GIVING CRAFT BEER ITS FAIR SHARE

CHICAGO - Food retailers should increase promotional and display activities in the strong-performing micro/craft beer segment, said Dan Wandel, vice president of beverage alcohol client solutions at Information Resources Inc. here."Even though the micros/crafts saw a merchandising increase, they're still not getting the fair share they deserve," Wandel said during a recent beer teleconference sponsored

CHICAGO - Food retailers should increase promotional and display activities in the strong-performing micro/craft beer segment, said Dan Wandel, vice president of beverage alcohol client solutions at Information Resources Inc. here.

"Even though the micros/crafts saw a merchandising increase, they're still not getting the fair share they deserve," Wandel said during a recent beer teleconference sponsored by the Brewers Association, Boulder, Colo., a trade association for craft brewers.

IRI defines micros and crafts as beer that isn't made by a large domestic brewer and/or is a regional brand. Most sell for more than $20 a case.

While retailers support micros/crafts, they focus their merchandising activities - which include displays and temporary price reductions - on other beer segments, including several whose sales are sliding.

For instance, micros/crafts received 20.6 weeks of merchandising for the year that ended Jan. 1, an increase of 0.7 week from 2005. In contrast, malternatives had 25.5 weeks, a rise of 0.2 week.

This came at a time when malternatives garnered $305.5 million in food store dollar sales for the 52 weeks that ended Jan. 29, a 5.9% drop. The micro/craft segment, meanwhile, had one of its best years, with sales up 8.9% to $396.8 million.

"It will be interesting to see if micros/crafts get more [support] this year because they really deserve it based on the numbers we're seeing," Wandel said.

Imported beer is another strong performer, with dollar sales in food stores climbing 6.3% to $1.4 billion for the year that ended Jan. 1. Micros/crafts held a 4.6% dollar share of the beer category in food stores for the 52 weeks that ended Jan. 1, a 0.4% increase. Imports, meanwhile, had a 19.2% share, up 1.1%.

"Both of these high-end segments continue to outpace the beer category in supermarket sales," he said.

While beer remains the nation's top-selling alcoholic beverage, it faces more competition from wine and spirits. Food store dollar sales of beer totaled $7.5 billion last year, essentially flat with the year before. In comparison, dollar sales of wine and spirits grew 9.8% to $4.4 billion and 7.8% to $2 billion, respectively.

Another reason to promote micro/crafts: They produce high basket rings, $71.57, compared to $55.17 for purchases that include any type of beer, according to IRI.

"Retailers should focus on these higher-margin items that contribute to their growth," Wandel said.

As further evidence of the segment's clout, five micro/crafts made IRI's list of Top 30 beer brands for 2005. They are New Belgium Fat Tire Amber Ale (No. 5), Widmer Hefeweizen (14), Samuel Adams Seasonal (19), Sierra Nevada Pale Ale (21) and Shiner Bock (29). Standings are based on a number of factors, including dollar sales, merchandising, pricing and distribution.

"Considering that a lot of these brands are not national, the fact that they made the ranking is a real tribute to them," Wandel said.

Sierra Nevada Pale Ale, Samuel Adams Lager, Samuel Adams Seasonal, Fat Tire Amber Ale and Samuel Adams Light are the Top 5 micro/craft brands based strictly on dollar sales in food and drug stores.

The Top 5 new brands are Full Sail Session Premium Lager, Samuel Adams Black Lager, Goose Island 312 Urban Wheat Ale, Bells Winter White Ale and Saranac India Pale Ale.

Micro Marketing

Micros/crafts are outperforming several other beer segments, but not getting as much merchandising support from food retailers.

Category; Weeks of merchandising '05; Change vs. '04

Beer: 38.3; 0.3

Domestic Premium: 32.2; 0.3

Imports: 29.4; 0.5

Domestic Sub-Premium: 28.6; 1.1

Domestic Super-Premium: 26.7; -0.7

Malternative: 25.5; 0.2

Micro/craft: 20.6; 0.7

Non-alcoholic: 13.9; 0.2

Cider: 2.7; -0.1

Domestic malt liquor: 1.7; 0.0

Source: IRI

Premium Performers

The micro/craft segment is outperforming the total beer category.

Category; Dollar Sales; % Change

Beer: $7.5 bill.; 0.6%

Micro/Craft Segment: $396.8 mill.; 8.9%

Source: IRI, based on food store sales for 52 weeks ending Jan. 29