Trying Times

Buoyed by grocers’ interest in sampling events and food pairings, the beer and spirits categories continue their tilt toward millennial and multicultural.

At Boulder, Colo.-based Lucky’s Market, a crucial part of selling beer and spirits is to make sure shoppers know what they’re getting.

“We typically feature tastings in our stores to introduce local artisans and their products to our customers,” says Bo Sharon, co-founder of the four-store natural food chain with his wife and fellow chef, Trish. “Tastings are key to helping customers find new favorites and taste the value and quality of our offerings firsthand.” Lucky’s additionally provides “easy-to-find in-store products with non-intimidating, low shelf heights, helpful category signs and great prices on everyday favorites,” says Sharon, as well as designated areas where shoppers can spend more time learning about beer and spirits.

Samples are also on tap at Woodland, Calif-based Nugget Markets, which regularly schedules in-store beer tastings, as well as participating in such local events as Sacramento Beer Week and Davis Beer Week. The grocer additionally provides seasonal cocktail recipes in-store and online, and puts out a bimonthly publication, Salud, that promotes spirits and beer, among other beverage alcohol offerings. “Guests want to try something new every day,” notes Mike Taylor, Nugget’s beer category manager.

Pair Thee Well

Beer companies are responding to this excitement at food retailers by providing appropriate programs. For example, St. Louis-based Anheuser-Busch is expanding its “Brew Appetit” restaurant program to the grocery channel, where the company plans to team up with local or (where allowed by law) in-store chefs on sampling events that pair foods with A-B beers such as Stella Artois and other high-end brands, as Sanjiv Chhatwal, VP of trade marketing, told Progressive Grocer Editor-in-Chief Jim Dudlicek late last year.

“Sampling is going to be a huge initiative for us,” Greg McLeod, A-B’s VP trade channel marketing grocery, told Dudlicek during a trade press open house in St. Louis last fall. “Connecting on-premise and off-premise [consumption] … retailers have been very receptive to this.”

Meanwhile, Chicago-based MillerCoors has come up with its own initiative. “We’ve noticed that U.S. grocers have done a great job with wine as far as shopping experience and infrastructure investments,” notes company spokeswoman Cat Corrigan. “We believe beer pairs just as well — if not better — with food. To that end, we’ve developed and tested a customizable ‘Pints and Plates’ solution that lets grocers bundle food-and-beer options, and can be supported with mobile and social media as well as in-store POS. Test stores have seen a strong dollar lift, and shoppers say they walk away with a higher appreciation of the retailer’s expertise in beer.”

On the craft side, Boston Beer’s Sam Adams makes its own dining recommendations. “At retail, we look to incorporate Samuel Adams into drinkers’ everyday lives with cross-promotions such as pairing Samuel Adams beer with beef, seafood, and even pies or recipes, so that a drinker has an all-around tasting experience,” explains George Ward, director of off-premise national accounts for the Boston-based brewer. “Visibility is important at retail, so we use tools like POS, posters and recipe cards to showcase Samuel Adams and the associated programming such as food pairings or recipes.”

The Two Ms

But just who’s trying — and buying — these beers and spirits? Manufacturers increasingly cite rising interest among millennials, multiculturals and, you guessed it, multicultural millennials.

“LDA [legal drinking-age] millennials are driving the growth of our brands,” affirms Jim Sabia, chief marketing officer for Constellation Brands Beer Division, in Victor, N.Y. “Millennials currently account for approximately one-quarter of the U.S. population, and 35 percent of beer volume.

“Of course, a big portion of these millennials are Hispanic,” continues Sabia. “In fact, one out of every five millennials is Hispanic. They are so important to the beer industry because of their size, purchasing power and influence.” He cites company research finding that Corona is the most popular beer among Hispanics, with 25 percent naming it as their favorite brew — two and a half times more than those who prefer the brand’s nearest competitor. “They tell us that Corona best represents their lifestyle and their Latino pride,” Sabia says, adding that the brand is also seen as the most multicultural, since there are “literally dozens of U.S. markets where Corona is No. 1 among African-Americans, Asians and Hispanics.”

To appeal to this target audience, Constellation rolled out Modelo Especial Chelada at retail locations in California, Nevada, Arizona, New Mexico, Texas and Chicago in October 2013. The line’s tomato, salt and lime flavors, packaged in ready-to-enjoy 24-ounce cans, were supported by a full arsenal of marketing tools, including Spanish-language television spots, radio, trade ads, point-of-sale materials and social media. “The recipe was carefully crafted to deliver a true Mexican chelada taste with the convenience consumers are seeking,” notes Sabia. Modelo is the No. 3 imported beer in the United States.

White Plains, N.Y.-based Heineken USA’s upcoming new products geared toward a similar demographic include Dos-a-Rita, a premium ready-to-serve lager margarita extension from Dos Equis; Desperados, a tequila barrel-aged beer with a hint of lemon; and the launch of Heineken and Heineken Light in an 8.5-ounce Slim Can format. “Heineken will be the first upscale brand to offer the 8.5-ounce can — a format that is especially popular among multicultural male consumers,” points out Dirk De Vos, SVP and chief commercial marketing officer.

The company’s promotions will also continue to evolve to reach its products’ optimal users. “In 2014, we will deliver breakthrough marketing and retail programming that reaches the upscale millennial and multicultural consumer at multiple touchpoints (traditional, digital and social media; in-store merchandising; special events; and sponsorships), and deliver increased sales and profits to our retail partners,” explains De Vos.

One such effort is the “Vive Indio Vive Latino” retail program in support of Indio, the dark Mexican beer. Developed by Dallas-based multicultural promotions agency Culture8, the campaign is anchored on Vive Latino, a major alternative rock and art festival scheduled for March 27–30 in Mexico City. Between January and February, consumers across key markets were exposed to thematic POS, cross-merchandising MIR and IRC offers, and an interactive shopper contest offering them the chance to win a trip for two to Mexico to attend the event. To enter the contest, consumers could post a video on Instagram showcasing their own unique skills.

High Spirits

A similar accent on youth is evident in the spirits category. “Millennials in particular enjoy flavored spirits, since they have had a lifetime of flavor choices across many categories, including water and candy,” notes Christa Bryant, channel portfolio manager at Louisville, Ky-based Brown-Forman, whose famous brands include Jack Daniel’s.

Also like beer, spirits are branching out into other parts of the store to engage consumers. “Shoppers are looking for drink and meal solutions from spirit brands,” says Bryant. “We partner with out-of-category brands in-store to provide a total solution. Throughout the year, we provide shoppers with recipes for seasonal drinks they can make at home while relaxing or entertaining others. … In-store, we offer displays which feature Jack Daniel’s Tennessee whiskey, Jack Daniel’s Tennessee Honey, Jack Daniel’s barbecue sauce and marinades, recipes, and offers for additional grilling items, so that a shopper has a complete grilling solution. These out-of-the-spirit-aisle displays drove incremental buyers for the whiskey and condiment categories last summer.”

In keeping with the multicultural trend, Brown-Forman’s El Jimador tequila last September rolled out a new package design, “which is more premium and matches the quality of the product,” according to Bryant. “The revamped bottle features a dynamic embossed illustration of the iconic Jimador, a figure that represents the hard work and dedication to craftsmanship displayed by the master agave harvesters.” Additionally, during key times, the brand brings out soccer-themed wrapped bottles to promote its partnership with the Mexican and American men’s soccer teams.

To capture these consumers, Brown-Forman relies on dynamic marketing in the digital space. “Consumers are extremely passionate about their favorite brands and engage heavily online via social media,” observes Bryant. “We find that over half of shoppers have decided to purchase a spirit category before entering the store, with many using an online source to look for cocktail recipes and source category and brand education. Our brands use Facebook, Twitter and Instagram to engage shoppers with recipes, new products, brand events and promotions. … Most of our promotions have digital components which provide shoppers with a fun way to connect with our brands, such as the Jack Daniel’s Tennessee Honey Summer Swarm,” a contest inviting consumers to “send a photo of you or your swarm enjoying the season of summer.”

“It continues to be increasingly important to connect with consumers on and off premise through impactful POS, national and regional advertising, and strong digital presence through social media and advertising,” concurs Diana Pawlik, VP of marketing at Constellation Brands, whose Svedka Vodka brand will introduce two new flavors this spring: Strawberry Lemonade and Mango Pineapple. “Svedka Vodka quickly grew to over 1 million Facebook fans, with one of the highest engagement rates in the industry. [The brand] spends a great deal of time and energy providing our social audiences with relevant, eye-catching and palate-pleasing content to help our consumers connect even further with the brand.”

“Tastings … are key to helping customers find new favorites and taste the value and quality of our offerings firsthand.”
—Bo Sharon, Lucky’s Market

“One out of every five millennials is Hispanic. They are so important to the beer industry because of their size, purchasing power and influence.”
—Jim Sabia, Constellation Brands Beer Division