Natural Foods Merchandiser

Belly up to beer sales

Eliott Whitehurst hasn’t always been into beer. In college he lived in substance-free dorms and rarely took a drink. But seven years later, after dipping his toes occasionally in the waters of craft beer, Whitehurst has taken the plunge—he spends hours on the Internet discussing craft beers, buying up specialty selections and stocking his impressive 200-bottle collection. “I really got into beer,” Whitehurst says from his northern California home. “I don’t like to necessarily think about how much money I’ve spent, but I love the beer community and trying new offerings from craft brewers.”

And if sales are an indication, Whitehurst’s experience is not unique. Although total beer sales for the first half of 2009 were down 1.9 percent, according to the Brewers Association’s annual mid-year report, craft beer sales—beer made by smaller, independent breweries and brew pubs—is on the rise. In the first six months of 2009, total sales rose 9.2 percent, and volume went up by 5.2 percent. The report also shows that consumers are buying more craft beer regardless of price point increases.

The same goes for other specialty beers, such as gluten-free, organic and even microbrewed canned beer. “A major trend we are seeing is an increasing interest in the beer lover to enjoy different styles of beer at different occasions,” says Julia Herz, spokeswoman for the Boulder, Colo.-based Brewers Association. “Most beer lovers in the ’80s and ’90s were enjoying adjunct lagers, but now they are looking for flavor, diversity and choice.”

Jeff Cox, who oversees wine and beer purchasing for PCC Natural Markets in Seattle, is seeing this trend take off at the storefront. “Our customers come in looking for better ingredients, better taste and better quality,” Cox says. “They are doing their homework and researching what specialty beers are available and when they are available.”

Seasonal beers make the meal
Craft beer lovers today are educated, willing to experiment and have a sophisticated palate. The wide variety of options presented by brew pubs and microbreweries has created a wave of seasonal and specialty beers. But this range of options also means distributors and retailers must find strategic ways to supply and sell the beer.

“It can be a balancing act,” Herz says. “Retailers have to choose whether to stock a beer that will be on their shelves for a few months or a beer that will be there year-round. The most successful retailers seem to have a strong selection of seasonal and local favorites.”

As beer varieties increase and customers’ palates become more refined, retailers may also need to don an additional role: brewski sommelier. “Just like wine, we need to educate our customers about what foods go best with a certain beer,” Cox says. “We do this with in-store demos and talking with our customers.”

One website in particular is helping retailers and consumers make sense and good use of the latest beers. is a comprehensive database of seasonal offerings by month and state. The site also includes a long list of food-pairing suggestions, which drives food sales for retailers.

Gluten free and organic get a grip
Other subsets of specialty beers include organic and gluten free. Companies like Fortuna, Calif.-based Eel River Brewing Company have developed certified-organic beers. In select geographic markets, primarily those where consumers are more likely to purchase organic food, sales are strong, according to the Brewers Association. Detailed sales data on this burgeoning market doesn’t yet exist, according to the association.

Gluten-free beers also continue to become more popular as several new brands crafted from gluten-free grain substitutes such as sorghum or buckwheat have emerged. With consumer demand for gluten free at an all-time high (sales surpassed $900 million in 2008), the current niche market for gluten-free beer will likely expand.

To increase sales, retailers such as PCC Markets find that if they flag organic and gluten-free beer with signage as guides, consumers can better identify and recognize the value of these specialty beers.

Canned can sell
Cans or bottles? Let the debate begin. As of mid-2009, about 50 brewpubs and breweries chose to use cans for at least one of their beers. Although the Brewers Association doesn’t yet know how many more breweries are using cans this year than previous years, it estimates that the number has climbed.

“When people drink our beer for the first time, we call it the Ashlee Simpson effect,” explains Marty Jones, spokesman for Oskar Blues Brewing Co. in Lyons, Colo. “Rich and glorious and wonderful from the last place you would expect it: straight out of a can.”

According to Upslope Brewing Co., a new microbrewery in Boulder, Colo., the benefits of canning beer are many: Cans are portable, unbreakable and recyclable, and they block incoming light that oxidizes the beer and alters flavor. In addition, Jones says a case of canned beer is about 30 percent lighter than a case of bottled beer, which cuts down on distribution costs and reduces the carbon footprint by lowering the weight of shipped goods.

Although cans can be a hard sell for some shoppers who assume they’re swill, retailers are now beginning to place microbrew cans next to bottles. They are shown prominently and kept off the bottom shelf where cheaper canned beer often resides.

Bottom’s up
Brewpubs, microbreweries, distributors and retailers remain strongly optimistic about a stout end to 2009 and start to 2010. “We aren’t in the business of making predictions,” says Herz of the Brewers Association. “But it’s fair to say that what we’ve been seeing is continual growth for craft brewers because the market is there, and many packaging brewers have huge room to grow.”

Tim Shisler is a beer lover and travel writer based in Boulder, Colo. His favorite beer is typically a hoppy IPA after a long day of rafting on a pristine Colorado river.

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