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05/11/2017

Private Label Still Mostly a Non-Factor in Beer; Consumer Edge Report Reduces Concerns

Many retailers have tried.  For decades.  Yet none have made much of a dent.  Private label beer sales have just not happened.  They grabbed literally zero share of total US IRI.  And private label still “unlikely a short term threat,” noted Consumer Edge’s Brett Cooper in interesting note today.  “Excess capacity and a changing retail environment” raise “questions on whether the future includes measurably higher US private label market share in alcohol.”  But Consumer Edge believes in next 3-5 yrs, “private label is unlikely to be a measurable driver of branded company performance.”

Only one retailer has made inroads with private label alc bevs: Costco. “Costco is THE example of delivering store branded alcohol (primarily wine and spirits).”  Its Kirkland brand gets  8% of spirits sales in its stores, 6% of wine and 4% of beer in the yr ending March 2017, according to “receipt data” from Usquare Insight.  Kirkland beer lost 1 full share point. So not really happening there either.  (Editor’s note: we’ve always heard Total Wine also does brisk private label biz.)

More broadly, “to date, beer has been able to defend its position,” said Brett, noting top 2 “control the vast majority of the low-end and mainstream price tiers.”  With MillerCoors “cutting Hamm’s price to ~$11/case, it’s difficult to imagine that we will see success at the low end of the beer business,” noted Brett.  Perhaps of more concern, craft, partly because of excess capacity.  “Craft beer capacity utilization in the low 60% range” was ok when craft grew double digits, but “with the industry slowing… the excess capacity is more of a concern,” he added.  In revealing chart, Brett shows private label shares for dozens of consumer packaged goods, over 50% of eggs and also cups & plates are private label.  But beer and smokeless tobacco are the lowest share of any CPG, at roughly zero point zero.  That’s right 0.0.

Publishing Info

  • Year: 2017
  • Volume: 19
  • Issue #: 88
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