LET S JOURNEY TOGETHER A Drinker Centric View Of Craft Beer
We listened and learned about crafts from your customers from drinkers Drinkers don t see products and segments the way retailers and manufacturers do Unmet expectations across the retail landscape INTERVIEWS CONDUCTED IN: BOSTON Quan'ta've: Cra$ Beer A5ribute and Usage Study Qualita've: Cra$ & Import Adop.on Study
Common Theme The Beer Journey A fun JOURNEY OF DISCOVERY and palate development BEER FLAVOR EXPLORATION Quan'ta've: Cra$ Beer A5ribute and Usage Study Qualita've: Cra$ & Import Adop.on Study
INVITATION BREWS EXPLORATION BREWS EXPERIMENTATION BREWS Drinker s journey stories described a palate evolution into different craft beer groupings
For most, the journey begins with premium light beer Drinkers are more likely to have arrived in crafts by way of light beer with INVITATION crafts as the beachhead Q: WHAT WERE YOU DRINKING BEFORE CRAFT BEER? Quan'ta've: Cra$ Beer A5ribute and Usage Study Qualita've: Cra$ & Import Adop.on Study
Invitation Crafts: The beachhead with broad drinker appeal ACCESSIBLE brews a safe entry point RECOGNIZABLE in name and TRUSTED for relative value At the leading edge are TRADE IN -INVITATION products If I m trying to get you into better beer, Blue Moon is a fine place to start, it s inoffensive, but it s got some interesting characteristics. Boston: Extreme Craft Drinker Quan'ta've: Cra$ Beer A5ribute and Usage Study Qualita've: Cra$ & Import Adop.on Study 6
Exploration Crafts: Where brewers have exploded assortment EXPLORATION brews offer beer drinkers more diverse, intense, or complex flavor profiles. It s about the BEER and SAVORING it. It s like Sushi. All I would eat in the beginning was a California Roll. Then I got turned on to Unagi [Eel], then Sea Urchin. Once you go there you ll try anything. - Denver Exploration Craft Drinker I ve migrated from Rolling Rock to having special Avery beer in my fridge... I don t know all the terminology and I don t brew it, but I think I do have the palate. - Denver Exploration Craft Drinker Quan'ta've: Cra$ Beer A5ribute and Usage Study Qualita've: Cra$ & Import Adop.on Study
Experimentation: Niche products with targeted appeal ADVANCED BEER ENTHUSIASTS looking to push the boundaries of their sensory experience Brews with a very robust, intense, or unique flavor profile I am looking for variety, increased flavor, experimental beer and flavors. - Boston Extreme Craft Drinker Its about live beer. Boston Extreme Craft Drinker End Of History 700 BriFsh Pounds a bo<le Sink The Bismarck 41% Alcohol and $63 a bo<le Qualita've: Cra$ & Import Adop.on Study
Sorting is easy with clear bookends, Invitation ß à Experimentation BREWER NOTES and BEER SCIENCE supported drinker segmentation differences with true to style examples Henry s Weinhard IPA Style- American IPA Brewed by: Blitz- Weinhard Brewing Co. Oregon, United States 6.00% ABV 42 IBU s SRM 11 Dogfish Head 90 min IPA Style- American Double IPA Brewed by: Dogfish Head CraR Brewery Delaware, United States 9.00% ABV 90 IBU s SRM 14
Craft beer brands fall into drinker segmentation INVITATION TRADE- IN INVITATION EXPLORATION EXPERIMENTATION A handful of brands, such as A few larger brands, such as Thousands of brands, such as Hundreds of very small brands, such as Killian s brands Henry Weinhard s Brands Third ShiR Shock Top Family Shiner Family Blue Moon Belgian White/Seasonals Sam Adams BL/ Seasonals Fat Tire Amber Ale/ Seasonals Leinenkugel s Flagship/Seasonals Batch 19 Goose Island 312/ Honkers Dogfish Head 60 Minute IPA Deschutes Black Bu^e Porter Bell s Two Hearted Ale Rogue Dead Guy Ale New Belgium Ranger Allagash Dubbel Goose Island Sofie Great Divide Hades Bear Republic Racer 5 Dogfish Head 90 Minute IPA Blue Moon Vintage Series Big Eddy Series Stone Double Bastard Ale Sierra Nevada Big Foot Sam Adams Utopias Avery the Czar Bell s Hopslam Ale Ommegang Three Philosophers
Craft doesn t match trip-type or space challenge The craft explosion is basically a liquor store & grocery phenomenon crafts account for 78% of new Beer SKU s in grocery 1368 Total # SKU s in Channel 540 480 282 204 Liquor Grocery Super Centers C-Store Drug Avg # Craft SKU s 272 68 25 6 6 Nielsen 52 Weeks-ending 3/23/13
C-stores are not the craft destination $892.3 30% Premium Lights C-Store Beer GM$ By Segment Millions $723.8 25% Economy $432.4 15% $307.0 10% $224.0 8% Imports Premium Regular FMB/AAB $175.1 6% Super Prem $111.6 4% Malt Liq $83.4 3% Crafts $594.0 20% Balanced Focus Source: Margins from Willard Bishop C-store SuperStudy Nielsen Sales- total US C-Store
Understanding journey flow provides assortment clarity Trade In 19% CraZs - Share of Dollars Convenience 64% ExperimentaFon 2% ExploraFon 34% InvitaFon 45% Avg # # Unique Dollars Per Items Selling Items Unique Item InvitaFon 3.3 128 $1,631,081 Trade- In 1.4 74 $1,158,745 ExploraFon 1.8 1,891 $82,037 ExperimentaFon 0.1 204 $38,224 Source: Nielsen C- Stores; 52 weeks ending 3/23/2013
We also learned some other interesting facts
Drinker Surprise #1: Who Drinks More Crafts: Millennials Or Older Males? It takes time to a develop DISCERNING PALATE and this is reflected in volume by age breaks and incomes that SKEW TO OLDER established drinkers Age Volume By Age Group Invitation Exploration Experimentation 21-34 25% 22% 22% 35-54 47% 45% 58% 55-65+ 27% 33% 20% % Vol 75% 78% 78% Spectra Review of CraR Consumer Demographics
Drinker Surprise #2 : How much other beer do craft drinkers drink? ONLY 2 out of 10 beers is a CRAFT BEER Craft drinkers like all kinds of beers occasion informs choice 78% Different Occasions Different Beer Choices 22% Other AP 22% CraR- Micro Brew 23% Economy 32% Premium Other Brew
Drinker Surprise #3: Craft drinkers take their time CRAFT 6 PACK = 19.5 DAYS Days To Drink 6 Pack Below Premium 1.75 Premium Light 3.75 Import (Low Priced) 12 Import (High Priced) 15.5 CraZs 19.5 Source: BTS Tracker And Nielsen Expandable Consumption Study 2012
Key Takeaways 1. Don t overdo craft Be smart with the right items Targeted stores, targeted occasions Add cold space to add shoppers 2. Focus on Invitation items Most productive Craft items Top 10 Craft items = >41% of Craft $ s 3. Keep it interesting Seasonal rotation National sellers and local favorites Knowledge and Education