PROPOSING A TOAST has taken on a whole new meaning as beer and wine manufacturers cultivate health and wellness, and add green messages to their marketing efforts.
“We have definitely been getting more questions lately about organic and gluten-free beers,” said Dan Piron, grocery/frozen/dairy manager for Green Hills in Syracuse, N.Y. “We now carry eight organic brands and two gluten-free brands.”
Green Hills is not alone in seeing consumer preferences change. The Nielsen Co. reports that sales of organic beer at food stores for the 52 weeks that ended March 22 skyrocketed 83% to $6.3 million. Gluten-free beer sales rose 54% to $69,162. Total beer sales at food stores grew 4.9% to $8.1 billion.
Looking beyond the food trade, retail beer sales at food, drug, liquor and convenience stores rose 3.4% to $27 billion. Within that, craft beers jumped 23% to over $1.2 billion.
At Green Hills, organic and gluten-free items are merchandised in a separate section within its craft beer presentation, which has been significantly expanded over the past year. A whopping 12 additional feet of space has been handed over to craft beers, at the expense of core domestic brands, said Piron. The craft beers sit in the department's walk-around cooler, which measures approximately 20 by 15 feet.
Along with the introduction of organic and gluten-free beers, brewers have been unveiling more varieties with fruit and other healthful ingredients, such as ginseng and pomegranate. Calories and carbs continue to be a focus as well. Anheuser-Busch is offering Wild Blue, a beer with the antioxidant powerhouse blueberry. Miller Brewing Co. introduced MGD 64, a reformulated version of MGD Light, starting in Midwest markets last month. The new brew, with 64 calories, claims to be the lowest-calorie beer now on the market.
“I think these trends in the non-alcohol categories are spilling over and merging into the alcohol categories,” observed Gary Hemphill, managing director of Beverage Marketing Corp., a New York consulting firm. “Certainly, we have seen there is a market for organic beverages in juice sales. We also see vitamin-enhanced mineral waters.”
Hemphill said future expansion depends on consumer response.
“If the existing products on the market prove successful and grow, we will obviously see more come to market. On the alcohol side, it is more of a niche opportunity,” he said.
For the most part, people are not consuming alcohol for health and wellness reasons, so manufacturers have devised strategies to bring better-for-you elements to their products. There are successes in some segments — light beer would be a prime example, Hemphill said. The numbers bear him out. Nielsen data shows light beer now outsells regular beer.
Organic wine sales have been progressing nicely, too. Nielsen data shows that sales of organic wine at food stores are small, but strong, rising 80% to $15.9 million for the 52 weeks that ended March 22. Total wine category sales in food stores climbed 7% to $5.2 billion.
“We carry a fair amount of organic wines, and they do extremely well,” said David Schmerr, wine director at Jungle Jim's International Market in Fairfield, Ohio. The giant destination store houses a liquor department measuring 35,000 square feet; 18 linear feet are devoted to organic wines.
“Sales have been increasing, although small compared to our total wine sales. We might sell $2,500 worth of organic a month,” said Schmerr. “But it is important. It adds to the Jungle Jim theme, because we have lots of organic produce and health food.”
In a new study on the alcoholic beverage market, Nielsen suggests that retailers selling alcohol increase their share of the wine and beer market by focusing on higher-end, specialty items in the health niche. The alcoholic beverage category in general is growing at a faster rate than all other categories — 5.3% vs. 3.5%. A wine department in particular draws a more affluent shopper and enhances the store's image.
Because the segment is still developing, retailers are finding that keeping organic and specialty wines together is the way to go.
At a Wegmans Food Markets store in Bridgewater, N.J., an organic wine section was presented in the center of the store. A special green wooden sign hung over the display, which included two shelves of wines above a barrel-type floor rack that held another nine different bottles. In all, at least 11 brands were offered.
Stew Leonard's Wine Store in Danbury, Conn., is also offering a small selection of organic wines that are also stocked together.
“We're looking to expand it. We have been getting more requests for that kind of lineup,” said a store clerk.
A spokeswoman for The Fresh Market, based in Greensboro, N.C., said the chain now carries Domaine Jean Bousquet, imported from Argentina, and Bonterra, a California label. Additionally, in its North Carolina stores, it offers Our Daily Red, also from California.
Meanwhile, Henry's Farmers Market, a 28-store chain based in San Diego, has taken up the cause of organic and biodynamic wines, posting on its website 10 reasons explaining why. They include protecting consumers from ingesting pesticides, protecting the health of farm workers, protecting water sources and cultivating a better-tasting product.
Wine aficionado Deborah Gavito, owner of the Counter Organic Wine and Martini bar and restaurant in New York, said her sales have risen 30% to 35% over the past year as consumer interest in organics grows.
“It is a huge trend. We started five years ago with 50 wines,” she said. “We now carry 280.”
While manufacturers develop more healthful products, researchers and other industry experts continue to build a body of evidence showing that moderate consumption of wine and beer can be beneficial.
Last year, the National Beer Wholesalers Association of Alexandria, Va., delivered a healthful lifestyle message to some 8,000 physician assistants about the benefits of a moderate consumption of beer.
“Physician assistants are on the front lines in the medical community,” said NBWA Vice President of Public Affairs Rebecca Spicer, in a statement after the event. “They report that patients are hungry for quality information about the link between moderate alcohol consumption and health, especially when it comes to cardiovascular health.”
Moderate consumption is considered one 12-ounce beer per day for a woman and two beers for a man.
More products are striving to carry a message of sustainability as well. At the annual Craft Brewers conference in San Diego in April, for the first time there was an entire educational track devoted to environmental sustainability topics. Julia Herz, craft beer program director for the Brewers Association in Boulder, Colo., said that efforts abound with brewers implementing biofuel methods and CO2 recovery programs. “Recycling is also big,” she said.
Wine, of course, has ridden a long wave of positive publicity. It was in 1991 that “60 Minutes” ran its now famous “French Paradox” story on the heart-health benefits of red wine. The flavonoids in red vintages are thought to work like anti-oxidants. Studies have also found the compounds resveratrol and quercetin to help boost the immune system.
Whether it is for pure pleasure or the added health benefit, “there has definitely been an increased interest and sales of organic wines,” said Steven Frenkel, owner of Organic Vintages of Ukiah, Calif., a distributor that supplies retail stores in the New York, New Jersey and Connecticut markets, “although it is not as significant yet as organic foods like produce.” Still, his sales have been growing at the rate of 15% a year.
- While the market is still developing, integrate organic options so they're easier for customers to find.
- If allowed by law, host small educational sessions or tastings to promote special varieties of beer and wine.
- Look outside the liquor department for inspiration on cross-merchandising ideas, pairing organic beer and wine with appropriate organic grocery items.
- Premiums are higher on these special products. Gauge customer interest in promoting an upsell.