Walmart’s New Beer Focus

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You probably saw the news over the past year that Walmart was going to be focusing to a greater degree on the sale of beer in their stores. Advertising Age had an interest glimpse into their plans, entitled How Walmart Plans to Double Beer Sales In Three Years . At the recent NBWA annual convention in Las vegas last week, Walmart’s Chief Merchandising and Marketing Officer, Duncan MacNaughton, said he was “pleased but not satisfied” with their progress so far, adding that he feels Walmart is “still ‘under-shared’ in beer sales compared with competitors.”

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Does this Walmart beer display give some indication of their strategy to sell beer?

Apparently there’s currently an uneasy relationship with Walmart and beer wholesalers, which should surprise no one. Walmart is so big they’re used to getting their way and dictating whatever they want — some might say bullying — even if what they’re asking for is unreasonable or even not entirely on the same terms as everybody else enjoys.

Because they use “just-in-time” ordering systems, “their backrooms have no storage,” David Black, CEO of Northeast Sales Distributing, said in an interview. His company’s territory includes some 50 Walmarts in portions of Georgia and North Carolina. “They refuse the order or they make you sit there for three hours while they take something else.”

That’s something most, if not all, of the big chains do, of course, but Walmart has supposedly raised it to a fine art. Walmart also told the assembled beer distributors that they’re not considering a private label beer, which from their point of view is good news.

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A battleship of Walmart beer sales.

Curiously, MacNaughton also said this. “We don’t want cute displays. We want ‘shoppable’ displays: item and price and can I get a case off the top. Sometimes we kid ourselves with pretty. Pretty is fun, but I want sales.”

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A tank of Walmart beer.

A couple of months ago, Bloomberg covered this in Wal-Mart Stacking Beer in Aisles to Double Alcohol Sales, detailing more of their overall plans. For example, only about 3,700 of their nearly 11,000 stores currently stock beer, which is roughly one-third. In the short term they’ll be increasing that to around 5,000 stores (45%) and hope to eventually sell beer in as many as 6,600 locations, or 60% of their stores.

The Bloomberg report also included a video in which one of the talking heads mentions that while beer sales are relatively flat overall, it’s craft beer that’s selling well. Apparently they’ve also hired more buyers who will be focusing on more local beers, and “craft is playing into that in a big way,” apparently. But as the video later points out, the biggest customers by far are still the big players, and although the Boston Beer Co. is there, it’s dollar amount is far less than ABI, MolsconCoors or Heineken. Samuel Adams sells less than 4% of the beer that Budweiser does and 3.4% of the other three combined. So while they speculate that craft is the key to increasing sales, it doesn’t seem like that’s what they’re actually doing, though to be fair images of Walmart shelves do show a bit more diversity. I confess I don’t really shop our local Walmart, so I may have to check out the beer section from time to time to see if they really are changing their approach.

Beer Birthday: Don Gortemiller

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Today is the 61st birthday of Don Gortemiller, former brewmaster for Pacific Coast Brewing in Oakland, California. Don was making beer there since the very beginning, back in 1988, helping to put Oakland and the Bay Area on the beer map, but left recently under an odd set of circumstances, and is currently on the lookout for a new opportunity. Join me in wishing Don a very happy birthday.

Steve Wolfe & Don Gortemiller, a bit lighter
Pacific Coast founder Steve Wolfe with Don at their 2009 annual Holiday Beer Tasting.

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Don toasting with his beer.

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Bruce Joseph with Don at Anchor Brewing.

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Don rockin’ out as a young man.

Note: the last three photos purloined from Facebook.