convenience retailers must unlock the potential of these four key pillars:

Perfect Your Category Fundamentals /Having the right product recommendations, at the right price, organized in the cooler in a way that guides shoppers, displayed in the right way, with effective merchandising support.

Invite NEW Drinkers (of 21+) Into the Category /Target adults of legal drinking age who are new to purchasing alcohol with approachable, easy-to-drink, flavor-forward products.

Expand Frequency By Winning With More Styles In More Occasions / Build programs and point of sale materials that activate against the key drinking occasions to increase frequency.

Drive Trade Up Within the Category / Drive trade up by featuring the right brands and highlighting the right attributes to encourage people to treat themselves or purchase higher end products for celebratory moments. 

The fundamentals – A strong category shelf starts with getting the fundamentals right

The first step to category success lies within perfecting the fundamentals of assortment, space and displays.  Anheuser-Busch has leveraged cutting edge global insights and ongoing shopper and consumer research to create best-in-class recommendations for impactful execution.

Where do we start?

Take a balanced approach to assortment to maximize both volume AND variety / A balanced approach means maintaining a healthy core and value lager business, which represent over 50% of the category, AND accelerating high-growth segments.

Help consumers navigate the aisle by deploying shopper-based design principles / To encourage shopper exploration AND aid in efficiency, think differently about shelf flow and merchandising: think about designing your shelf in a way that streamlines shopping and increases conversion.

Unlock the potential of in-store marketing and promotional support / Consider taking advantage of the behaviors and exposure that are unique to convenience, and find new ways to increase awareness and help drive basket growth.

BEER AND FLAVORED MALT BEVERAGES LEAD SALES GROWTH

Beer and flavored malt beverages lead sales growth

Beer sales increased about 4.3% year over year in the c-store channel in 2019, reaching nearly $20.1 billion, according to IRI research. Growth was led by strong gains in varieties such as flavored malt beverages (up 34.7%), domestic super premium beer (up 12.4%) and nonalcohol beer (up 30.1%).

Beer is driving the vast majority of growth in alcohol beverage sales compared with wine and spirits as a whole in the c-store channel.

4 unstoppable trends reshaping the beer category

Health and wellness / The demand for options that appeal to consumers with this mindset continues to grow. For beer, that translates to an interest in options that are under 100 calories, no sugar, reduced carbs, organic, and low-or no- alcohol beverages.  Delivering on these key attributes for consumers has propelled the low calorie and organic beer segment to over $1.6 billion in sales and it’s 4th consecutive year of high growth, and 22% of total beer growth.

Flavor / Consumers are demanding more flavor variety across the entire alcohol segment, including beer, wine & spirits. In beer, we are seeing a surge in the Beyond Beer category, especially driven by seltzers and FMBs. Consumers, and particularly new 21+ drinkers, are increasingly interested in new, flavor-forward drinks. As a result, Beyond Beer accounts for 54% of beer sales growth.

Premiumization / Consumers continue to trade up across all alcohol segments.  Trade up in the beer category is driven by consumers’ desire for products with attributes such as high quality ingredients, locally-sourced or purpose driven brands. As consumers strive to present a favorable image of themselves, as well as drink beers they connect with, sales reflect their choices—Core+, Lagers & Craft beers account for 20% of beer sales growth.

Convenience / Convenience has always been a major trend in the alcohol category, especially in c-stores.  While beer continues to lead the way, canned wine and canned cocktails have opened up new drinking occasions with more practical solutions. Consumers are more on-the-go than ever, and the ability to bring along canned wine or cocktails means it’s easy to take the celebration anywhere. As a result, canned wine accounts for 20% of wine sales growth, and canned cocktails accounts for 10% of spirits sales growth.

Insights fuel IGNITE

These insights are at the heart of the IGNITE category growth strategy.

Cutting-edge global and local insights around consumers, shoppers and occasions build the foundation of the strategy recommendations: Stabilize core and value lager, grow the variety in product mix to draw in new 21+ consumers, expand consumption into new drinking occasions, and encourage trade up within the category.

While IGNITE provides a solid framework of recommendations to lead growth in the category, Anheuser-Busch knows it is not a one-size-fits-all solution.  Contact your local Anheuser-Busch Category Management representative today to learn more about IGNITE.

Find out more about driving category shelf growth using the IGNITE strategy.

Source: IRI TUS Convenience L52 Weeks Ending 8/2/20.