A Balancing Act

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A Balancing Act

By Melissa Kress, Convenience Store News - 01/12/2015

Convenience store retailers hold the keys to success in their hand ? one hand, five fingers. Since Anheuser-Busch rolled out its Your Balanced Portfolio Approach (YBPA) in 2014, the beer giant has not only helped retailers narrow down their individual plans of action for the beer category, but also has gained valuable insights ? five key points in particular ? that can apply to convenience store operators across the board.

Citing IRI research, CJ Watson, vice president of small-format sales at Anheuser-Busch, noted that beer is one of the fastest-growing product categories. To capitalize on this growth, he said retailers need to leverage the entire beer portfolio, which is the concept behind YBPA.

Speaking at Anheuser-Busch?s trade media open house Nov. 19?20 at its U.S. headquarters in St. Louis, Watson pointed out that two-thirds of all trips into a convenience store are for beverages. In addition, premium beer is the largest beverage segment for a c-store operator when it comes to revenue mix. However, some retailers are still struggling to win the beer category.

YBPA data has found that all quartiles, from the best-in-class to the bottom, have roughly the same percentage of sales in each beer segment, proving retailers ?can?t just bet on one segment to grow,? Watson said.

Anheuser-Busch also found that the top performers have five key points in common:

  1. Single-serve beers ? Deliver higher margins, offer increased assortment and encourage incremental sales.
  2. Two-fer promotion strategies ? Encourage plus-one purchases, with an industry take rate of 70 percent on the buy-two option.
  3. Three displays at all times ? Best-in-class retailers have, on average, three displays with 100 cases on display.
  4. Four days of supply on hand ? Retailers sell 2.5 days of beer in 15 hours over the weekend (Thursday, Friday and Saturday from 4 p.m. to 9 p.m.).
  5. Five doors allotted for beer ? Top-quartile retailers have 36 percent more beer space. Two out of these five doors are dedicated to premium beer and in total, the five doors carry 110 SKUs.

What?s notable about YBPA and its insights, according to Watson, is that the data does not pinpoint Anheuser-Busch products specifically, but beer overall.

?YBPA helps retailers sell more beer, not more Budweiser,? he explained. ?If the retailers sell more beer, it?s good for Budweiser.?

That doesn?t mean Anheuser-Busch isn?t taking steps to grow its brands. The key is renovation of core brands and innovation, said Pat McGauley, vice president of innovation.

In 2014, the beer giant took a different approach to innovation, with a focus less on new products and more on new packaging for its core brands. ?The best thing we could do for our core brands is elevate their image,? McGauley explained.

Notably, the company rolled out the 25-ounce can (an extra ounce as a reward to consumers), and the aluminum bottle with twist-off cap that can be used to reclose the beer.