Craft Provides the ‘Adrenaline’ for Growth at Binny’s Beverage

Michael Binstein, the CEO of Binny’s Beverage Depot, has what he calls a battle cry: “If you can’t find it at Binny’s, it’s probably not worth drinking.”

That cry is also his company’s motto and a reflection of just how successful the Midwest’s largest, independent beer wine and liquor retailer was last year. In 2012, the company grew to 29 locations, serviced over 7 million customers and boasted $330 million in revenues.

So what’s bringing all the customers through the door? Craft beer.

“There is more adrenaline in the craft beer part of the store then there is anywhere else,” said Binstein at last week’s Beer Marketer’s INSIGHTS conference in Chicago. “It’s something you can’t define, but you know it when you see it.”

Beer made up 20 percent of the $330 million in Binny’s sales, Binstein said, and it’s the smaller brands driving a majority of the growth. Craft beer sales at Binny’s were up 22 percent in 2012 and are up 320 percent from five years ago.

Part of the growth is fueled by Binny’s desire to cater to a wide range of craft consumers. Spurred by a policy of “no customer left behind,” Binny’s currently stocks an astounding 7,951 beer SKUs across its 29 outlets and sells 35 different package sizes, the cheapest of which is a 16 oz. can of Cold Spring Brewing Northern Golden Lager for $1.09.

And even though Miller and Budweiser are Binny’s top selling brands in terms of dollars, the recent growth of craft has led to somewhat of a David versus Goliath story within the company’s walls.

“Every customer is a jump ball,” Binstein said. “The craft beer customer is someone who likes to date and bring home someone new every night.”

Binny’s has encouraged this promiscuous approach to craft by establishing a “create your own 6-pack” merchandising program. The company enables its customers to choose from 180 different craft beers and create their own 6-pack, which retails for $9.99  The package is now the number two selling SKU at Binny’s with 113,000 units sold since its inception two years ago.

The success of the package is part of why Binstein is dedicating more space to beer. At some of its locations, the company is building 30-door beer coolers while at the same time dedicating additional floor and shelf space to craft.

“I see it becoming 25 percent of our floor space in next 18 months,” he said.

And just as Binny’s has transformed from a 13-unit, $50 million business in 1995, so too has its average beer customer. Binstein painted an image of the new “Joe Sixpack,” as a craft customer who is increasingly female, well-educated, well read, environmentally conscious, wired, independent, passionate and anti-corporate.