G H Q
As brew SKUs expand, retailers must
keep up without going overboard.
By ReBekah MaRcaRelli
The beer category has exploded with countless brewing styles, hundreds of hops and unexpected ingredients – it’s enough to make any retailer’s head spin. As a result, the aisle often becomes a hodgepodge of legacy brands that have existed since before Prohibition sitting beside a local
craft beer with a name that would make a grandmother blush.
While the number of available beer SKUs has grown exponentially,
grocery stores rarely have the resources to add an extension to their
building to accommodate. Alternatively, they must become resourceful
about the way they go about stocking their beer aisles.
With beer tastes changing, retailers have been driven to create an
assortment that appeals to all shoppers ranging from the hops snob
to the brand-loyal seasoned drinker to the thrifty college student.
Alternatively, retailers can benefit from showing restraint in the variety
of beer they stock and choosing only products that will be most profitable among their shopper base.
“The retailer has a vast assortment of beer in
every store,” affirms Rick Laxague, director of
national accounts for San Diego, Calif.-based
Green Flash. “Their decisions are to add the best
products and brands to attract new shoppers,
increase basket ring and overall dollar sales. By
mixing up how they showcase beer brands, they
will generate excitement for the category.”
Vikas Satyal, senior director of category devel-
opment at White Plains, N.Y.-based Heineken
USA, says the biggest change he has observed in
the beer category is that retailers are starting to discuss how to “right-
size” their beer aisles to maximize sales without stocking too many
SKUs that drive up distribution and logistics costs.
“Specifically with craft, retailers have been excited about the local
boom they are experiencing in many of their markets due to the micro-breweries experiencing so much success,” he says.
“But they’ve also faced a bit of a cross-roads in trying to figure out what the optimum number of
products to stock should be, where they should
be placed and how to avoid a situation where they
continue to add SKUs that don’t merit the velocity.
This is where a clear understanding of an SKU’s
composite ranking across various metrics – balancing velocity, repeat rate, category exclusivity,
etc. – is very important so the wrong SKUs aren’t
deleted or the right SKUs don’t get enough facings
given their demand.”