Supermarket Sweep

Today saw another announcement of craft breweries selling their beers into a major supermarket.

And it was quickly followed by cries of “sell out”, and not so quickly by people wondering how this will affect the smaller bottle shops. Especially coming on the heels of the announcement of Bottle Shop closing.

I’ve talked about this a bit before, but I’m wanting to put it down in writing, how I see that this could be for the betterment of our industry. If the industry works together rather than goes straight into toys-out-of-the-pram panic. Don’t worry, this won’t be long enough or in-depth enough to need charts or tables.

In 2017 Craft beer sales increased by 1.7%, bringing them to a total of 6.5% of UK beer sales. Flip that on its head and you see that 93.5% of UK beer sales are not from the smaller craft breweries. 93.5% of beer sold in the UK is from the bigger, or more traditional breweries.

Craft beer is a niche.
And it’s a niche in a declining market.

Overall beers sales are going down, and as the larger breweries fight to keep their sales up, it’ll be the smaller independents that will get forced out of the market. There’s no way that the small guys can afford the multi-million-pound advertising spending of the multi-nationals.  And with more and more smaller breweries around, we find that we’re fighting (usually in a very amicable way) for what is becoming a dwindling share of a more and more crowded niche in this declining market.

This is further exacerbated by faux craft. By multi-nationals launching their own range of “craft” beers that sometimes have as little to do with craft as the letters “IPA” on the packaging. Or by buying up craft breweries to give themselves an in-house portfolio of craft beers, with the profits still going to their shareholders.

Overall, it’s not the easiest niche to survive in.

So what can be done?

For independent craft beer to survive, we as a sector need to increase our market share. And to do that, we need to take the big boys on on their home ground, the supermarkets. When your average beer consumer from the 93.5% of the overall beer market buys a craft beer in the supermarket, it’s rarely because it’s got great scores on Untappd, or that they’ve been intrigued by the reviews on RateBeer. It’s because they see the “craft” selection, and they wonder what all the fuss is about. So they may, or may not try a beer or two.

Previously, the faux craft they’ll have tried will likely as not have made them wonder what all the fuss is about, and go back to the cans of Carling (lagered for a whopping 5 days no less!). And our niche stays a niche.
But with proper craft beers on the shelves next to the fake, there’s a growing chance that the 93.5% drinking will be introduced to something so much better. Something where there is an aroma that hits you as the can opens, where there’s a flavour that gets enhanced with every sip. A beer that is for drinking, not just swilling.

And, there’s a small chance that the 93.5% drinker will move over to the 6.5% And that Craft beer may become more than 6.5%, it may become 7%, or 8%, or 10%. By taking these beers to the general public we may increase our market share, and it may mean that more small breweries can survive, enjoying a wider share of the market rather than fighting over our niche.

But what of the independent bottle shops? With breweries selling into supermarkets and their notorious price points and deals, how can the independents compete? That is down to the breweries who supply the supermarkets to recognise as a problem, and to work with the bottle stores.
It’s very unlikely that supermarkets will stock a brewery’s entire range, especially DIPAs, TIPAs and Big ‘Ole Barley Wines, and it’s to be hoped that breweries won’t supply them. For the independent bottle shops to not just survive, but to thrive, we need these breweries to supply the supermarkets with the gateway beers, not the specials. We need those purely to go to the independents. We need for the supermarket sales to drive new drinkers to the bottle shops to seek out other beers from them.

We need the breweries and the bottle shops to work together on this, to put the gateway beers into the supermarkets to increase the market share, and to use that to drive customers to the smaller independents for a wider, more special range where we can solidify the conversion to flavour. Maybe with a listing of other beers available (just not in the supermarkets), or links directly to parts of the brewery website with lists of stockists of their other beers. However it’s done, I hope to see joint events between breweries and bottle shops, cementing the relationship that’s needed for them both to thrive.

PS: Cold-chain is a whole different issue.