Ron James, director of beer, wine and spirits at Buehler’s Fresh Foods, tried a major reset of his beer department earlier this year at one of the grocery chain’s Wooster, Ohio, locations. The change—organizing beers by style rather than by brand—has been so successful that James is now implementing it at all 15 Buehler’s stores in Ohio, a transition that’s expected to be completed this month.
The initiative involves resetting beer shelves into groupings like IPAs, porters, stouts and Belgian ales. “It’s a huge move,” James says. “But customer response has been good. Our hardcore craft beer drinkers shop by style, so this is a big help to them.”
Buehler’s isn’t alone among retail outlets that are parting ways with the customary approach to shelf sets in favor of a technique more commonly applied to wine layouts. The tactic is controversial—largely decried by beer marketers, distributors and beer retail experts, who say the practice is time-consuming for those setting the shelves, confusing to consumers and harmful for brand building.
Total Wine & More was an early adoptee of beer style sets. The multistate retail chain began testing the practice for single bottles at its Chantilly, Virginia, store in 2008. Sales of beer singles at the site jumped 29 percent in the first week, says new programs manager for customer experience Rob Hill, and the initiative has started rolling out to other locations. The Potomac, Maryland–based company, which operates 121 stores and counting, has been setting beer by style for single bottles only—not multipacks—at all new and remodeled stores since 2010. “Singles are about discovery, exploring and trying new things,” Hill explains, and the shelf-set approach encourages customers to peruse options within a given style and create their own six-packs. Total Wine offers 16 different style groupings, including wheat, porter, stout and IPA, the last of which is the largest section. Beer singles are largely organized alphabetically within each style setting. The Concord, California–based chain BevMo, which has 157 units across California, Washington and Arizona, is also moving toward a beer-style layout.
At Buehler’s, meanwhile, the new organization method is being implemented throughout the beer department, with just a few exceptions. Major mainstream brands and leading crafts continue to be merchandised as in the past, and the cold box will remain unchanged. The style set pertains to “upper-end, specialty beers,” James notes, pointing to labels from Dogfish Head Craft Brewery, Stone Brewing Co. and Founders Brewing Co. in all packaging configurations. He says the initiative is an effort to “make the stores more uniform in layout,” as compared to the grocery store’s other departments like wine that are formatted by style. “This organization makes sense and helps increase customer loyalty as it provides a better shopping experience,” James adds. “The change also gives us an edge over our competitors.”
Specialty beer retailers are also seeing the merits of setting beer shelves by style. Knoxville, Tennessee–based craft beer store The Casual Pint—which stocks between 400 and 1,000 offerings, priced at $9.59 to $9.99 a six-pack—divides its selection into about 15 categories. The nine-unit concept adheres to a style shelf set for six-packs, while singles don’t conform to a precise layout. Cofounder Nathan Robinette, who previously worked in the beer and wine department at the grocery chain Harris Teeter, adopted the technique after seeing the effectiveness of a wine selection organized by varietal and country of origin. “A style set for beer is convenient for shoppers,” he explains.
Hop City, which has two bottle shops in Atlanta and one in Birmingham, Alabama, has arranged its shelves by beer style since launching in 2009. “Response from our customers has been extremely positive,” says owner Kraig Torres. But like other retailers who’ve implemented style sets, he notes that beer marketers and distributors initially weren’t supportive. “At first the breweries were reluctant, as they were used to the billboard approach,” Torres says. “But they’ve come around.” Hop City stocks about 1,900 beers, priced from $1.49 a 12-ounce single bottle of Sierra Nevada pale ale to $109.99 a 3-liter bottle of Chimay Blue.
Beer retailers who set at least some of their shelves by style say they implemented the practice with the shopper in mind. “Consumers are accustomed to choices and putting things in categories,” Total Wine’s Hill says, noting that beer’s traditional brand set may be somewhat outdated. “In the grocery store, you don’t find Heinz ketchup on the shelf next to Heinz relish.”
Retailers also say that a style set is convenient not only for shoppers, but for store staff. “As a beer fanatic myself, shopping by style is the way I want to shop,” says Torres of Hop City. “If I’m in the mood for an IPA, I want to head to the IPA section. If I want a Belgian ale, I want to browse in that section.” Robinette agrees, adding that the style set at The Casual Pint makes ordering product easier for store staff. “All we have to do is go to a particular style section to see where we’re running low,” he explains.
This type of organization also assists with education. “Beer shelves set by style help us to educate our customers,” Robinette says. “If a customer is looking for a recommendation on an IPA, for example, a staff member can walk them over to the IPA section and point out particular beers.” That approach applies to singles too. “Beer singles are the discovery area of the store,” he explains. “Organizing by style is a helpful educational tool for consumers.”
Despite these benefits, most beer executives don’t endorse the practice. Many believe that consumers are accustomed to shopping for beer by brand and that a focus on style can encourage trading down while harming brews that don’t conform to a particular style. “Products from the same brand family are designed to look good together,” explains Tim Gossett, vice president of category leadership at Anheuser-Busch InBev (A-B). “By splitting up the brands into styles, you may get a shelf that isn’t visually appealing, which can cause confusion and increase shopping time.” Bob Sullivan, vice president of specialty and craft brand building at Dallas-based beer wholesaler Andrews Distributing, says style sets could be “detrimental to the craft beer industry if brewers and distributors can’t build brands at retail.” Andrews represents a wide range of beer labels, including MillerCoors and 18 craft breweries.
Sullivan and Gossett also note that style sets place a spotlight on price disparity among brands within a particular category. “This strategy could potentially hurt retailer profitability due to shoppers trading down for a brand style that is less expensive and yields a lower margin,” Gossett explains. Sullivan points to a brand like Ballast Point’s Sculpin IPA, which is typically priced at $14.99 a six-pack. “If that brand were to be placed in a style set, it would stand out like a sore thumb,” he says. Moreover, Sullivan adds that style sets would likely contribute to higher labor costs for retailers and distributors, as workers would need to break down and reorganize beer deliveries by style before setting shelves.
Jessica Jones, chief marketing officer and director of strategy for the independent brewery partnership Enjoy Beer, is also concerned with the impact that organizing brews by style will have on craft beer. She says emerging local beers can get lost if placed in style sets, while hybrid brews that are hard to categorize can be a big challenge. “Where do you put Belgian IPAs?” she asks. “Chances are they get relegated to an ‘all other’ section and that arrangement can be a disservice.” Jones adds that sales of novelty or experimental beers could suffer, leading to a decrease in creativity among brewers.
Opponents of style sets cite tests that demonstrate the ramifications the practice can have on beer category sales. Bump Williams, principal at beverage alcohol consulting firm BWC Co., reports that a six-month test with six multimarket grocery chains in 2013 yielded an overall decline in beer sales, a significant slowing in craft beer trends and increased out-of-stock offerings. “Those out-of-stocks cost the retailers money,” he notes. Marty Maloney, manager of media relations at MillerCoors, meanwhile, says a style-set test that’s still in progress at a large regional grocery chain has shown test stores underperforming control stores. “Consumers feel more confused and actually buy less because the lack of brand blocking doesn’t allow for browsing or multiple purchases within a particular brand,” he says.
Maloney notes that the beer category is still driven by brands. “Consumers trust brands,” he says. “Their decision-making process is still heavily influenced by brands.” A-B’s Gossett adds that style sets make it more difficult for suppliers to showcase new innovations from an existing brand. As an alternative, he suggests that retailers create display racks that highlight a particular style or innovation. “This approach allows for exploration and ease of shopping,” Gossett explains.
On The Horizon
It’s unclear whether beer style sets will expand since most beer retailers continue to adhere to brand sets. Gossett doesn’t expect the practice to grow, but Hop City’s Torres disagrees. “It’s the golden age of brewing,” he says. “Consumers are interested in a variety of beers. This approach aids them in their search.”
Jones of Enjoy Beer says the fate of the practice could rest in the ongoing development of craft beer and its popular styles. If IPAs continue to be prominent, she believes more retailers could start organizing their IPAs into one section. But if local brews move to the forefront, the trend toward setting beer shelves by style could slow. Whatever happens down the road, the style-set approach by some beer retailers has generated lively discussion in the industry and shown that beer merchandising doesn’t have to be set in stone.