New flavors brew up interest in beer
The beer category wants its mojo back. After losing share to wine, spirits and small breweries for several years, major brewers are out to win consumers back to the category with new products that are a big departure from their classic offerings.
The success of Bud Light Platinum, with its higher alcohol content and sweeter taste, has sparked a flurry of flavored malt beverages into the beer market. This year alone, Anheuser-Busch InBev is launching nearly 20 new products to the U.S. market.
“The spirits people learned that younger consumers are looking for newer tastes, and big brewers have come up short on new flavors and innovation in a category that depends on a churn of new flavors and packaging,” said Eric Shepard, executive editor at Beer Marketers Insights.
Big brewers now aim to close the gap. A-B recently launched Michelob Ultra Light Cider, a gluten-free cider made from apples featuring one-third fewer calories and a sweeter taste than traditional ciders. Rather than positioning the beverage as a seasonal drink, A-B is pitching it as a year-round beverage that can be poured over ice. Beer over ice also is the approach A-B is taking with its Bud Light Lime-a-Rita, a malt beverage containing 8% alcohol, that’s billed as a margarita alternative. Under its Michelob Ultra label, the company also is rolling out a tea-and-lemonade drink called 19th Hole.
Molson Coors Brewing Co. is launching its own Coors Light Iced T in Canada, and is likely to extend the launch to the United States.
The low alcohol content FMBs also can be sold in many outlets where spirits cannot, offering retailers more opportunities to appeal to consumers looking for an alcoholic beverage with an interesting taste profile.
While traditional brands try on new flavors, craft beers and imports continue to power the category. Craft beer dollars were up 15% in 2011, according to the Brewers Association, and accounted for 6% of total beer category sales. That share is expected to continue to rise.
Boston Beer Co. and Sierra Nevada Brewing Co. held the top craft brewery spots last year, but big brewers are nudging into the category. A-B’s Shock Top brand had double-digit sales increases last year with such new flavors as pumpkin ale. Both A-B and MillerCoors have introduced summer shandy flavors this year. India Pale Ales and seasonals remain the hottest segments of the category, according to Shepard.
Imports also have seen a nice spike in sales, with A-B’s Stella Artois and Grupo Modelo’s Modelo Especial and Victoria showing
Fresh piques stores’, consumers’ appetites
Drug store chains have an enormous appetite for consumables. Fresh food sales — defined as dairy, deli, fresh meat and fresh produce — grew nearly 13% year over year through April, according to ACNielsen data.
The desire to add more fresh foods to their stores is even driving new store formats, according to Jonathan Stack, president of Panache Cuisine, a supplier of fresh and prepared foods. “Open-air coolers are the predominant vehicle for merchandising, and we are seeing retailers adding sections that run anywhere from 4 ft. to 9 ft.,” he said. Some retailers even are experimenting with island cases positioned in the middle of the store.
Merchandising is crucial to the category’s success. “Consumers are open to purchasing fresh product from more than just traditional grocery stores. The key is for the product to be merchandised in a clean, neat manner that conveys a level of attention that proves comforting to the consumer,” said Tom Sicola, VP marketing at McLane.
Stack said that new offerings from Panache are driven by the college campus segment of his business. “Those consumers want fresh products with no preservatives and ingredients that are locally grown,” he said. “Consumers also want eco-friendly packaging.” Those products also now can be delivered on a just-in-time basis to retailers.
“Short shelf life and spoilage is always a barrier to overcome when entering the fresh arena,” Sicola said. “Our strict ordering system allows for short shelf life product, such as fruit or fresh sandwiches, to deliver with the retailer’s regular delivery, but lose minimal shelf life moving through the supply chain. We are able to leverage pricing on fresh products to offer retailers a better cost than they would be able to negotiate on their own, ensuring a larger gross margin and larger net margin as well.”
As consumers look for healthier choices, healthy fresh options continue to grow at the drug channel. “Distribution of fresher, better-for-you products has been growing,” Sicola said. “We are seeing larger demand for products like yogurt and cheese sticks.”
Hot, fresh foods are another growth area on the horizon. “There’s a lot of opportunity in the ‘hot-and-go’ arena,” Stack said. “Packaging innovations are allowing us to put sandwiches in a panini grill in the packaging so consumers can get a hot entrée in a convenient setting. With very little floor space, drug stores can set up small bistro areas that can become a traffic generator.”
Hershey names new legal head
HERSHEY, Pa. — Hershey has named Leslie Turner as SVP, general counsel and secretary, effective July 9.
In her new role, Turner will lead Hershey’s legal, government relations, corporate security and corporate secretary functions. She will report to Hershey president and CEO John Bilbrey. She also will serve as a member of the company’s global leadership team.
"Leslie has significant experience working closely with corporate governance matters and brings a broad business orientation and diverse global background to this role," Bilbrey said. "She has a proven record partnering with leaders and business units to drive strong results, and she is adept at aligning legal strategy with strategic objectives and building collaborative, business-focused legal teams."
Turner joins Hershey with 25 years of legal experience. She has served as a senior legal executive providing strategic counsel, risk management and policy advice to senior business leaders of Fortune 100 and 500 companies. Most recently, Turner served as chief legal officer for Coca-Cola North America, a position she held since 2008.