Beer playing field evens up in supermarkets

By Helen Vause

One wag in the liquor industry reports some very anxious liquor retailers were hoping on Monday that Helen Clark might decide supermarkets wouldn't be allowed to sell beer after all ...

But the day came and the supermarkets unveiled a wide range of beers at prices that had been anticipated by the beer marketers.

"Responsible and not too aggressive at this stage," was one reaction from within this competitive industry in the first hours of the new supermarket beer category - a category with very low margins and the value already largely driven out of it.

In a marketplace already crowded with boutique beers, the range supermarkets will offer initially suprised the industry. The supermarket operators see the broad offering (at this stage at least) as part of their strategy of establishing this new, high-traffic, retail channel.

Foodtown, for example, offers brands that many consumers will have never heard of, nor tasted before. There are also smaller pack sizes. Category manager Bryan Pearce says the supermarket had worked to gain a variety of boutique brands on a short-term, exclusive basis. They're selling Raffles Lager and Bavaria and from the old English brewery, Neams, they have acquired brands that include Bishops Finger, Porter and Spitfire Bitter.

It is not necessarily expected that these brands will suddenly enjoy serious volume, but that they will add interest to the category.

In the short term, at least, it means carrying a huge range of stock to tantalise consumers into trying and buying. With a shelf life of just six months, any or all of these more obscure brands will have to perform in order to avoid going the way of all strugglers in fiercely competitive categories - vanishing off the shelves.

For the smaller beer brands, getting on to the supermarket shelves for however long brings a tremendous new opportunity. They are expecting unprecedented exposure in both existing target markets and in new markets because of the sheer diversity of supermarket traffic.

Along with heavy print advertising, instore promotion and tastings are on the supermarket agendas over the summer. At Carlton United, field marketing manager Keith Edwards sees a big opportunity for his brands to compete in supermarkets alongside the mega brands with their big marketing budgets.

"It is a more even playing field now from our point of view. We have secured great distribution with the supermarkets. As a small player we had been locked out of 40 per cent of the retail outlets because they were owned by competitors. Now it will be the consumers who decide the brands they want."

Though it is widely accepted that beer is mostly consumed by blokes, the supermarket is a new retail channel for beer - one where women are by far the majority of the "household shoppers" who go there.

The supermarkets have already done some thinking about this and Foodtown's Bryan Pearce says their surveys show that whatever beer brands women may be attracted to on the shelves, they also know what brands their husbands want. Retail research shows that women traditionally control the household or supermarket budgets and men make the liquor purchases.

In the early days of tuning their strategies, supermarket operators are wondering which part of a family budget beer purchases in supermarkets will come from and whether this will impact on spending in other categories.

Says Des Flynn at Woolworths: "We are expecting this to drive some cultural changes. When wine was first introduced to supermarkets it was a product that had traditionally been selected and bought by men. In supermarket wine selling that power base shifted to women.

"We are expecting that shift from men doing the buying to women buying, to be repeated with beer. Another factor in the pattern will be the influence of the increasing social acceptability of beer drinking among women. If women start buying the beer will their overall spend increase at the supermarket or will they somehow adjust the rest of the shopping list?"

Today wine rates close behind bread as the largest supermarket category and it is expected that beer will at least match that performance in this new retail environment.

Whether men (still really the target market), particularly impatient young males, will enter supermarkets in increasing numbers to buy beer, remains to be seen. More men do go to supermarkets, but the consensus is many will not brave the trolleys and queues and that the Kiwi bloke will still think twice about crossing the threshold.

While beer in supermarkets is expected to put many of the 14,000 existing liquor retail outlets out of business, the full impact is not expected to be seen until after this summer, during which beer consumption is likely to be high. Liquor industry veterans do not speak highly of the retailing skills of many of these operators, but predict the ones furthest from the big cities and the new competition are the most likely to survive.

Liquor King's Craig Wilson says his 39 stores will be focusing their marketing on convenience and specialisation to keep their position in liquor sales. He says that smaller pack sizes and smaller volumes are likely to go through supermarkets for logistical reasons at least.

"Big volume purchases of all liquor requirements can't be made through supermarkets because you can't get them into trolleys or scan the products efficiently."

Whispers of house brands in supermarkets suggest someone is already preparing to bottle beer for one of the big operators to market under its own label.

At Foodtown Bryan Pearce laughs at the suggestion: "Who is going to buy Foodtown Lager? Beer is very much a brand-driven product and for that reason the UK supermarkets failed when they went into house brands of beer."