COVID-19 has had a dramatic impact on the retail landscape in the United States, transforming shopping in 2020 and likely for years to come. These changes are causing retailers to reconsider their store selection and layout as they seek to stay relevant and adapt to changing shopping behaviors.
While there are likely many possible tweaks retailers could make in the beer aisle, this article seeks to explain why craftsmanship is still an essential part of any beer retailer’s assortment as a profit engine, basket builder and source of entertainment for most retailers.
As always, any review of the assortment must be made against actual profit thresholds, retailer objectives and strategy for the beer segment, and in doing so, it will be clear that the essential role the Arts and crafts. Furthermore, the increased profitability of the handicraft segment means that it requires lower volume thresholds than mass, lower quality and lower price domestic imports in order to meet profit thresholds.
Craft generates dollar sales and increases market share*
- Craft accounts for 14.6% of total beer dollar share (excluding FMB, seltzer water and cider) over the past 52 weeks, corn is 16.8% growth over the past 52 weeks. Craftsmanship takes an increasing part.
- Other segments are losing share. Compared to a year ago, in the last 13 weeks in terms of dollar share:
- Imports lost 74 basis points of share.
- Domestic subprime lost 189 basis points of market share.
- The domestic premium lost 341 basis points a share.
- Independent craftsmanship has had stronger dollar sales growth than the overall beer category (excluding FMB, seltzer water and cider), both over the last 52 weeks and over the COVID-19 period. Independent crafts saw stronger dollar sales growth than overall crafts, with overall high single-digit growth during the shutdown and reopening phases of the pandemic, peaking in double digits.
*Sources: Nielsen and IRI Group.
Many national, regional and local craft brands have experienced double-digit growth during the pandemic, showing that they are considered a priority for beer buyers and their consumption at home. And because of its prices, craftsmanship continues to drive dollar growth for retailers.
Average weekly craft sales per store increased from $451 to $620 (source: IRI Group).
Craft Critical to keep key buyers
Many retailers are likely looking for more space to accommodate the growth of hard seltzers. As noted above, Craft’s dollar sales growth should be a strong argument to protect its space against segments that are losing share, but there are other retailers out there to preserve Craft’s space. .
- Crafts have long been an item that not only attracts shoppers to the store, but also the shoppers you want. Craft drinkers are on average younger, better educated and have higher incomes (Source: Nielsen).
- Retailers see the biggest basket ring when craft is in the basket (compared to other beer categories) and the biggest jump in basket size (Source: Nielsen).
- Surveys show that even during the COVID-19 pandemic, local still matters to buyers. And an assortment of local craft beers is important to attract craft shoppers.
Craftsmanship differentiates and maintains foot traffic
Finally, a wide selection of independent craft beers increases customer engagement, foot traffic and excitement as they seek out innovative local craft brands.
- While other beer categories are also selling well, they are rarely a point of differentiation between your store and your competition. In addition to winning on price (i.e. lower margin), it’s hard to stand out on your lager or seltzer selection.
- Differentiation is more critical than ever as e-commerce gains prominence across all retail channels, including alcoholic beverages. “Non-store retailers” increased by 19.8% in the first 7 months of 2020 compared to 2019, compared to a decline of 2.1% for all retail trade and food services (source: summary Census Retail Trade Monthly).
- Craftsmanship is why people call the store asking if you have “X” in stock. If you don’t, they may consider shopping with an online competitor.
- To compete in the online age, retailers need to increase the reasons why customers come to the store, as well as find a strategy that allows them to compete for customers buying through online platforms. If price is your only differentiator, they now have multiple options to research and find better deals. Selection gives customers a reason to choose your platform.
