Five of Six Mega Brand Sales in Free Fall

BeerNet.com is reporting that Bud Light, Miller Light, Budweiser, Corona Light and Heineken (which, along with Coors Light, make up the six most profitable brands for distributors) are finding their sales in "free fall." You can read the article at the link above at your leisure. I want to comment on one portions of the story: falling C-Store sales.

I have worked in retail most of my life, the majority of it in grocery and convenience stores (or C-stores). Over the last few years, I have noticed even smaller grocery stores expanding their lineup of beers to include more craft beers. Most grocery store remodels I have seen have actually added space to the beer sections.

C-stores don't have the luxury of remodeling. At best, they might be able to open up another door in the reach in. And, since the arrangement of the shelves and the layout of the brands, called "sets" in the biz, are done by one of the big two (Bud or Miller), guess what gets the emphasis on the layouts.

The loss in c-store traffic is likely tied to the economy, but one distributor notes that their sets may partially at fault. He writes: "Same old sets, same old results!... C-stores hammered is hitting the nail on the head! While national c-store chains (most cooler sets controlled by one of the big 2) lost sales ; c-store independents whom have embraced the craft/ FMB sector especially in "Bopper" bottles showed identical trends to supermarkets here." He goes on to call c-store sets "category mismanagement."

C-Stores used to depend on beer, candy, soda and cigarettes for most of their profits. Cigarette profitability is in the crapper, thanks to the last tax increase. If the Feds decide to tax candy and sodas for health care (I think they should.) soda profits will fall, and C-stores could be forced to rethink their marketing strategy.

If the national chains decide to layout their beer cases themselves (as they do their candy racks) the Big Six Mega Brands could face further erosion.