Dive Brief:
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A survey of 113 craft beer drinkers were asked to sample Wal-Mart's stealth private label craft beer line, Trouble Brewing, according to Supermarket News. Four out of 10 participants found the line "extremely appealing" or "very appealing," but only 12% of the group knew that the beer was produced by Wal-Mart.
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Half of the participants were told Trouble Brewing, whose packaging makes no reference to Wal-Mart, was a Wal-Mart brand after testing, and half were not. This drew mixed responses — consumers who knew of the private label rated the amber beer lower than those who didn't, but scored other varieties higher.
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Other brewers also have mixed opinions on whether Trouble Brewing's four beer varieties — Cat's Away India Pale Ale, After Party Pale Ale, Round Midnight Belgian White and Red Flag Amber — will encourage more activity in the craft beer sector.
Dive Insight:
Consumer demand for niche products and interest in craft beer have converged in recent years, especially among millennials. Women are drinking more craft beer; female consumers aged 21-34 account for 15% of craft beer sales last year, according to The Brewers Association. Younger shoppers are interested in new, trendy beverages, giving retailers a prime opportunity to leverage new private label beverage brands.
But what happens when consumers learn that their six-pack of "niche" craft beer is actually the secret product of a mega-retailer? For some shoppers, the spell is broken. As this survey suggests, a brand's purported independent status can be almost as important as its flavor to consumers. For others, it's not a big deal, as long as the product delivers the beverage experience they desire. Regardless, retailers continue to encroach on the craft beer segment.
Kroger's Tap Room 21, Walgreens' Big Flats 1901 and 7Eleven's Game Day are just a few of many examples of retailers' private label beer lines. Kroger in particular has a strong reputation as a big-time provider of craft beer, to the point customers can pick and choose which ones they want to sample. But are craft beers likely to take enough share or sales to justify the space given to them?
New, trendy products are always risky renters of shelf space, but craft beer, when done right, could be a valuable addition to grocer's private label portfolios.