National Retailers Discuss Online Sales and Changing Mandates at Beer Industry Summit

A growing number of consumers are turning to online ordering and delivery apps, executives from top on- and off-premise retailers shared during Beer Business Daily’s Beer Industry Summit earlier this week.

“I’m amazed by how quickly our customers are adopting pick-up or delivery,” Walmart VP of adult beverage Jason Fremstad said during a panel discussion with off-premise retailers. “It is a very, very big focus for us.”

By the end of January, Fremstad said 600 Walmarts in California and Florida will offer home delivery of alcoholic beverage purchases. In November, Walmart added alcoholic beverage purchases to its curbside grocery pickup service at 2,000 locations in 29 states.

According to Fremstad, Walmart believes the majority of its online shoppers are premium customers who use the service for its convenience.

Meanwhile, chain restaurants are embracing home delivery apps such as DoorDash and Grubhub and curbside pickup through their own online ordering systems. However, these purchases are only food and non-alcoholic beverages.

Lacey Lauderdale, beverage manager for Baton Rouge, Louisiana-headquartered sports bar chain Walk-On’s Sports Bistreaux, said online sales have been both a blessing and a curse.

“It concerns me for beverage sales,” she said. “Food sales — it’s great, it’s all incremental. We want that human to actually come in to interact with our staff and to buy booze.”

Buffalo Wild Wings beverage innovation manager Jason Murphy said the chain is using national advertising to drive traffic in stores, rather than online sales.

“We are trying to remind people that it is a lot more fun to watch sports with your friends out at a bar,” Murphy said. “And that’s really what we’re going for in 2020.”

In 2019, Buffalo Wild Wings returned to growth after three years of declines, thanks to a heavy focus on price promotion on domestic light lagers and buy-one-get-one deal nights for wings.

During football season, Buffalo Wild Wings offered deals on pitchers and pints of light lagers. Bud Light remains the chain’s best selling beer.

“We use that as our workhorse while also using craft and imports to try to recruit,” Murphy said.

Beer sales account for 80% of Buffalo Wild Wings’ bar, with 93% of sales coming from draft. Lauderdale added that beer makes up 53% of Walk-On’s beverage sales, 80% of which is on draft.

How those draft lines are dedicated varies by store. Walk-On’s has switched from not requiring mandates on food or beverage menus to an entirely mandated menu, giving each location the ability to customize up to 10 draft lines.

“It works for us, so it’s not the wild, wild west out there,” Lauderdale said.

Buffalo Wild Wings has decreased its national draft mandates overall, although the company still mandates nine beers at all locations with 30-plus draft handles. They include Bud Light, Coors Light, Miller Lite, Michelob Ultra, Blue Moon Belgian White, Angry Orchard Crisp Apple, Lagunitas IPA and Modelo Especial. Dos Equis Lager is required in all stores with 25 or more taps. Three tap handles are reserved for bimonthly rotating national marketing programs. At corporate-owned locations, each state has 10 additional mandated tap handles based on local trends.

That makes for 22 tap handle mandates in corporate locations, down from 23 in 2019 and 2018.

“The remaining eight handles are planned by the local teams in each market, with the expectation that the bulk of those handles are going to breweries that are local and hyper-local,” Murphy wrote in an email to Brewbound.

Buffalo Wild Wings restaurants are evenly split between corporate and franchise ownership, but franchisees have fewer mandates, giving local owners more autonomy.

“We do have an expectation as a brand that they will follow a similar assortment strategy that we lay out for our corporate restaurants,” Murphy said.

Fewer mandates means more room for local craft, although Murphy told conference attendees he often finds himself on the other side of the sales call.

“With the shift that we’ve made going to more craft — more regional, more local craft — I found myself cold-calling many brewery sales reps,” Murphy said. “I get on the phone with them and they say ‘This isn’t how this works.’”

During the off-premise retailer panel, Whole Foods beer and spirits global senior category merchant Mary Guiver said the natural food chain added its first-ever national beer mandate for a single product, Modelo Especial 12-packs, and sparked a “massive cultural shift” at the store level three years ago.

“Our stores lost their minds,” she said.

Since then, Guiver’s team has expanded mandates, while allowing for local customization.

“Bud Light is the No. 1 beer in America. We can’t not carry that,” she said. “Our customers expect local. They want local. It’s our job to figure out how to build an infrastructure globally that allows that space to continue to grow, including local.”

Guiver added that White Claw is Whole Foods’ top-selling beer SKU.

Whole Foods mandates 10% of SKUs in larger stores and up to 40% of SKUs in smaller stores, Guiver said. Stores can add new products daily or weekly to keep up with local trends.

“We continue to grow craft, and that growth we keep talking about is coming from the long tail, and that means local and hyper-local,” Guiver said.

That translates to fewer slots for larger national brands such as Sierra Nevada and Boston Beer.

“We don’t want to lose sight of the fact that those are still some of our top brands, but there is some SKU rationalization happening,” Guiver said. “We’re trying to, if they’re a national brand, make those decisions for them as much as we can.”

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