Rather than my usual ‘how to’ focussed pieces, your friendly Drinks Trade editors have asked me for an opinion piece on the impact of increasing the amount of imported beers made locally. I welcome your comments and points of debate, as what follows is simply ‘sample of one’ – albeit through the shopper’s eyes rather than mine.

Opinions are widely divided on the ‘locally made imports’ topic, ranging from the usual bland and commercial corporate standpoints of the big brewers, to highly emotional rants from some of the smaller suppliers looking for an opportunity to stick one up the ‘big boys’.

So let’s get back to shopper reality, shall we?

If a shopper/consumer finds out that the imported beer they usually drink is now being made locally, their first reactions are likely going to be:
* Do I care? (So what?)
* Should I care? (Why would I care?)
* Are they ripping me off, or can I get it cheaper because of this?

And the answers to all of the above are, it depends. On who I am, and why I’m drinking that particular beer in the first place, and what I’m paying for when I buy the beer – Name? Recipe? Taste? Tariffs?

If I’m drinking the Corona, Peroni or whichever locally made import, based on image and fitting in with my mates, then I’m less likely to care about where it’s made because it’s the badge/brand that’s important.

If I’m drinking it because I specifically like the taste, I would need to be assured that the recipe was the same and that the overall taste/quality hasn’t changed. There is a small – but growing – portion of (craft) beer appreciators who understand the impact of raw ingredients (particularly water and hops sources) on a beer, where water (and hops) are the beer equivalent of ‘terroir’ in wine. These are the guys who are most likely to decry locally made imports on the grounds of ‘inauthenticity’. So the question here is around how important is the recipe vs the point of origin?

If I’m buying it based on price, I would need to understand that the quality/taste was the same in order to justify the same price point as a fully imported version (because I know that fully imported versions carry tariffs in their pricing). I would probably expect a small discount on a locally made version vs the import, the discount differential being the expected level of import tariff.

So from the shopper’s point of view, unless it’s specifically brought to their attention, it feels like a lot of them wouldn’t look at the labels closely enough to judge. And if it were brought to their attention, there are 1 or 2 groups of shoppers and consumers who would care (based on price and perceived taste changes) and probably another 1 or 2 consumer groups who wouldn’t.

For me personally, the question is more one around ethics and legalities of pack claims … what is being disclosed and what isn’t. There need to be some quite clear labelling codes around ‘product of/made in’ vs ‘imported and distributed by’ vs ‘bottled by’. Ie where the beer has come from vs where the bottle packaging/labels came from.

Currently the labelling can be quite confusing. I was in a Vintage Cellars the other day and their Corona said ‘Product of Mexico’ on the front, ‘Imported and Distributed By Fosters NZ’ on the back, but the labelling had the NZ standard drinks logo on it, so it was obviously at least labelled in NZ. So was it actually made in Mexico, but labelled in NZ? I know it sounds like labelling for dummies, but something like ‘beer made and bottled in Mexico, labelled in NZ’ would be clearer.

Even if the locally produced versions of the bigger ‘imported’ brands start to eclipse the sales of the fully imported versions of those same brands, there are still enough other imported brands/labels  – and a growing craft beer and microbrew market – to ensure ongoing variety.

Global companies have been making locally produced versions of their brands and products (think Kit Kat, Coca-Cola, Mars Bar et al), often tailored to local palates and tastebuds, for years.

The idea isn’t new.  It just needs to be clearly disclosed on the product – for those who care enough to actually read the label!

The word Whisky, with or without the e, confuses people. So at risk of being technically incorrect I’m going to refer to American whiskeys such as Jim Beam and Jack Daniels as ‘Bourbon’ and Scotch whiskies as Scotch.

WHAT’S GOING ON

Within whisk(e)y globally, Jack Daniel’s has just overtaken Johnny Walker Red Label as the world’s number 1. There’s also a global trend back to Irish whisky due to its smoothness.

Australia is the world’s second largest Bourbon market, although until very recently Bourbon ran a close second to Scotch as Australia’s largest spirit (this indicates just how much Scotch we drink!) and is now poised to take pole position.

However, Bourbon is growing in Australia, where Scotch has remained relatively flat. There has been a shift into more premium Bourbons, with consumers trading up.

10% of adult Australians have consumed Scotch or Irish whisky in the past 4 weeks, with a shift out of onpremise and into offpremise consumption in line with the broader GFC trends and smoking laws impacting the onpremise in 2009.

The above would all broadly indicate that since alcohol’s share of total beverage throat is relatively flat, Bourbon is starting to cannibalise Scotch and Scotch will need to shore up its relevance to retain its share of ‘spirit throat’.

WHO’S DRINKING WHAT & WHY

Bourbon vs Scotch
Bourbon skews younger than Scotch due to its smoother palate, sweeter taste and therefore easier drinking nature. Scotch is a more challenging taste profile better suited to more mature palates. Drinking repertoires are largely set by the age of 30, so you’ve got to get at them before then. So the question is, how do you introduce consumers to Scotch to it earlier?

Blended Scotches, and particularly Irish whiskeys, have an opportunity to promote their smoothness (as opposed to sweetness) to compete with Bourbons.

In the way that you start out with a sweet tooth as a kid and your palate becomes more savoury as an adult, in theory you’d think that people might start with Bourbon and as they age, shift into Scotch.
However, Bourbon drinkers tend to stick with it … they become brand and category loyal. How can you get Bourbon drinkers to try Scotch and Irish whiskies, and is it in your interests to do so?
A lot of Scotch drinkers start with Scotch because they’re introduced to it by someone. They’re more open to variety and trying a range of tastes than are Bourbon drinkers. This means you have an opportunity to cross sell (‘if you like this, you’ll also like …’) and create experimentation via tastings and pick & mix small pack sizes.

RTDs vs Full Strength Bottle Spirits (FSBS)

According to Roy Morgan’s Alcoholic Beverages Map October 2009, 70% of dark bottle spirits drinkers are 35yo+ (driven by Scotch and Brandy) where over 50% of RTD volume is consumed by under 35s.  Whilst on the face of it it would be easy to generalise and say ‘FSBS skews older and RTD skews younger’, this also means that there is at least 1/3 of consumers crossing over between FSBS and RTD dark spirits, which was exacerbated by the RTD excise when consumers discovered it was cheaper to ‘free pour’ from FSBS.

Scotch RTDs in particular suffered under the excise and now underindex in RTDs.

Because they have a mixer such as Cola or dry ginger, RTDs are a smoother, easier, less challenging drink than their full strength bottled spirit (FSBS) cousins and a natural ‘way in’ to spirits.

RTDs make consuming Scotch less challenging. Scotch RTDs are a means of entering the category and building relevance for 18-24yos – trade up into bottled Scotch (particularly blends).

You can encourage this uptrade from RTD to FSBS by bundling them together.

WHAT THIS MEANS – SOME OPPORTUNITIES TO LEVERAGE

Taken all together, the preceding facts indicate to me that the various whisk(e)ys play the following roles and have the following broad opportunities:
Bourbon:      Volume/AWOP and uptrade
Scotch:     Trial
Irish whisky:     Awareness as an alternative.

Onpremise Opportunities
* Scotch: Encourage trial by using it as a cocktail base as a method of introduction and to underscore its mixability. Hold Scotch tasting nights to introduce Scotch and encourage experimentation. Run ambassador programs (member get member type stuff). Drinks lists featuring different Scotches and what they can be mixed with … versions of the Diageo ‘Journey of Taste’ Scotch education program, held on your premises
* Irish Whisky: Run sampling programs for Irish whisky to drive awareness of ranging and characteristics.
* Bourbon: Promote by providing incentive to uptrade/upgrade, eg ‘for an extra $1 try Jim Beam Black Label’. Provide education on how premium Bourbons should be consumed (ie straight or with a mixer) via drinks lists and table talkers.

Offpremise
* Scotch: Pick & Mix small bottle mixed packs/boxes to encourage trial and repertoire building (like with imported and craft beers). Tastings supporting promotions of specific brands. Promotions and tastings days bundling similar scotches eg all Highland Single Malts, or all blends.
* Irish Whisky: tastings and samplings.
* Bourbon: Promotion mechanics encouraging uptrade (eg ‘for an extra $9.99 get Jim Beam Black Label) or bundle mainstream with premium Bourbons (either smaller or larger pack sizes). Run tastings and samplings of premium Bourbons with supporting price promotion.

That’s a few basic ideas for starters, anyway. In developing your promotional activities if you work from the principle that Bourbon is uptrade and volume, Scotch is trial and experimentation (using blends and RTDs as entry points) and Irish whisky is awareness, you can’t really go too far wrong.

Ian Kingham’s mini-tasting of low carb beers got me thinking about how to drive shopper exploration of low carb beers, where they should go in the fridge and thus about beer fridge layouts more broadly.

Sure the beer fridge layouts should be laid out in a way that makes sense for shoppers, but can you use the layout to get active uptrade or even impulse?

Below are some thoughts on different ways to lay out the beer fridges in a bottleshop, and their pros and cons.

How shoppers shop fridges

It will vary a bit by store layout and the angle/direction from which they approach the fridges, but generally shoppers tend to ‘read’ fridge doors like they read a newspaper. That is, diagonally from top left to bottom right, a bit like the below.

This means that there are some dead spots in the fridge, generally the bottom left and the top right.
However, this is mitigated a little because shoppers will generally look a little to the right of their intended purchase (rather than to the left). So when launching new products, in order to be seen they should generally go slightly to the right of the biggest selling or destination products.

Shoppers spend most time in front of or browsing the middle to right hand side fridge doors.  Assuming a 6 door and 6 shelf layout, the most heavily browsed shelf and door areas looks like the below.

Conventional wisdom would have it that shelf 2 – the ‘eye level’ (‘buy level’) shelf – is the key shelf but as seen in the above there are actually a number of ‘pole’ positions.

So the question is, do you put your destination products (eg VB longnecks, top selling domestic premium 6 packs) in the most browsed space, use it to try to turn around a declining category segment, or do you use the most browsed space to introduce new products, for fastest growing category segments or to get tradeup?

Do you:
a) go with what’s easiest for the shopper or
b) what might get you a better sales result?

In our view it’s b). An example is mainstream longneck beers. Shoppers of these destination products will find them in the fridge regardless of where you put them (generally the bottom two shelves). They don’t need to occupy the primary browse zone as these types of destination products aren’t browsed anyway.

Beer Category Segmentation, Flow & Adjacency Options

Let’s assume for simplicity that the beer category has six segments from the shopper’s point of view:
* Mid Strength (including Light)
* Low Carb
* Mainstream domestic heavy
* Domestic premiums
* Craft
* Imported.

(Dark and flavoured beers would sit in their appropriate segment eg Guinness in Imported).

There are a number of ways to look at how to group the segments, but the main ones are probably:
* By potency/ABV: but there’s not much ABV difference among Mainstream, Domestic Premium beers and many Craft and Imports have roughly the same ABVs as Mainstream beers
* By ‘premiumness’: where Mid and Mainstream beers sit together, Low Carb and Domestic Premium sit together, and Imported/Craft sit together
* By brand or supplier: which generally makes the least sense to shoppers unless it’s a sparse category with only a few brands in it. Again brand blocking may make sense for destination purchase items and for shoppers rusted onto a specific brand (the minority), but the reality is most beer shoppers have a repertoire.

Let’s look at how these options might play out in fridge door layouts.

We’ll assume for simplicity that there are 6 doors each with 6 shelves and that each door is a category segment (eg each segment has equal sales and therefore equal space). Each door contains a combination of pack sizes (stubby singles, longnecks, 6 packs) rather than there being longneck-specific or stubby-specific doors. It won’t be this neat in real life obviously, but you’ve got to start somewhere.

Layout by Potency/ABV

Assumes that Low Carb has the lowest perceived abv and that craft beers have the highest perceived abvs.

This layout puts Low Carb at a disadvantage because Door 1 traditionally has least browse traffic (depending on direction of store traffic flow).

Layout by Perceived Premiumness

Assumes that Craft beers are perceived to be more premium than Importeds due to their specialised nature. If this layout were by origin then the Craft and Imported doors would be swapped around.

There may be some conjecture around whether Low Carbs are perceived to be more premium than Domestic Premiums, but if your goal were to increase your sales of Low Carbs you’d run with it in Door 4 rather than Door 3.

Ultimately in determining your beer fridge layout you need to figure out which products you want shoppers to trade up to, and then layout out those products/segments in the middle and to the right in the planogram.

Having trawled a number of chain, banner group and independent bottleshops recently looking at Cider, it seems to me that Cider is currently a bit of a confused teenager. That is, in a growth spurt but a bit all over the place … in its targeting, positioning and instore execution.

Here’s my two cents’ worth on how instore execution could improve to assist the cider category to ‘grow up’ and thus increase sales.

Who is it for?

Empirical evidence (people observed drinking in pubs) combined with cider product formats (stubbies not cans) and packaging that echoes premium beer cues, would suggest that it’s an alternative to or substitute for beer for guys.

There’s also been a shift into premium cider products like the shift to premium and imported beers. Premium-positioned cider product manufacturers such as Pipsqueak and Mercury Artisan have a stated intention to get cider into beer drinkers’ repertoires.

The cider production process is not dissimilar to beer, potentially strengthening the case for ‘beer substitute’. But how many punters would actually know what the cider production process is, or care?

On the other hand, the RTD tax excise in 2008 is partially behind the manufacturers’ focus on cider innovation, with cider seen by the industry as an alternative to RTD – for girls as well as guys.

The nett result is that it’s not clear who cider is targeting, because the some of the industry isn’t clear on it themselves, and most are trying to have an each way bet.

For my money I reckon we’re missing a trick here … there’s an opportunity to target more sophisticated women who want to portion control but don’t want teenager ‘lolly waters’ and ‘pink drinks’. And potentially to communicate some ‘healthier’ positioning benefits on pack and at shelf as well, as a point of difference against RTDs/capitalise on the Blonde trend in beer.

And if cider is being positioned as a beer substitute or alternative then it needs to be clearly communicated as such. Which brings me to …

What occasions is it targeting?

Why would one drink a cider instead of a beer or an RTD (or a wine for that matter?)
What occasions are we talking to here? Eg:
* Refreshing alternative to beer
* Sophisticated alternative to RTD
* Portion control … know how much you’re drinking
* Palate cleanser
* First drink of the evening, ‘light start’ before moving on to ‘heavier stuff’
* Last drink of the evening, ‘finish light’
* It’s a bit different ,and something old/authentic that’s new again
* Great with food (is it? Pairing with food is traditional wine, and lately premium beer territory … what types of foods?)
* Party alternative – something a bit different to offer guests
… etc.

Part of the issue is shoppers in the offpremise and consumers in the onpremise don’t know when to choose a cider, because we haven’t told them.

As an industry we need to pick a couple of the key occasions for cider and communicate the hell out of them.

This has side benefits for bundling in the offpremise ie for stock up or top up beer shops there might be a cider offer promoting the occasion eg “Great for parties! Cider pack for $12 with any case beer purchase” etc.

Where should it go instore?

For the near dozen stores I visited looking at ciders, the range was quite small, only between 1 and 3 products … when I could find them. I had to ask if cider was stocked in a number of cases because I couldn’t find it in the fridge or in the coolroom.

Since around 85% of premixes and single/small pack beers are purchased cold for immediate consumption, cider needs to be in the fridge. Preferably adjacent to a dominant category so it’s seen.

It’s not enough to just range it in the coolroom (with no fridge or shelf presence), like in a few chain outlets I visited. For shoppers, can’t find it = store doesn’t have it. And shoppers are not going to run around the store looking for it. Cider’s got to be in the fridge to be seen.

You would do additional coolroom execution if you have excess stock and/or you’re targeting beer shoppers. Otherwise, excess stock goes on the floor supporting promotions or on shelf. But the fridge is where the vast majority of the action is.

Where should it go in the fridge?

Ciders have traditionally been made by the brewers, a tradition continued with newer releases like Tooheys 5 seeds. This has led to ciders being ranged next to or part of beer fridge doors (6 packs, singles, longnecks) in bottleshops.

However I saw it located within RTD in several outlets.

If we’re going continuing to attempt to have the best of both worlds, in utopia executions cider would be located between the beer and the RTD in fridge. And ideally the last door of beers before the ciders would be premiums and imports, or potentially Blonde beers (but not mainstream lagers).

If cider category sales and growth figures justify it, the cider category should get its own door in the fridge (yes this may mean it’s slightly overfaced) so it’s clearly delineated vs beer and RTD.

On shelf (ambient), cider ideally would be executed as per fridge for consistency. Ie between beer and RTDs.

Basically, cider needs to be more visible, found in the same place in the fridge instore, more of the time, and clearly communicated who it’s for and why buy it.

-  By ShopAbility for Drinks Magazine 2009.

The growth of microbrews in Australia mirrors (but currently trails) that of the USA and Canada, and in driving around the USA at the time of writing there are some things we could learn from this market to optimise craft beer sales.

Availability & Specialisation

In the offpremise, Canada has offprem beer specialty stores called the Beer Store in the way that in Australia we have Vintage Cellars and a number of wine specialist retailers. In the USA, from a sample of several dozen independent bottleshops and chain big box outlets over the past few weeks, to date all have had at least 25% of their cold single bottle fridge space devoted to craft beers (ie 1 door in 4) and at least 20% of beer shelf/floorspace is devoted to craft beer ‘bombers’ (600-750ml single bottles) and six packs.

In the onpremise in the USA beer dominates, with craft beers predominant at ‘brewpubs’. These are sort of like our ‘gastropubs’ … the  Local Taphouses in Melbourne and Sydney would be the closest approximation but these don’t really have the accompanying food offer.  US brewpubs often brew their beer in house on the premises, as well as range other craft beer brands, and are as much a food as beverage destination.

The Yardhouse concept, a highly successful and fast growing chain of brewpubs with some 30 locations across the US, takes the concept a step further by ranging between 100 and 250 craft beers on tap. Its beer list is divided into both styles and regions, much like a wine list.  The Australian market is on the verge of being ready for a similar concept.

It’s not just about Belgian Beer Cafes

For the past several years there has been a growing ‘beers of the world’ experimentation trend in the offpremise in Australia – consumers trying at home or taking to social events single bottles, pick’n’mix and 6 packs of lesser known brews.

Given that the role of many onpremise venues (aside from suburban ‘locals’) is one of experimentation and providing an experience and products distinct from those consumed at home, the time is nigh for Australian onpremise venue owners to consider role of craft beer and microbrews in their offer.

Contemporary metro and suburban pubs should consider ranging craft beers, as should wine/cocktail bars and restaurants of any calibre. Ultimately in restaurants the beer selection should be part of the sommelier’s job when compiling the wine list and consider more than the usual cursory nod to the products of the 3 ‘big boys’.

From a logistical standpoint, based on tap availability or lack thereof due to exclusivity contracts, the easiest way to go here – if you can make the numbers work – is with bottled craft beers. This way you can also rotate them frequently without capital expense of pythons, kegs etc.

Craft beer consumers are highly involved in the category.  Many post comments on websites like Beer Advocate and subscribe to magazines like Beer & Brewer. They’re on the hunt for the obscure and the lesser known. Little Creatures and Beez Neez are old hat to these guys.  Venues have an opportunity to drive traffic and frequency by ranging lesser known beers, rotating them frequently and providing seasonal beers.

Guys (and they are guys, and mostly in their mid 20s to early 40s) who are into craft beers are opinion leaders and will spread the word when they find something new, interesting or hard to find, thus providing word of mouth for your venue.

Visible availability in venue is paramount. Taps, fridges, small back of bar displays (not too ostentatious … can’t look like a ‘big’ beer brand), counter cards and table activation (interactive coasters or similar) all need to be executed. As well as the ‘beer list’.

That’s my initial two cents’ worth. I believe we have a real opportunity to expand the average Aussie male’s beer repertoire, profitably, based on what I’ve seen here in the US.

‘Hop’ to it!

By Norrelle Goldring of ShopAbility for Drinks Magazine

Lately I’ve been seeing a lot of commercial, substandard, wishy-washy wines on lists in pubs and restaurants, where it’s obvious the range is based on whichever supplier threw the most money to provide and produce the list.

Equally, I’ve been seeing some really interesting things starting to pop up on well-thought out lists.

This got me thinking about what to do if you’re a small establishment who wants to provide a quality wine offer to your patrons, but you don’t want to carry heaps of inventory.

How do you decide which wines to range?

The easiest way to keep your wine list tight, yet jam packed with quality, is to cherry pick wine varieties from the regions that express them best. Wines with best varietal expression from that region in theory equal best quality for the money.

Which varieties?  The obvious, must-cover bases would be:
Whites:     sauvignon blanc and pinot grigio for unwooded, chardonnay for wooded (but go easy)
Reds:     shiraz, merlot
Easy drinking/’occasion’ wines:     sparkling white, rose

The ‘should have’ varieties would include at least a couple of blends – a semillon sauvignon blanc white blend, and a red blend like a shiraz/cabernet, cabernet merlot, or gsm (grenache shiraz mourvedre). You would also range one type of aromatic white (riesling, gewurztraminer), one ‘other white varietal’ such as a semillon or a verdelho, and for the reds a pinot noir and a cabernet sauvignon.

The ‘could haves’, if you wanted to extend to that, would be lesser known varieties – interesting Italian and Spanish things like albarinos, vermentinos and verdejos, or regional specialties like Rutherglen durif or Barossa/McLaren Grenache.

Which Australian and NZ regions are the best/most known expressions of these varieties then?  For my money, these are:

WHITES
Sauvignon Blanc:   Marlborough, Adelaide Hills
Pinot Grigio:   Adelaide Hills, Mornington Peninsula, Gibbston Valley
Chardonnay:   Hawkes Bay, Yarra Valley, Eden Valley, Margaret River
Semillon:   Hunter Valley, Margaret River
Riesling:   Clare Valley, Mt Barker/Great Southern
Verdelho:   Margaret River (again!); Swan Valley, Hunter Valley, and Sth East Queensland
Sem Sauv blends:   Margaret River (signature blend)
Sparkling whites:   Tamar Valley/Tassie all the way … anything cool climate

REDS
Shiraz:   Barossa Valley, McLaren Vale
Merlot:   Yarra Valley
Pinot Noir:   Adelaide Hills, Martinborough/Wairarapa, Central Otago, Mornington Peninsula
Cabernet:   Coonawarra, Margaret River
Grenache:   Barossa Valley, McLaren Vale

This doesn’t mean your list can’t be interesting. You can range wines from emerging regions on small list, as long as the ‘best region for the variety’ rule applies. That is, you are clear on what some of the emerging or lesser known regions are known for. Eg the King Valley in Vic is known for its interesting Italian origin varieties, things like saperavi, cortese, arneis. Orange is becoming known for its cool climate sauvignon blanc. Cowra is big on chardonnay.

So the message is don’t bastardise a good list with a crappy wine unsuited to the region. What is the point of a Hunter Valley Sauvignon Blanc (all hot air and no acid or herbal characters) when there are regions that do it so much better?

Right variety from the right place wins every time.

For Drinks Magazine, May  2009, by Norrelle Goldring of ShopAbility

As independent bottleshops wring their hands about trying to match the low price points of the big boys to bring in traffic, they are missing some easy additional sales from their existing customers.

This was demonstrated yet again to me recently when I visited one of my locals to replenish my gin, scotch and vodka stocks after a party. I placed my three spirits bottles on the counter, at which point the staff member simply picked them up and started scanning them.  What’s missing from this scene?

Unsurprisingly, I was not asked whether I would like a Tonic Water to go with the gin, a Coke for the scotch or any number of flavoured drinks that could go with the vodka. In fact, I had to ask where they were (not obviously displayed), by which time the transaction was already going through EFTPOS and the staff member clearly considered it all too hard.

Yet, margins and profits on sundries in bottleshops are often better than mainstream case beer. You could be increasing your average transaction value by around $5. Go figure.

Most service stations you go to, even if staffed by a pimply fifteen-year-old, try to sell you mints at ‘2 for the price of one’ or upsell your bag of chips from a small to a large for ‘just 30c more’. OK they sometimes get the execution wrong, since they tend to ask AFTER your EFTPOS transaction is going through, but at least they ask. I can’t remember the last time a bottle shop did it.

The size of this missed opportunity is underscored when you understand that around two thirds of bottle shop ‘baskets’ are single item baskets. That means two thirds of shoppers are leaving with the one thing (1 case of beer, 1 bottle of wine etc) they came in for, and nothing else.

Because nobody is offering them anything else!

So, how can bottle shops optimise the incremental sales opportunity?

Bundle and cross-promote in-store
1. How can the store be optimised for ‘this goes with that’ purchases? Does your softdrink fridge need to be located next to or in the spirits shelves? Or better yet, at the counter?
2. Is your counter area laid out to encourage impulse purchases? Are your chips, chocolate, nuts, dips, flowers and any other impulse items located clearly at or near the counter? Are they promoted effectively either via price or another compelling message (such as the occasion … ‘off to dinner? Try these …’) ? Could you range DVDs as impulse for ‘quiet nights in’?
3. How are you communicating ‘this goes with that’ instore? Do you need to call out your sundry offers more clearly through at-shelf signage and promotions in relevant beverage categories?

Get staff involved and measure them
OK there will always be staff turnover, but there are some simple processes you can put in place to optimise incremental sales regardless of the calibre and number of store staff:
1. Set a standardised script and set of offers for how staff are supposed to cross-promote and encourage additional item purchase. For starters, they should be asking ‘would you like an X with that’ for any categories that obviously go together, like Spirits and mixers, beer and chips, red wine and chocolate, white wine and cheese / dips / nuts etc. They can also ask ‘would you like a Coke with that’ for pretty much anything. Another way is to identify the shopper occasion and upsell based on that. ‘Doing something special tonight?’ may receive an ‘out to dinner at a friend’s’ response from the customer, at which point staff can point out the promotions on chocolates, flowers and pre-dinner snack s etc.
2. Measure items per transaction, and make number of units per transaction a key KPI for sales staff, management and whole of store(set an average target higher than 1, for example average 1.65 units per transaction, meaning the majority of shoppers buy two items)
3. If you’re really keen, measure staff and management performance against average unit sales by engaging mystery shoppers.

Time to pick up the game on incremental sales, bottle shop folk! The wins are too easy for excuse making. Next time I buy gin I expect to be actively sold a Tonic!

For Drinks Magazine by Norrelle Goldring, Director – ShopAbility 

I don’t know about you, but I’m over sauvignon blanc already – and it’s only just recently knocked chardonnay off the most-drunk-wine-in-Australia list.

One of the grape variety’s strengths, when made in its Marlborough form by our friends over the pond, is its consistent high quality and similar flavour spectrums. Unfortunately this also makes it boring over time. A bit like Barossa shiraz, it’s comforting because you know what you’re going to get – but after a while you start to look for something a bit different.

Which brings me to the role of wine lists in the onpremise.

One of the top drivers for patrons visiting onpremise venues is the promise of a different experience from that which they get at home, or trying products they can’t get from their bottleshop. The onpremise plays a strong role in trial and experimentation. And at a time when onpremise traffic is down because people are going out less, you need to provide a strong reason to visit your venue.

But how many venues exploit this need for discovery?

It’s pretty easy to do without frightening the local natives.

Say you have a wine-by-the-glass list on tables and bars that has 2 sparklings, 6 whites and 6 reds.

Of the whites, 1-2 would be sauvignon blanc, 1 chardonnay, 1 pinot grigio (the fastest growing white grape variety) and 2-3 others covering regions and varieties, eg a Margaret River SSB, a Clare or Eden riesling, and maybe either a crowd pleasing moscato or an interesting smaller variety like viognier or albarino.

The smaller ‘discovery’ varieties should be supported with some simple information on/near the list about what it tastes like and what it goes with food-wise. If you really wanted to amp up the discovery and promotional factor, you might lean on the wine supplier for promotional teams to visit a couple of times to encourage sampling of the newer or lesser known wines.  Or you might try having a additional, rotating wine of the month every month that focuses on the smaller varieties or lesser known regions.

Products on the wine list should be changed out a couple of times a year to give the regulars something to look forward to. Yes they like their old favourites, but they also look for what you’re doing that’s new, different and interesting.

By ranging some different brands in the onpremise from those that can be found in the offpremise, it’s also harder for patrons to make a direct price comparison with what they’d pay in the bottleshop, and your perceived value remains intact without you having to drop your strides or your glass wine prices.

It’s a balancing act – cover off the major crowd-pleaser bases, yes, but range products and experiences that provide an element of discovery, surprise, delight – that will keep them coming back.

Variety is the spice of life – more spice please!

Why zagging when the others zig will help you maintain traffic and profit in economic downturns

So we’re in an economic downturn, and shoppers are consolidating their shopping trips and becoming more value conscious. The good news is that alcohol purchasing remains fairly constant throughout economic peaks and troughs, so you don’t need to panic. Here are some thoughts on ways you can further minimise the impact of the current economic situation, without dropping your profit trousers.

Provide Perceptions of Good Value

‘Value conscious’ doesn’t necessarily mean shoppers change stores just to find the lowest price.  It’s unlikely you’ll be able to compete with the big guys direct on price anyway, as they have more buying power. And discounting heavily won’t necessarily bring more shoppers to your store as the number one reason people choose a specific store is convenience (location). All you’ll do is trade them down further, at a loss of margin to you.

What you need to provide shoppers with is a perception of good value, which can mean a number of things from the shopper’s perspective other than just the cheapest price:

• I got a good range of items for the total price that I paid (total basket spend)
• It’s in the price RANGE that I expect
• I got an unexpected bonus/gift/product/larger size for the same approximate spend
• It was a good use of my time (I learnt something; they treated me well; I got special service).

A number of these actually enable you to increase your average weight of purchase (AWOP), which leads me to .

Increase AWOP

Most alcohol categories have expandable consumption (that is, if they buy more, they consume more). This means that you can increase average weight of purchase without simply pulling sales forward or decreasing repeat visit frequency.

In addition, two-thirds of bottleshop ‘baskets’ are single item baskets – shoppers are leaving with the one thing they came in for, and not being suggestively sold to or buying on impulse.

There are a number of ways to increase average weight of purchase, the following is a selection:

• Multibuy and pick’n’mix type promotions
• Providing and communicating the saving when shoppers trade up to a case from a single bottle or 6 pack
• Promotions where the shopper gets more for the same (or marginally higher) dollars eg bonus packs, intermediate sizes, 20% free
• Train your staff in incremental sell, eg to ask something like ‘would you like a mineral water or a Coke with that’ (particularly with wine and dark spirits purchases respectively)
• Train staff to upsell, eg into a slightly more expensive product (particularly wine, where brands play less of a role than they do in beer) or into a bigger pack size
• Placement of sundries such as Coke and chips next to the checkout (considering you probably make more $ profit from a large bottle of Coke than you do from an on-promotion case of regular beer).
• Increasing repertoire/discovery within a price point (service)
• Accessible high end brands for gifting.

Maintain Traffic by providing reasons to visit you

As shoppers reduce their number of trip types, retailers are moving from competing for shoppers to competing for shopping trips. You need to understand the reasons why shoppers visit your store (what your retail point of difference is, and what occasions they are buying for) and play to those to provide reasons to visit, and repeat visit.
Get your positioning and range right
What’s your retail point of difference? What are you known for? You’re not going to be able to outgun the big guys on price so you need another differentiator.  Shoppers choose bottleshops based on convenience/location (close to work or home), good value (as discussed above), good range, and service in that order.

Whilst you may not be able to control your location, you can control what you range. Shoppers expect to be able to find what they want so ranging the biggest and best known brands is the starting point. From there you need to cover off a selected range within each category segment and across price points. But you can be known for a good range without having thousands of skus in the store (which serves to confuse rather than energise shoppers). Bear in mind that in beer around 60 skus make up 80% of the sales, in white wine it’s around 140 skus making 80% of sales and red wine it’s about 180 skus for 80%. In other words for beer and wine you can less than 400 skus in the store will be 80% of your sales.
Occasion occasion occasion
By communicating a range of occasions instore you provide shoppers with a reason to make you their one stop shop. Example occasions include ‘entertaining’ , ‘bbq’, ‘everyday quaffers’, ‘party’ , ‘dinner’ , ‘footy finals’ and ‘having friends over’. These occasions can be communicated on both point of sale and by arranging cross-category floor displays by occasion eg a BBQ Zone or a Party Zone, for instance.

Give them reasons to come back

• Do you provide reasons for shoppers to come back to visit you?
• Do you have a loyalty program? Or at least offers encouraging repeat purchase. Gloria Jeans and Baker’s Delight do this well with their cards and stamps.
• Create traffic by hold events, demonstrations, and tastings. Provide theatre and interactivity.
• Promote discovery and by providing and communicating what’s new. Could you do a ‘new releases’ area, or ‘Top 10’ at the front of the store, like music stores do?

By providing a reason to visit, a reason to come back, good range, good value and a good instore experience you will optimise your ability to weather economic storms.