Beer Displays and Brand Equity

You probably don’t notice it. It flies under the radar. The phenomenon of which I speak? The organization of the beer fridge in bottle shops.

To start this discussion, let’s examine the way wine is organized in most any given bottle shop or market. You walk in and you see shelf-talkers or hanging signs that all have a varietal on them. “Cabernet Sauvignon” is over here, “Pinot Noir” is over there, etc, etc, so on and so forth. Region and producer are most often ignored in favor of easy categorization.

The beer fridge however, tends to reveal a bit more variation. If you go to a supermarket, you’ll most often find a wall of two or three macrobrewer products (in many different packaging formats) that create the banner effect these companies covet in such retail outlets. What craft beer they carry tends to be organized by brewery. This of course applies only where they carry more than one beer from a given brewery.

Where we see a bit more variation is in bottle shops (those places whose focus is beer, wine and spirits). It is in these stores that the wine approach sometimes takes over the beer fridge. Rather than seeing all of a brewery’s product in one place, things get spread out by style. Tripels over here, IPA’s over there, Stouts all in one place, etc, etc, so on and so forth.

The question becomes, what to make of this? Having seen the brand-building power of social media in the craft beer world, I can’t help but worry a bit about the effect that organization by style may have. As far as wine goes, people tend to purchase by varietal, rather than by winemaker. In beer however, people still base their purchases heavily upon brewery.

If you enter a shop organized by style and want to buy a couple things from Ballast Point, you have to go to the IPA section to get Sculpin and the Porter section to get Black Marlin. Not good for the consumer, not good for the brewery. Obviously, if you’re looking to try a bunch of IPA, then its easier if the beer is organized by style, but I don’t believe such organization is good for craft brewers in the long term.

Organization by style completely destroys brand equity in the eyes and mind of the consumer. Rather than recognizing a bunch of beers from a given brewery, all the consumer sees is a bunch of Pale Ales. Breweries all have their own strengths and their own unique personalities. Many of them have used Social Media to let consumers get to know them, their philosophies and their personalities. They have spent a tremendous amount of time and resources defining themselves to the consumer.

Working in the beer industry, I find that more people ask what beers are available from “Brewery X” at a given time rather than what beers of a particular style are available. This is especially true at better beer bars, whose focus is a variety of style. You’re unlikely to find more than one Witbier or Porter on tap. However, customers consistently ask questions like, “What do you have from Stone?” or “What’s on tap from Russian River?” These and many other breweries have built a reputation for brewing excellent beer and customers will often drink whatever beer happens to be available from that brewery, regardless of style.

When bottle shops spread beer out by style, they degrade this brand equity and unknowingly move beer consumers into a frame of mind that mirrors wine consumers. Brand starts to matter less than style. Craft brewers and sellers of craft beer must be aware of this phenomenon and fight it. Craft brewers need to maintain brand equity. Sellers of craft beer must realize that they can leverage that equity to sell more beer. Put a brewery’s beer all in one place and you’ll sell more of that brewery’s beer. Do this for every brewery and the math does itself. You sell more beer and you create customers that are more loyal to a given brewery and a given bottle shop. It makes sense for everyone.

Photo Credit: Mike Beningo

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13 responses to “Beer Displays and Brand Equity

  1. Great article, Alex. As you say, the math does itself. Hope this gets shared widely.

  2. we had many discussions about this very issue when opening up our bottle shop in Orange and we ultimately decided to go against what you are saying…and we ARE a brand!

    The theory that we still hold true to is that too many beer drinkers do hold true to a single brand. That is something that stems back to our grandparents’ generation. “I’m a bud guy” or “I’m a miller drinker”. People pick a brand, give them all of their loyalty and for the drinker who isn’t a super beer geek, they stick to that beer everytime they go to the store. We wanted to encourage trying new things! If someone comes into our store and says “hey, do you have anything from Stone?” We can investigate which Stone beer is their favorite, lead them to where that beer is on the shelf and then say “and also, if you do like that beer, you might want to give a shot to one of these other 4 beers right next to it that are very similar and you might even learn to like better.”

    We are developing equity in craft beer rather than in a certain brand name. Drink better. Drink local. Drink craft. Don’t just drink what you are familiar with. Don’t just drink from the company that has the best bottle art. Craft beer is about discovery. Just look how excited the true beer geeks get when something new hits the market. Beernews.org makes their entire living off showing new labels from new beers. They make their living off the discovery of new craft beer.

    I’m not saying it is necessarily a horrible thing, but grouping beers by brand rather than style may just be leading us to a slightly better world where we get to be old and say “I’m a Stone drinker” or “I’m a Bruery man” rather than saying “I love craft beer.”

    • I appreciate the comment Ben. I also understand where you’re coming from when you talk about the discovery element of craft beer and being loyal to an ethos rather than a specific brand. I do however, think there is a rather sharp distinction between someone who calls himself a “Coors Man” and someone who says, “Stone is my favorite brewery.” I’d wager that someone calling himself a “Coors Man” has more to do with the advertising efforts of the brewery than anything else. The person who titles himself as such is likely more enamored of a particular image than the beer itself.

      By contrast, when a beer geek says, “Brewery X is my favorite brewery,” it generally has more to do with the quality of the beer produced by Brewery X and the brewery’s philosophy and relationship with its customers than any particular image projected by an advertising campaign (paid for or not).

      I also think that most people who have a favorite craft brewery are still willing and eager to discover beers made by other brewers and I always enjoy making recommendations based on someone’s stated preferences. If someone asks if we have something from Stone on, I’ll ask them which particular Stone beer they’re enamored of. If they say Stone IPA, I’ll have them taste Blind Pig (even if Stone IPA happens to be on). The opportunity to educate and broaden horizons is available regardless (although I’m perfectly happy to acknowledge that the context in a bottle shop is a bit different since people don’t have to ask for their beer to get it).

      The point at which I’m driving is that if a brewer has built brand equity by making consistently excellent beer, then it would likely behoove them to protect it. I think they can do both while still promoting craft beer as a whole. I am also glad that this post has achieved its intended purpose in sparking discussion.

  3. A lot of bottle shops I go to actually do group beers by brewery, rather than style (Cap N’ Cork and Wally’s come to mind). In fact, I’d say the majority do it that way. That aside, I do agree that it makes more sense to group beers by brewery.

  4. for what it’s worth, it might interest you to know that 3 out of the top 5 off-premise accounts that sell The Bruery’s beer organize their beer by style rather than by brand (that doesn’t include our own store).

    there are valid arguments for both scenarios and marketing-wise, yes, it’s better to have every expression of a particular brand right next to eachother on a shelf. so i think it depends if you want to look at this issue from the perspective of a salesman who just wants to get interesting beers into people’s hands or if you are on the manufacturer’s side and just want to sell your own beer.

    i’d be very interested to see a store test out both methods, switching it up for a month at a time and posting the sales results.

  5. Brand equity is the quality of the beer in the bottle that either will, or will not, ultimately bring a customer back to be a repeat purchaser. What you speak of is not brand equity, it is brand awareness.

    Brand awareness leads you to a product, whereas brand equity — or the value of the brand — in the form of the reputation and opinion of that brand based on your own experience or the experience and recommendation of a trusted source, is what can get you to buy that product.

    Think of it for a moment with this analogy of condiments: for sure Heinz seeks brand awareness, and invests plenty of money to attain it. But do you see Heinz ketchup next to their mustard next to their relish next to their BBQ sauce next to their steak sauce next to their salsa next to their…etc. etc. in the grocery store? Not likely. Perhaps in a special display, but otherwise, no. In our world of copious, often overwhelming selection in America, we create categories and group things as such to help consumers find the set of selections from which they can make a choice based on what they are looking for.

    Scientific experiments and data have shown that with many choices presented, some form of categorization is necessary for consumers to make a choice, otherwise they may not make any choice at all. Products in grocery stores are categorized. Even within subcategories, such as in the bread section where the breads are arranged by style; the white breads are merchandised together, wheat and grain breads, raisin breads together, English muffins together, etc.

    It is up to the company behind the brand to ultimately make a name for the brand and earn value in the mind of the consumer, through whatever approach the company chooses. It may be fancy packaging. It may be low, low price. It may be the quality of the product. It may be a combination of those and other things, including advertising.

    Now, think of a car show: all of the trucks and SUVs from the various brands are together in one hall, while the passenger cars from various brands are in another hall, all of the exotic cars together in another hall, customization accessories in another, etc. This process of categorization and merchandising allows customers to become aware of brands they may not have previously heard of. At the same time, if Ford has good brand awareness, and solid brand equity in the reputation of its pickup trucks, you are certainly going to look at Ford trucks if you are in the market (unless you’ve decided you hate all Fords because of the ‘70’s Pinto you once drove).

    Think of a restaurant menu; it’s categorized by appetizers, soups & salads, beef dishes, poultry dishes, seafood dishes, pasta dishes, desserts. It’s all prepared by the same chef, but just because you like this chef’s filet mignon doesn’t mean you even like salmon let along this chef’s salmon.

    What I am seeing now in great beer bars in the Washington, DC area (Churchkey, Pizzeria Paradiso, others) are the beer lists broken down by specific beer style or flavor category, e.g., “Malty, Sweet”, “Hoppy, Floral, Bitter”, “Crisp, Clean”. These are some of the top beer bar destinations in the country doing this today. There are just so many beers. They have to arrange them in some kind of meaningful manner for the majority of their customers, most of whom are relatively new to craft beer and in some cases beer at all, to be able to make some sense of the list and have a starting point.

    Now, in the interest of the topic at hand, we must look at this from the perspective of the beer retail store – the place where the manufactured beer is actually sold to the consumer in package form– who is trying to create a customer-friendly shopping experience for the MAJORITY of his/her customers (you can never please 100% of the people). Right now the craft beer consumer can generally be segmented into two camps; the knowledgeable beers geeks, and then everyone else. The knowledgeable beer geeks make up, being generous here, at most 10% of the potential beer consumer market. That number is frankly way too high, but let’s use it for this discussion.

    Beer geeks understand beer, they understand styles, and they have studied and decided what they’re going to buy on their next beer run before they step foot in the store. They come into the store armed and ready. They can find their way around the beer aisle with little to no assistance, no matter how the beer is merchandised. They just LOVE standing there and staring at the wall of beer! (You know I’m right about that). The other 90% of customers, however, are frankly intimidated in the beer aisle. They don’t know where to begin. “Just give me a starting point” they say in the look on their faces. “I have know idea where to start with all of this beer.”

    And here’s a fact; a large portion of this consumer segment is women. We know from statistics that women impact some 80% of all consumer purchases in the U.S. Women buy a lot more craft beer than we initially realize, both directly and indirectly. Guys buy craft beer for themselves, whereas women buy for their significant other, for relatives (such as dad or brother), for parties and social gatherings, and then for themselves. And women like to shop and when they shop they like some sense of order. You should see the look of delight when a woman customer is shopping beer for her husband or boyfriend or father about whom she knows one thing: he likes IPAs. When she’s shown the section filled with all IPAs, suddenly her world lights up and you’ve just handed her the keys. She’s now in familiar territory and has confidence. She ends up buying more than she initially came for.

    Most guys openly (some secretly) like it this way, too. They come in for their favorite XYZ brand Stout, and suddenly they are presented with a world of other Stouts to consider. “Oh yeah, that reminds me I’ve heard of this ABC Stout before. I’m gonna give it a try.” Or, “I’ve never heard of this one but the write-up sounds good, so I’ll give it a try.”

    Keep in mind that one large retailer now making headway in your neck of the woods does ONLY the domestic Craft SINGLE bottle beers by style. This is by design. When shopping for single beers, customers (the 90%, and at least half of the geeks) are in experimentation and/or discovery mode to build a custom 6-pack. “What’s new, what’s different, what might I like if I (or the person I’m buying for) know I’ve/they’ve liked other IPAs?” On the other hand, when shopping for pre-packaged 4- and 6-packs, customers are then looking for specific beers. The 4- and 6- packs are merchandised alphabetically by brand as they have always been. There’s the brand lineup you speak of, untouched and as it’s always been.

    Not all stores sell beer by the single bottle, or if they do, it is primarily only the large format bottles, not the 12oz bottles. When a store offers its entire craft and import beer portfolio by the single bottle, regardless of bottle size, that’s a big bonus.

    What you have in this set up now is a cross reference library of beer; packs set by brand, and singles set by style. You are provided two ways to approach finding beers.

    The bottom line? Craft beer sales are way up in this retailer (higher than the national average). The majority of customers do like, prefer, and appreciate the style set. And sales reports show that customers are not only buying more single bottles of beer, but they’re buying a wider variety of beer styles than they did previously when the singles were set by brand. In other words, the number of individual SKUs selling has increased. This is an indicator that their world of beer is opening up. They’ve come to realize this beer called Stone IPA is truly unique and different from Stone RIS, which is different from Stone Sublimely Self Righteous; it’s not just a different package for the same beer…like the big three domestics have been doing for years coming up with fancy packaging options to sell the SAME beer.

    Craft brewers have spent, and continue to spend, lots of equity in the form of dollars and sweat and time to teach consumers that craft beer, like wine, is as good as and even a better companion with food. They’ve taught us about the different styles which equate to a plethora of different colors and flavors (key word: FLAVOR) available in craft beer vs. the domestic macro yellow lagers.

    As customers learn of these different flavors and come to like some of them and seek them out over others, it is only natural that a sense of order in beer merchandising is the next step. For example, a recipe may suggest a Cabernet wine as a pairing for that dish. So the customer goes to the store seeking a Cabernet. There they all are. That same recipe may now also suggest a Brown Ale as a pairing, so the customer goes to the store seeking a Brown Ale. Not a brand, but a Brown Ale. Where are the Brown Ales? Let’s make it easy for the customer to shop for Brown Ales, and for the store personnel to assist the customer in doing so. Win-win.

    The brewers that brew good beer will be the beers that are recommended by friends and store staff and that, at the end of the day, will win out. Let’s not underestimate the consumer; he/she knows a good beer from a bad one. The best beers will win in the end (as will the consumer. That’s competition and it’s a good system).

    Give the consumer some choice. Make the choices understandable and accessible. The cream will rise to the top.
    Rob Hill
    Twitter: @Total_Wine_Beer
    Facebook.com/TotalWineAndMore

  6. After much consideration and reading hru Rob’s comments a few times, my mind has been changed. I deal with a rather LARGE national retailer, might even be the same one Rob works for, and at first I disliked the new single aisle set up, for all the reasons mentioned. I was afraid that if a customer loved our wheat and wanted to see what else we brewed, and didn’t venture into the pre packaged aisle, they would have no idea about our other beers, unless they asked some from the store. However, after again reading Rob’s explanation on the benefits of this set up for the craft industry as a whole, I find myself warming up to this idea. We are also fortunate in Arizona to be able to conduct in store samplings on a regular basis, and that is where we are able to turn consumers onto our beers, simply by asking the question” what do you typically drink?” When a consumer replies “IPA’s” we sample the IPA’s from our portfolio, and then often times take a stroll over to the IPA section, all the while pointing out our offerings, and then most times a few other’s from friends in the industry that offer a stellar rendition of that offering.

    Just my 2 cents
    JR Wheeler

  7. Rob,

    Thank you for the insightful and thoughtful post. I really do appreciate you taking the time to contribute to this discussion. I agree with your first paragraph, that brand equity is based on the quality of what’s in the bottle. I also don’t think there’s a right or wrong way to merchandise. There are merely ways that accomplish different ends. The hybrid approach you mentioned seems particularly intriguing and well thought out. It also serves just about every consumer well. If only all shops were big enough to have the luxury of taking that approach.

    The concern I was trying to express with this post has to do with a possible degradation of brand equity through a lack of brand awareness. Were I a well-established craft brewer, I might be worried about my beer being lumped in with a bunch of possibly inferior newcomers and getting lost in the shuffle due to classification by style. However, one could take a different view as well.

    Unlike past craft beer bubbles, more of the beer now being produced is well-made. Thus, getting lumped in with craft beer as a whole could end up having a net positive effect for any craft brewer. It may be quite true at this point that the rising tide does lift all boats. Encouraging experimentation through classification by style may be better for all craft brewers in the long run because loyalty doesn’t matter as much when demand is outpacing supply. Craft beer still has a relatively small amount of overall market share versus macro beer so having customers spread the love might be better for the industry as a whole. The more people want to experiment, the more they want to buy. With craft beer adding new converts every day, perhaps brewers ought to be more concerned with the brand equity of “craft beer” than the brand equity their own breweries have. That, as you say, is built through the product in the bottle. Surely people will be able to pick a favorite from an IPA mixed six-pack they bought and may very well return to buy a six-pack of that favorite alone.

    Again, thanks for your comment. It allowed me to refocus my perspective a bit and I always enjoy robust discussion. Cheers!

  8. A cynical person could also say that sorting by style ends up creating more demand for retail end caps for those looking to promote their brand, as they no longer have the contiguous shelf-space. Which then means more $$$ for the retailer.

  9. In our bottle shop, most organization is “by country” and grouped “by brewery.” We do this on purpose, not just to promote brands, but to promote beer exploration. Most people are more likely to branch into different styles by trying those of their beloved brewery, rather than venturing out into the unknown. However, due to the number of requests for “wheats,” “stouts/porters,” and “pales/IPAs,” I’ve taken this a step further by color-coding those three most common-sought categories, so locating them around the store is a breeze.

  10. Pingback: Vote: Organize beer shelves by style or brewery? | Beernews.org

  11. I’ve read through all of the great comments that defend both sides of the fence. I do appreciate the incredible insight from everyone. As originally stated by Rob I like the dual approach. Though i am not in retail, but still being a beer bar with a large selection of over 500 bottles, I appreciate both approaches just in a slightly different manner. My beer coolers are arranged by country, then by brewery. This creates a visual for my customers and reference points. I do like the idea of printing my bottle beer menus by style. With the visual sense removed its much hard to tell by just a name the style of beer. Printing beer menus by styles adds this comfort zone for my less craft beer educated patrons.

  12. You bring up a good point, Caleb. Here in Washington, DC, we have some world class beer bar destinations, including ChurchKey and Pizzeria Paradiso.

    Both of these locations have an extensive domestic craft and import beer list (draught and bottle), especially ChurchKey. I’ve noticed that both of these beer establishments present their beer list (menu) with the beers listed by beer style, not by brand.

    I’ve also noticed that both keep the bottles in style groupings in the glass-doored, lighted refrigerators behind the bar. This, I have observed, is to make it easier for the bar tenders to find the beers and to make recommendations to customers of other beers of a particular style.

    This same principle applies to store employees in our retail stores, who have ready access to essentially all beers of a particular style in one place.

    In our case, by having the 6-packs arranged alphabetically by brand (the “usual”), and the singles by style, this creates a cross-reference library of beer in our stores, allowing customers and store employees to find beers from different approaches.

    Overall our customers, the majority of whom are not beer geeks, have found this setup to be more favorable.

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