Back in November, 3×3 Insights CEO, Mike Provance, was invited to present at Brewbound Live. The conference is a two-day gathering for beer, cider and flavored malt beverage professionals from every tier of the industry.
In his session, Mike shared shared five key industry insights on craft beer, taken from 3×3’s exclusive network of independent retailers. Check out the breakdown below and make sure to tune into the full presentation, plus Q&A with Brewbound’s Chris Furnari.
- Mainstream beer brands win in the summer.
Our data shows a slowdown in beer sales from 2017-2018. For most of the period, craft beer stayed on pace with mainstream brands. In the summer, however, mainstream brands pulled away, gaining sales that craft couldn’t match.
There isn’t an obvious datapoint underpinning this shift, but Mike has a guess: mainstream brands have more control over discounting their product. They can distribute for less and pass those savings on to the customer in ways that craft brewers often can’t.
- Churn is a growing problem (and it’s worse for high-count packaging).
Beer churn — i.e. low brand loyalty at the register — is a growing challenge for brands. Interestingly, craft beer 12-packs have a higher churn rate than craft beer 6-packs, showing that customers are more fickle when it comes to larger sizes.
- Think locally: packaging and pricing.
Our data from Boston, New York City and Metro Denver revealed valuable insight about pricing and packaging. In Boston and NYC, where consumers are often walking rather than using cars, larger packages (like 15-packs) don’t sell as well as in other areas. Smaller containers, like 4- and 6-packs, were more consumer-friendly.
We also looked at the price points of these different packages. Interestingly, in Boston, both 12-packs AND 4-packs typically sell in the $13-16 range, despite the difference in quantity. This suggests that many customers are walking into the store with an amount they want to spend, rather than a package size they want to purchase.
- Find the price gaps.
Looking at 4-packs under $8, mainstream brands clock more sales than craft beers. But once you move above an $8 price point, craft beers dominate. Larger pack sizes, on the other hand, show less priced-based polarization.
We also dug into price gaps. For example, few 4-pack sales occur at $6 or between $19-21. Filling these price gaps is vital for independent retailers. Fighting against big box stores and online sales means taking advantage of any competitive lift out there. If you know customers are coming in to spend $20, you can stock items accordingly and capture the segment.
- Craft wins when it comes to basket value.
The data shows that craft beers are pulling higher average basket spend than mainstream beers. Accentuating the higher basket spend of craft beers — through data-driven promotional pairings and product displays — can help retailers push even more incremental lift.
Watch the full presentation above, and see more from Brewbound Live on their website.
If you’re ready to see more insights for your store or your brand , let’s talk.