Beer Marketer's Insights - Beer in Danger of Losin' Space in Buffalo Wild Wings; On-Prem Engagement Ain't the Same; Pricing "an Issue"

It's not just off-prem where spirits continue to gain ground on beer. "Beer is losing at Buffalo Wild Wings," and "in the on-premise," alc bev director for BWW Jason Murphy commented on panel with Dogfish Head's Sam Calagione and Tamarron Consulting's Laurie Scheiffler at Brewbound Brew Talks in Denver last week. Beer's been "losing for a while," and the industry's "got to come up with fun ways to bring that back" or it's in danger of losing further ground, he warned. BWW's gonna reach "an inflection point soon" and the 30 tap handles currently allotted to beer per store might get cut down to add wine, batch cocktails, nitro cold brews and other lines. So 30 handles now might become 20, he thought. Co's "already talking about" that possibility and it's "a decision we're going to have to make soon." Dip in Distrib & Brewery Engagement On-Prem Then too, there's "a little bit of a dip in engagement from a lot of our wholesalers," Jason commented. "We're not seeing the same level of engagement we used to pre-pandemic" on support, samplings, pint nights, etc. This extends to suppliers too, focusing most on creating draws at their taprooms vs distributed on-premise, he noted. Draft makes up 93% of BWWs beer sales, and if draft loses, BWW's alc bev sales lose, said Jason. Industry was a little slower to bring resources back to focus on-premise post pandemic, Sam said separately, also pointing to "tension" between taprooms and on-prem accounts. But draft declines are "not a pandemic problem," it's a "generational problem," said Sam, acknowledging "a decade" of declines for draft beer. That's why Dogfish is lookin' at "ways to reinvigorate draft for us" thru new brands like Citrus Squall, among other initiatives. Dogfish Head draft is down from ~25% of its mix 10-15 yrs ago to now closer to 20%, Sam shared, but not down nearly as much as industry avgs. Sam Adams is also "down a little bit" in draft's mix shift.Draft is down this yr, but everything is down this yr, Laurie from Tamarron said citing numbers from NBWA chief economist Lester Jones. With industry shipments down 5% thru 1st half in reported data, draft has come back to ~9% of industry volume, she said. But gotta note, draft was still nearly 1/4 below 2019 levels in 2022, and now it's declining further below pre-pandemic levels. Still, Laurie focused her comments on the work being done thru NBWA's Beer First initiative and oppys to work together across tiers. She countered there's "the same level" of engagement on-premise from distribs post-Covid, in her view, tho acknowledged it's an area "we'd like to see some improvement" in. This is a "critical moment" to address on-prem challenges for the industry, said Sam.Pricing is "an Issue"; BWW "Paying a lot of Attention" Pricing is "an issue" for on-prem, both Jason and Laurie agreed. BWW is "paying a lot of attention" to it right now, said Jason, citing an example of a "major craft brand" that typically sold $140-150 per 1/2 bbl now up to $180 on avg. In some instances, draft is "almost harder" to sell than package on-prem at current price points, Laurie said citing comments made at separate event by Winking Lizard's John Lane, who added that pricing is "a real concern to him." Sam similarly cited John Lane commenting that brewers are "pricing themselves out of relevancy," and talked about recent chat with Allagash founder Rob Tod unable to keep up with increased costs of ingredients.Whether BWW "can take price" and continue passing onto the consumer, or take a profit hit, "neither" is a "good solution," Jason said. BWW's also closely watching student loan repayments over next couple mos to see what "choices" consumers make on their spending. Drinks per check are down since 2019 "fairly consistently across the board for every kind of beer style," whether lookin' at craft, domestic, import. Consumers are still trading up to higher-priced alc bevs, but spirits are winning right now, Jason commented. Tho BWW still prides itself on its selection, even as it continues to face a "huge awareness problem" with consumers who still have the impression it only sells domestic light lagers.

Beer in Danger of Losin' Space in Buffalo Wild Wings; On-Prem Engagement Ain't the Same; Pricing "an Issue"

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