Doing the beer shelf shuffle
U.S. craft beer | With double-digit sales gains and an expanding consumer base, craft beers are popping up everywhere. Supermarkets, big-box chains and convenience stores are giving more shelf space and attention to the category. But how much more space can craft beer get? Behind the scenes there is already a tug-of-war between the Big Brewers defending their territory and the small brewers trying to shoulder in.
There is one thing I sincerely envy the Americans. It’s not their super-size burgers or their wide car parking spaces. It’s their big refrigerated beer shelves in their supermarkets. They are so long that it can take a guy two and a half minutes just to walk along the craft and import sections in one of them. Although he walks briskly and does not drool over individual beer offers, he never even makes it to the Buds and Coors and Millers. How do I know? Well, the guy uploaded his wobbly video on YouTube.
Each time I stand in front of one of these beer shelves I turn green. Metres and metres of beer. Five shelves high. All refrigerated. Imagine the electricity costs alone. Not for the Americans those lovelessly stacked towers of beer crates that you will find in German supermarkets. At ambient temperatures. Or those long shelves that basically only sport one brand in various packaging formats as in France. If you want to be truly overwhelmed by consumerism writ beer you need to head to the U.S., or rather to Texas, where everything is bigger and better anyway, especially at the state’s favourite grocery store: H-E-B. Some people seriously believe that H-E-B is an acronym for Here Everything’s Better, whereas, in fact, it stands for the Howard E. Butt Grocery Company, a privately-owned chain of grocery stores with over 340 outlets and 76,000 employees.
For a European, a visit to H-E-B’s beer aisles is an out-of-this-world- experience. When I went there I saw that facing the long refrigerated beer shelf was an equally long unrefrigerated beer shelf (Americans, funnily, call it the hot shelf, as if anything in their super air-conditioned stores could self-activatingly turn hot), again packed to the nines with beers, many of them in those large wine-sized bottles. Then there were the end caps and the promotional beer stacks featuring individual brands. Not to forget the shelf from where you can pick beer bottles and create your own sixpack. Oh, some H-E-B stores even had beer taps from which customers could have a growler filled for consumption off the premises. There is only one word to describe this beer emporium: AMAZING.
I have no idea how many beer brands H-E-B stock, it must be hundreds. That’s a lot for a supermarket. But even so H-E-B and the other retailers will never be able to provide shelf space for more than a small number of all of the craft brands currently available in the United States. And that’s a worry. In mid-2014 there were some 3,000 craft breweries. Among those were roughly 1,200 brewpubs. Accepted that these won’t seek national distribution, that still leaves 1,800 operators who might like to do so - in their wildest dreams at least. Not included yet are those 1,900 wide-eyed hopefuls that already have a brewery permit and seek to start brewing beer soon.
As Carlos Alvarez of the Gambrinus Company sees it, in the U.S. craft brewers already face a critical “bottleneck” situation that would require an extensive overhaul in the infrastructure of the wholesaler and retailer - one that would be too expensive and inefficient to have any chances of implementation. Trusting Americans’ ingenuity, he is sure there will be creative solutions – such as that illustrated by the explosion of wine-sized craft beer bottles - and probably more and more beer on the hot shelf becoming acceptable to Americans. It’s however difficult to imagine a total overhaul. Thus, the “route to market” difficulties for thousands of beer brands will continue to represent a serious hurdle and many craft beers will have a very hard time growing outside their home markets.
Craft beers steal the show
The Brewers Association (BA), which represents U.S. craft brewers, may boast that sales of craft beer, which tastes better than the mass-market slop, were up 17.2 percent last year, even as overall beer sales fell 1.9 percent. This year looks like a bumper year for craft too. In the first six months of 2014 craft beer production nudged up 18 percent over the same period a year ago, which could take craft beer’s share of the beer market close to 10 percent soon, up from 4 percent in 2008. It’s hardly surprising that craft brewers like Steve Hindy of Brooklyn Beer enjoy rubbing it in that the Big Brewers have lost over 20 million hl in beer volume since 2009.
Still, if you were to stand in front of one of those refrigerated beer shelves you would not really notice.
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