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How a Mega Supermarket Drives Wine Sales

Competition from trendy hard seltzers and fast-growing spirits spurs innovations at Albertsons
by Jim Gordon
October 11, 2019

Napa, Calif. -- On the Fourth of July weekend this summer, the rise of White Claw became one of the five major events to impact retail wine sales in 35 years, according to the man in charge of beverage alcohol for the mega supermarket chain of Albertsons, Vons and Pavilions (AVP).

White Claw is a hard seltzer produced by Mark Anthony Brands from seltzer water, flavoring and an alcohol base of unspecified origin. But Phil Markert told the attendees at last week's Wine Industry Financial Symposium that the white-hot sales growth of this 5  alcohol beverage ranks up there in importance with four other famous markers in wine-sales history.

They are, he said: the varietal boom of 1984; Safeway stores' launch of a fine wine program in 1988 (in which Markert was instrumental); the French Paradox episode on "60 Minutes" in 1991; and the movie "Sideways" in 2004.

White Claw Passes Coors Light

What changed during the Independence Day holiday? Coors Light had been the top-selling beer brand for 30 years in AVP stores, which now number 342. But during that weekend of barbecues, picnics and fireworks, White Claw and competing seltzers including Truly accounted for seven of the 10 top-selling items, he said.

"White Claw was number one, two times more than Coors Light in our Pavilions stores, and it hasn't stopped since. This is, I think, the awakening of the Millennials and Generation Z," he said.

While the other events Markert cited triggered changes in particular categories of wine sales in the U.S., he didn't state any such direct result for White Claw. Hard or spiked seltzers have alcohol percentages similar to beer and many retailers display them alongside traditional beers.

Better-for-you Beer

White Claw is promoted as low carb, low calorie and gluten free, and he inferred that its significance to the wine business lies in what it reveals about consumers' tastes and their shopping behavior.

Hard seltzer goes in the "better-for-you beer" section at Markert's stores because of those traits, along with other beverages that boast low calories, low sugar, organic ingredients and low-alcohol content, including familiar names like Heineken Zero and Michelob Ultra but also kombucha.  The section blends the alcoholic beverage department together with healthier beer, wine and spirits displayed near each other along with single serve options. 

He added that spirits sales continue to be "on fire" at AVP stores. "Spirits is where most of the growth will come in the next 10 years," he predicted. "We are at the beginning of a generational shift in human behavior. We can't just do what we've always been doing; you'll get run over."

But all the success of beer and spirits in his stores doesn't mean they are not innovating in wine merchandising. In-store tastings, winemaker dinners, in-store fine wine cellars that stack Bordeaux first-growths in wooden cases and other new ways of displaying wine will be important in continuing to drive wine sales.

Last year AVP co-hosted 70 wine dinners, averaging over $4,000 in sales per event, and engaging more than 4,000 guests. One dinner with Caymus Vineyards of Napa Valley generated more than $20,000 in an evening, Markert said, and another wine dinner with Justin Vineyards & Winery of Paso resulted in $18,000.

AVA Sets and Single-serve Sections

Some AVP stores have started organizing AVA sets on their shelves, where all wines from a specific American Viticultural Area are displayed together instead of being spread out among the various varietals or wine-type sections. Paso Robles has its own set in some stores, Oregon and others do too. "My early read is that it's a win for consumers and my wine stewards," he said.

The "better for you" concept is applied to wine also, and includes no-alcohol wines such as Ariel and Sutter Home Fre. Markert thinks that "dry January" will be an even bigger event in 2020 and is preparing accordingly.

"We've got to get out of the mindset of beer, wine and spirits being separate, and we've got to focus on occasions instead," he said. For example, single-serve beverages in AVP locations are really catching on, he said. Alcohol beverages of all types that are packed in cans, cartons, aluminum bottles and Tetra Paks will be arranged to create a “single-serve set.”

Markert's Oct. 2 presentation was the closing keynote address at the Wine Industry Financial Symposium. The Culinary Institute of America at Copia in Napa, Calif., hosted the annual event this year for the first time. The symposium is one of eight produced by Wine Business Monthly.

Next up is the Innovation + Quality (IQ) conference and trade show on Feb. 27, 2020, at the Greystone campus of the Culinary Institute of America in St. Helena, Calif.

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