Clan of the Cave Beer
Given the beer market is responsible for $253 billion in the American marketplace, the convenience channel is a clear stakeholder. But are we missing a glowing opportunity?
Admittedly not a cheap date, beer caves are gaining new traction at a time when beer consumers are becoming increasingly sophisticated and demanding greater variety across premium, standard and craft lines.
And a recent study shared exclusively with CSP suggests caves are generating more than just higher beer sales.
VideoMining’s C-Store Shopper Insights program reports that traffic at stores with beer caves outpaced sites without caves by 40% in 2014 (16,251 vs. 11,612, respectively), and stores with beer caves also saw 36% more buyers (9,448 vs. 6,924).
Consumers also spent more time in stores with caves (3 minutes, 10 seconds) vs. stores without one (2 minutes, 47 seconds), according to the results. Other factors, including foodservice, can also contribute to the increased in-store time—but beer caves clearly play a part.
If retailers become a beer destination people can count on, one well stocked with a varied assortment of brews, traffic will grow and therefore sales will increase, says Mike Lawshe, president and CEO of Ft. Worth, Texas-based Paragon Solutions. As one of the c-store channel’s leading designers, Lawshe is a strong proponent of beer caves as a differentiator and traffic magnet.
“The beer cave is a destination to bring people into the store, but it’s a destination within the store that pulls people deep,” he says. He recommends retailers make beer caves bigger and brighter than the rest of the store to draw in customers—like moths to a flame.
Traffic at convenience stores with beer caves was 40% higher in 2014 than stores without caves.--Source: VideoMining’s C-Store Shopper Insights
Of course, it’s not just about the cave, but also what’s inside it. Staple lines from Anheuser-Busch and MillerCoors are a must. Craft continues to grow in popularity, especially among millennials, with the Brewers Association, Boulder, Colo., reporting a 16% increase in American craft-beer production from January through June 2015 as compared to the same period last year.
And while many major brewers are experimenting with craft, “local” also continues to draw. A Nielsen study shows 22% of beer drinkers said local was an important factor in choosing their craft beer, with that number rising to 32% among 21- to 34-year-olds.
But Lawshe warns that craft shouldn’t be the primary focus of the cave.
Although the biggest profit areas right now are in craft, premium lights and bigger packaging (cases, multipacks) still capture the lion’s share of the beer business. For craft, Lawshe suggests devoting a single wall or using display techniques such as island cases and open cases. “The beer cave attracts a middle-income demographic primarily. So if you are in an incredibly upscale area or an incredibly low-income area, then maybe a beer cave is not for you,” he says. “But if you have a really good mix of demographics—low, middle and high income—where you can create that destination, then it probably is.”