Premium Beers Hold Onto Top Spot
Microbrews/craft beers cannot be ignored as the segment posts an 11.4-percent increase
Premium beer is still the malt beverage of choice, and convenience stores still the purchase point of choice, for consumers. And while premium beer holds a significant lead, smaller segments such as flavored malt beverages and microbrews/craft beer are posting some noticeable gains.
Last year saw a dip in sales per store for premium beer, which fell 4.1 percent to $66,621. But even with a nearly $3,000 drop-off, this segment of malt beverages continued to rule the roost. The nearest competitor, budget beer, notched $15,814 in sales per store last year. Popular beer ($13,908) and imports ($12,343) followed, to keep the top four the same as in 2009.
The remaining five segments combined to capture $15,235 in sales per store for the category, similar to the year before. However, flavored malt beverages and microbrews/craft beer did ring up more sales in 2010. Flavored malt beverages saw a 14-percent increase to $5,181 in sales per store; microbrews/craft beer saw an 11.4-percent increase to $2,346 in sales per store.
The increase in the microbrews/ craft segment should not be that surprising. A report issued by Mintel at the end of December 2010 noted that craft beer's popularity was beginning to balloon, with 33 percent of all beer drinkers aged 21 and over drinking domestic craft beer. Specifically, craft beer is a fan favorite among the 25- to 34-year-old crowd. And the segment may continue to grow as 51 percent of consumers said they would like to try microbrews and craft beers if they knew more about them.
Regardless of premium, domestic, craft or imported, at least one beer brewer was not ready to cede any ground in 2010. Anheuser-Busch InBev's Chief Executive Carlos Brito spoke about the company's efforts to breathe new life into Budweiser and Bud Light. He acknowledged that, with the growing popularity of craft beer, the company could do a better job in that segment.
Like sales per store, 2010 saw the percentage of sales stay relatively steady. Premium captured 53.8 percent of the sales, down 1.3 points from 2009, while budget (12.8 percent), popular (11.2 percent) and imports (9.9 percent) rounded out the top subcategories.
Focusing in on the 75.1 percent of convenience stores that sell beer, as compared to the total industry average, the category made up 13.2 percent of in-store sales for these operators, which was pretty stable compared to the 13.3 percent registered the year before. As for dollar amounts, beer rang up $165,008 in average sales per store, giving the category 9 percent of in-store gross margin.
Those figures could change since this past November's election lifted the ban on alcohol sales in some Texas towns — Dallas, University Park and Lancaster, to name a few. As result, Dallas-based 7-Eleven said it planned to apply for permits to sell beer and wine in its existing Dallas-area stores. The Texas Alcoholic Beverage Commission estimated it would receive a total of 2,000 retail and restaurant applications. Furthermore, QuikTrip Corp. said it was going to move forward with plans to build new stores within the previous “dry” zone.
That's a good sign for consumers who still prefer to buy beer at convenience stores. The c-store channel captured 59.84 percent of dollar sales, followed by supermarkets at 35.51 percent and drugstores at 4.65 percent.
What remains to be seen is the impact the alcoholic energy drink controversy will have on the malt beverages category this year. In fall 2010, the beverages came under fire when the Food and Drug Administration alerted the manufacturers of seven caffeinated alcoholic beverages that the drinks were a “public concern” and they would not be allowed to remain on store shelves in their current form. The agency gave the manufacturers 15 days from its Nov. 16 decision to reformulate their products or face possible seizure under federal law. The FDA closed in on the drinks just as several states and convenience store chains were banning the beverages.