By Andy Young
While craft beer in Australia is still behind countries like the US and the UK in terms of its percentage of the overall beer market it is continuing to grow.
The recent ALSA and IRI State of the Industry Report showed that craft beer grew in value by 19.2 per cent and in volume by 21.1 per cent in 2015. But how can retailers make the most of the category? Derek O’Donnell, the general manager of Australian Beer Company, told TheShout that he believes education is key and that craft beer provides a genuine margin opportunity for retailers.
“Craft beer is not being brewery-led or even retailer-led, what is making Australia no different to the UK or the US is that it is very much being led by the consumer and by the beer drinker,” O’Donnell said. “There are more and more beer drinkers now looking out for the extra flavour, the extra choice that craft beer tends to offer.
“Even though we talk about experience in on-premise quite a lot, actually the retailers in off-premise who are now starting to get some real traction are offering a bit of experiential in off-premise. It can be done and it can be done through expressing or being upfront about the stories behind the brewers and their craft beers and the origins or provenance and so on.
“The retailers are investing in education and they are realising very quickly that beer maybe 10 years ago was very transactional. If you take a mainstream beer purchaser they would just go into a store grab a carton and then be out maybe even inside of two minutes. Now if you look at craft beer drinker they actually go in, they are exploring, they are looking for that bit of experience, education and storytelling and they may be in there for 10 to 15 minutes.
“So in the context of what retailers can do in the context of merchandising and cross-selling there’s a lot to be done about the education. There’s the opportunity to understand that craft gets purchased in six packs first not in cartons. So making six-packs available, allowing sampling, meet the brewers and just any opportunity to take a taste and sample a beer encourages trial, that would be what I can see what retailers can do to support the growth and attract a higher margin for themselves.”
ATTRACT MAINSTREAM BEER DRINKERS
O’Donnell added that Yenda is proving successful in getting people to move from mainstream to craft beers.
“We were very lucky to partner up with a national independent banner group last year,” he told TheShout. “One thing that really struck us from the data that we captured was that Yenda was attracting people across from mainstream and therefore growing craft beer, like we want to as a category. We saw that retailers who stocked Yenda saw a 34 per cent increase in their craft beer sales. So we are clearly seeing repeat purchases, but more importantly we’re attracting beer drinkers into buying craft beer. So it works for retailers and helps create a story around margins that may not have been in evidence with mainstream beer. We want to grow the category and that 34 per cent went beyond Yenda and into other craft beer brands and it’s an exciting journey I think.
“We’ve got a real lead in Yenda Hell, where we are trying to excite people about having a craft beer that is a lager and then we’ve got stepping stones all the way through to our IPA. So we’re trying to say you don’t have to fear craft you can actually start with lager, move into ales and it is a bit of fun.
“You can walk into some retailers and craft beer might not be too shoppable and it can look a bit complicated but if retailers can differentiate the different styles of beer and then provide a bit of education on those that can help take some of the fear out of the purchase and consumers will have more confidence in making a purchase and exploring what different beer styles and flavours can actually taste like.”
For more on craft beer see the April issue of National Liquor News.