Here’s a back-to-basics program for improving sales of beer
BY MICHAEL SHERER
Beer is still big business. Just ask any of the 20,000-plus people who attended the Great American Beer Fest in Denver last October, or the brewers who submitted more than 2,000 entries for judging. Beer accounts for more than 50% of beverage alcohol sales in all but six of 50 states. In some states 75% of all beverage alcohol sold is in the form of beer.
U.S. consumers may not be the biggest beer-guzzlers on earth — Czechoslovakia consumes more beer per capita than any other country — but we constitute one of the largest beer markets in the world. The sheer number of beer brands available here is almost overwhelming. Beer is never boring and that’s good news to beer drinkers and means plenty of opportunities for you.
Boosting beer sales is a matter of constantly tweaking your merchandising techniques to find out what works best in your market. Here are a dozen principles to help you get the most bang per barrel.
It may sound simplistic, but offering what your customers want is a good way to increase your sales. It also doesn’t hurt to have products that your competitors don’t. If the guy down the street does high volume by offering bargain basement prices on domestic brews, offer a selection of imports or craft beers that customers can’t get elsewhere. If a competitor offers 200 brands, sell 250 in your store, or 100 brands that your competitor doesn’t stock.
“Our selection is second to none in the marketplace,” said Ron Junge, president of the 18-store Brown Derby chain, Springfield, MO, “so it’s a big reason for people to come in.”
“One of the reasons for our success is our product mix,” agreed Doug Alberhasky, the beer guy at John’s Grocery, Iowa City, IA. “We now have 650 items and about 2,000 SKUs.”
Selection is not always about having the most, though. It’s about giving customers what they want.
“We’ve become a lot more focused on our individual markets since Chicago is so ethnic,” said Brett Pontoni, buyer at Binney’s Beverage Depot, Skokie, IL. “We’ve been working more closely with importer Stan Stawski, for example, in our Polish neighborhood stores.”
New products give customers a reason to keep coming back in the store. While they may have a favorite brand, most customers like to try something new once in a while.
“People are really thirsty for new and different products,” said Alberhasky, “and constantly bringing in new things keeps people interested.”
Seasonal beers are one way to continually refresh your selection and add new offerings without changing your core inventory. Another way may be to rotate beers regularly from different countries, and do the same with beer styles. Consistently good sellers can be added to permanent inventory.
Find ways to let your customers know when new products come in. At Bottle King stores in New Jersey, “new items go to the front of the store,” according to Larry LaScola.
At Liquor Mart in Boulder, CO, beer manager Derrick Ridge invites brewery reps to come in and talk to customers about a new product.
Where you put a beer — in the store or even on the shelf — will affect how fast it moves. It’s all about calling attention to the product. Work with your wholesalers to find out where the prime sections of real estate are in your stores. Then learn how to place product on those parcels so they’ll sell.
* Shelf sets. Generally, product placed at eye level will sell fastest, so gear your strategy with that in mind. Some like to reserve that space for high-margin products. Popular, high-volume products, the thinking goes, will move no matter where you put them. It’s also a general rule of thumb to put single bottles on top shelves, 6-packs at eye level, and 12-packs and cases down near the floor.
Arrange your shelves in such a way that customers can navigate the aisles easily to find what they want. Some like to arrange sections by country and by brand within each section. Others like to arrange shelves by style. Just make it logical for customers.
Don’t forget to devote a fair amount of cooler space to 6-packs, 12-packs and single bottles. Set the shelves in the same arrangement you use in the aisles, but set both warm and cold shelves based on what people are actually buying. If you don’t have store data readily available, wholesalers can at least give you a breakdown in your market.
* Displays. Setting an item apart in a display attracts attention. Floor stacks, end-caps and theme displays all tell your customers that there’s something special about an item.
When considering displays, never forget the time- tested adage — “Location, location, location.” As an example, LaScola noted, “If we want to move more of an item, we take it away from the beer area and bring it up to the front.”
Next, think of an idea that will capture the imagination. “We’re doing a lot more thematic displays, a lot of seasonal stuff like Octoberfest and Christmas beer displays,” said Pontoni.
Finally, generate excitement with displays to give customers more reasons to stop and buy. “We recently put up a Miller motorcycle display,” said Gary Fisch, owner of Gary’s Wine & Marketplace, Madison, N.J. “A display like that is very exciting.”
Even with great selection, good shelf space and a display, it helps to tell your customers what you have and what’s being featured. Signs point the way to the products you want customers to buy.
* Marquees. “I think our marquees make more of an impact for us than almost anything else,” Junge said. With 18 of the eight-by-twelve-foot signs in the community, people are bound to see one. Each features two beers, one spirit and one wine special each week.
* Banners. Sometimes, saying it with a banner is even better than saying it with flowers. This year, when Gary’s Wine & Marketplace offered a special on Jersey Gold beer, the store put up a banner that said, “Brewed in Jersey for New Jersians.” The store sold three times the beer it did the last time it ran the special. “The banner brought it to people’s attention,” Fisch said. “It focused on a local angle.”
* Signs. Many stores create their own signs to give beer displays more uniformity and their own unique look. “We don’t use P-O-S materials from suppliers,” LaScola said. “We like to use our own to draw attention to an item.”
* Shelf talkers. Signs not only attract attention, but also impart information. Small signs right on the shelf can tell customers more about the products, the promotion, the packaging or anything else you want.
“We like to use shelf talkers for newer products,” said Mike O’Connor, owner of Kilroy’s, Atlanta, “so customers can get familiar with them.”
* Price stickers. Even price stickers are a form of signage that can draw attention to beer. Brown Derby stores now use price stickers printed in the brewer’s logotype, occasionally with the brewery logo. The technique personalizes each brand, and is especially eye-catching for lesser-known brands.
Ads create awareness of your stores and the products you sell in the surrounding community, reaching people who might not otherwise think of your stores unless they see one. Most retailers use print as their primary advertising medium, but radio and even cable television can be affordable options in some areas.
“If we have something we know will sell, we put it in our ad so people will know about it,” said Ridge of Liquor Mart.
Promotions give customers an incentive to try and buy products. In many cases, a promotion is as simple as offering a special price on a featured item. But you don’t always have to lower your prices to motivate customers to buy. Brewers and distributors often run promotions or have incentives available that you can use to reward customers for purchasing products.
“If we have knick-knacks to raffle off, it really helps us raise awareness for products and move them,” said Jeff Balcerzak, manager, Schaefer’s, Skokie, IL. “Last summer, for example, Grolsch offered a cooler on wheels with a built-in radio. That helped us sell a lot of Grolsch.”
“We’ve had huge success combining mail-in rebates with a promotional giveaway,” Fisch said. “We put up a sign announcing an $8 per case rebate on Hacker-Pschorr and sold 50 cases in a week.”
“We like to have a lot of giveaways hanging over our displays,” said Ridge. “Things like bikes and NFL stuff from Coors do really well.”
Your customers are busy people, too. Sometimes they don’t see your ads, and they don’t have time to stop in the store to find out what promotions you’re running. Communicate with them directly.
* Newsletters. A newsletter reminds your regular customers of what’s going on in the store, from promotions to featured items to tastings. Some retailers send a printed newsletter out monthly or even weekly.
A less expensive and easier way to communicate is through e-mail. Schaefer’s sends a weekly e-mail newsletter to about 500 customers to announce events and specials. Customers opt in for the e-mail so the store doesn’t spam anyone.
* Brochures. Schaefer’s also prints a 32-page, color brochure five times a year and direct mails it to 8,000 customers. The brochure features products store-wide, not just beer.
* Web sites. More and more retailers have put up virtual stores on the Internet, giving customers a chance to browse inventory, read up on individual products and find out about promotions and events.
“We do a weekly beer blow-out list in conjunction with our Web site that people can subscribe to,” Alberhasky said. “The list goes out on Friday, and customers can call in to reserve cases of beer on the list. It gives customers a heads-up before the weekend and makes people feel like they know the secret handshake.”
The old retail saw, “An educated consumer is the best customer,” says it best. There are lots of ways to inform and educate customers that also give you more opportunities to get them into your stores.
* Seminars. Binney’s Beverage Depot and its other stores (Ivanhoe’s, Gold Standard and Cheese Chalet) work with distributors like B. United to stage beer and food seminars. The seminars are held quarterly for about 50 people. The stores charge $20 per person to weed out those who are just looking for free samples. Brewery reps come in to talk about six to ten beers and sample them with cheeses and other foods.
“We’re treating beer much more like wine,” said Pontoni. “Beers run the gamut, so we do things like pair wit beer with soft cheeses or a Scandinavian porter with hard cheeses.”
* Events. Lots of retailers like John’s Grocery, Brown Derby or Haskell’s in Minneapolis have discovered the benefits of hosting their own beer festivals. Usually designed to benefit a charity, the festivals give customers a chance to sample a wide variety of beers and beer styles, ask questions and learn a lot about beer.
The beer festival at John’s Grocery features more than 150 beers from 86 brewers. The store charges customers $20 per ticket, which entitles them to a 6-ounce keepsake Pilsner glass, five drink tickets and program notes. Proceeds all go to charity. This past fall’s Octoberfest-themed event attracted about 2,000 people.
* Tours. Brewery tours put customers right into the action, giving them a first-hand look at how beers are made. Because there are so many craft and microbrewers around now, you probably don’t have to look too far to find one near you.
* Beer dinners. In states where tastings aren’t legal, retailers host beer dinners in a nearby restaurant. Chefs often are eager to work with brewers to show off the kinds of food they can pair with beers. And brewers are usually more than happy to come out and talk about their products with interested customers.
Where it is legal, sampling can be one of the most effective ways to sell products.
“Tasting is the number-one tool in any state that allows it,” asserted Dan Manning, president, Haskell’s. “We have brewery reps come through to talk about their beers and offer 1-ounce servings. Brewers arm themselves with bottle openers, coasters, key chains, anything which puts the brewery name in front of the customer.”
“Sampling beers first gives customers a chance to try them,” agreed Brian Frank, store manager at Happy Harry’s Bottle Shops, Fargo, N.D. Happy Harry’s does weekend sampling of its beer-of-the-month in 1-ounce servings. The chain also hosts an annual beer tasting of about 100 brews, sending out direct mail and e-mail to more than 2,000 people.
Schaefer’s does weekly beer tastings with food and also does special seasonal tastings, sampling half a dozen Octoberfest beers in the fall or maibocks in the spring, for example.
Liquor Barn gives customers an alternative way to sample products by occasionally offering a “seven-pack.” The technique works especially well when promoting a seasonal beer. The store offers a free bottle of a brewery’s seasonal beer with the purchase of a six-pack of the regular brand. Often, brewery reps come in to help hand-sell the product.
Putting beer in unexpected places or with other products often spurs customers to buy products they might not have thought of trying.
This past summer, Haskell’s displayed Italian beers with Italian wines in end-cap displays with pretty good success.
When Binney’s Beverage Depot recently hosted a champagne tasting, it also featured several Belgian lambic ales along with 120 sparkling wines.
Schaefer’s regularly displays beer in its food cases, pairing featured beers with certain cheeses, meats or deli dishes. Bottle King also sometimes cross-merchandises beer with food during promotions like summer barbecues or the Super Bowl.
Happy Harry’s often merchandises beer in its glassware section to show the glass in which a featured beer should be served.
Your store employees, from salespeople to cashiers, are your front line offense. The kind of service they provide will not only establish what kind of experience customers can expect, but also influence the products they buy.
“The most effective merchandising we do is staff training,” said Alberhasky. “Every week we have staff sampling. We open three to five beers and discuss their history and background to let them know about the beer they’re telling customers about.”
Happy Harry’s also cites staff training as integral to beer sales. Training sessions are held about every three weeks, with beers covered once every couple of months. Once a year, the chain hosts “Beer 101” training for new employees.
“It’s all about giving customers the attention they deserve and require,” Alberhasky said. “If they don’t know what they want, we take the time to explain different styles and find out what they like.”
Finally, pricing products fairly — or aggressively if warranted by a feature or special promotion — will move products out the door.
“We’re competitive on price with supermarkets and Wal-Mart,” said Brown Derby’s Junge. While that competitiveness may mean thinner margins on beers Brown Derby has in common with competition, the stores make up for it with a broader selection and higher-margin beers.
One way retailers have used pricing to help merchandise products beyond the standard feature price is mix-and-match. John’s Grocery has a “make your own 6-pack” wall of 140-plus single bottles. The store offers a white 6-pack holder with a John’s Grocery sticker on it. Customers can fill the holders with any combination of beers.
At Haskell’s stores, mix-and-match beers are displayed on racks about four shelves high. Customers can put together assorted 6-packs at three different price points.
Binney’s Beverage Depot also has open-ended SKUs in its system so stores can put together mixed 6-packs at different price points. The stores often put together themed 6-packs like Christmas beers, beers of a particular style or from a single country. Stores also put out carts of similarly priced single bottles and let customers assemble their own 6-packs.
Ultimately, your pricing strategy should give customers the perception, at least, that they’re saving money on a particular item. In that case, they’ll be more likely to pay full price on something else.
And there you have it, a back-to-basics program for building better beer sales. It may seem simple, but sticking to basics is often the best way to boost business.
“Beer’s always going to be beer,” Pontoni said, “but if there are ways to portray it so that people take notice, we’ll do it.” *