When you consider that in the four-week run up to Christmas last year turkey sales equalled £51m (value sales ACNielsen/Diageo), the £333m off trade beer sales over the same period are put into some kind of perspective. However, while penetration of households by beer and cider at 44.4% is only slightly down on 2004, and frequency of purchase remains static, spend per buyer is down from £24.20
to £23.30.
The good news is that there are signs that discounting in the multiples is getting less rabid. The percentage spend on beer on promotion was down from 49.1% to 44.6% last year (AC Nielsen Homescan/Diageo). Many industry commentators that Convenience Store spoke to said they thought that deep discounting in the multiples had gone just about as far as it could at Christmas, which should hearten small retailers. As Diageo marketing director Russell Jones says: "It's very easy to get seduced by the idea that when it comes to beer, all that matters is price."
Discounting by the multiples isn't likely to disappear altogether, though. S&N head of customer marketing Craig Clarkson says that some discounting is expected this year. "It's about striking the right balance and getting the right deal for the consumer, but not going too cheap." He says that the efforts to put value back into the market place need to be industry led: "There's no point an individual retailer or supplier making moves on their own within the market, they would be gazumped by others. It has to be a consolidated move forward."
Even though the share of beer sales through the off trade sector at Christmas have declined consistently over the past three years, from 24% for the week ending December 27, 2003, to 16% for the week ending December 25, 2005, Coors Brewers director of sales, impulse, John Heynen, says that small retailers can still do well. "This time of year still represents a fantastic opportunity for small stores. A lot of this comes from doing the basics well: stocking the products customers want, in pack formats that meet their occasions, and ensuring full availability."
Heynen acknowledges that the kind of discounting on large multipacks experienced at this time of year and seen during the World Cup will continue, and emphasises the importance of c-stores delivering a point of difference. "Too many small stores think the only way to compete is by offering the same packs at the same price as the multiples, when they should be thinking about why consumers would choose to shop in their outlet in the first place, such as convenience, drink-now occasions and availability."
He adds: "Few consumers will be willing to walk to their local store and carry home two full cases of beer. Offering larger pack sizes of leading brands such as Carling 15-packs and 18-packs and Grolsch 20x300ml bottles at key price points provides a real opportunity for upweighting cash spend on the category in a small store, and we will be pursuing these activities across the impulse sector."
InBev UK's Stuart MacFarlane says if he were a c-store retailer: "I'd focus on mid-range multipacks at key price points, for example, 'eight bottles for £5', and ensure there is a larger pack available at a good price, for example, a 12- to 18-bottle pack for £10. My main space allocation would be six- and eight-packs."
Clarkson believes small retailers should look to speciality beers for an opportunity: "Speciality beer has grown to a huge extent in the multiples over the past year. There's an opportunity there."
Hall & Woodhouse marketing manager, brands, Ricky Payne, points out that ale isn't subjected to the kind of cut-throat discounting as lager is. He says: "Last year Badger ales was up 40% in the off trade year on year and the overall bottled ale market was up 7%."
However, he doesn't think smaller retailers are taking advantage of the growth in ale given that while multiple sales are up 7.7% (MAT AC Nielsen), impulse is down by 0.2%. "Retailers aren't taking advantage of a niche in the premium market. They are still missing an opportunity."
He says premium bottled ale drinkers will buy without deep discounting and warns: "Don't waste floorspace on stock you have to discount hugely to compete with supermarkets - it's not worth it."
With ales he recommends keeping the brands while maintaining innovation and having a small local display. One way smaller retailers can differentiate themselves is by ranging bottles regionally as ale drinkers, like wine drinkers, are often interested in breweries and regional beers and will therefore be willing to try something new.

It's all in the planning

The Federation of Wholesale Distributors' Take Home Blueprint for ales, lagers and ciders was relaunched in September in time for Christmas and, according to scheme director Ross Shelley, has changed considerably since its first incarnation 11 years ago. The TV regions that the plans were previously defined by have now been amalgamated into four regions and the new plans include insights into engaging customers, the impact of impulse and cross-category purchases. Advice is also given on preparation for occasions such as the use of floor packs for promotions.
With cider sales so buoyant the pack includes help for retailers who would like to focus more on cider, with advice on setting up a dedicated fixture.

Christmas presence

l Fuller's new launch, the 2006 Vintage Ale, will come in a limited edition of 100,000, with each bottle individually boxed and numbered.
l Carling has produced a pricemarked pack range exclusively for the impulse sector that includes: Carling 4 x pint can at £4; Carling 8x275ml bottle at £4; Grolsch 4x500ml at £2.99; Grolsch 8x275ml bottle at £4; Coors Fine Light Beer 4x300ml at £3.29; and Caffreys 4x440ml at £2.99.
l Budweiser will be producing pricemarked packs and gift packs including Budweiser 6x330ml bottle at £5.50; 4x500ml can at £3.99; and Bud Silver 4x440ml can at £3. A pos promotion on Bud Silver will comprise shippers, shelf-talkers, bunting and fridge stickers.
l Diageo will be spending £7m on marketing Guinness over the Christmas period, with a strong focus on the off trade which will include TV and radio, targeted direct mail and emails.
l Carlsberg has launched a new Christmas beer adapted from the Danish Tuborg Julebryg. Carlsberg's Christmas beer has a 5.6% abv.
l Hall & Woodhouse is running a unique pack through Costco of 16 bottles of four Badger varieties, all award-winning beers.
l S&N has a special deal at Christmas with 'three for £4' across NPD in cider.

Cider revival

Retailers who are still ignoring this category should think again. Driven by the popularity of Magners, the premium cider category has experienced the kind of revitalisation that rarely happens.
The on trade has seen traditional beer drinkers turn instead to a cold pint of cider, and there's no reason why that shouldn't be replicated at home. And while cider is more seasonal than beer, S&N head of customer marketing Craig Clarkson believes it should still sell well at Christmas.
Merrydown managing director Chris Carr reports that Christmas has always been good for his brand, with the season bringing a 30-40% increase on weekly sales. He says retailers need to be aware just how popular cider has become: "Magners has done
a fantastic job. There is a huge opportunity for independents to get on the back of the change. Supermarkets and the on trade have caught on."
The trend for cold cider is one which Carr says c-stores can make a lot of as most cider in supermarkets is sold in ambient fixtures. "I think cider is better cold from the fridge," he says.
Both he and Craig say they are continually shocked to see two to three white ciders on sale in many c-stores and Clarkson concedes that since S&N raised its prices, others have been snapping up the sales.