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ST. LOUIS -- Despite fighting some negative perceptions during the past few years, beer remains a profitable category for convenience stores. In fact, recent data indicates that for every dollar retailers invest in beer, they will get back $8.30, according to Chris Williams, vice president of national sales at Anheuser-Busch. When looking at c-stores specifically, that number goes to $5 for every $1 invested.
If any company should know, it's Anheuser-Busch. The St. Louis-based brewer saw a "fantastic" 2012, based partly on the company's innovation and partly on above-normal temperatures, Williams said during a trade media open house held at the company's headquarters on Wednesday. He added that despite challenging external factors – unfavorable weather and the payroll tax -- during the first quarter of 2013, Anheuser-Busch is optimistic about this year and plans to build on that optimism in 2014.
Part of Anheuser-Busch's roadmap for success at retail is its balanced portfolio approach (BPA). This approach follows the rule that with a balanced approach, retailers can grow all segments of the beer category, according to Williams.
Moving into 2014, the brewer is rolling out an updated approach tailored specifically to retailers, called Your Balanced Portfolio Approach (YBPA). "The idea is to grow the entire category leveraging a customized balanced portfolio approach," said CJ Watson, vice president of category leadership at Anheuser-Busch.
In a recent analysis of approximately 330 retailers, the company found that retailers leveraging craft beer and premium beer together grew successfully more than 90 percent of the time, Watson explained, noting that segments aren't people and people shop multiple segments. For example, consumers who buy craft and import beer also spend a lot of money in the premium segment.
The YBPA takes the results of the company’s analysis and dives deeper into retailer economics by looking at channel, popular density, new retailer segmentation and beer space. Notably, the figures show there is an 80-percent correlation between beer revenue and population density, Watson reported.
In addition to further developing its relationships with retailers, Anheuser-Busch is changing up its trade marketing approach in 2014. According to Sanjiv Chhatwal, vice president of trade marketing at Anheuser-Busch, the company's 2014 game plan calls for prioritizing brand programming by channel. Budweiser and Bud Light are the No. 1 propriety, said Chhatwal.