Wednesday, April 21, 2010
BERKELEY, Calif. - Quick, what's the third-largest beer retailer in the U.S.? Chances are you didn't know it's 7-Eleven. Now, the convenience chain is getting a step closer to the suds it sells, rolling out a store-brand beer billed as a premium brew at a budget price.
The launch, happening this month at stores nationwide, aims to take advantage of the current economic downturn — a long, cold one for beer sales.
"We're really working back from the customers' needs," said Dan Skinner, 7-Eleven category manager for alcoholic beverages. "They're looking for exceptional quality at a value price."
Game Day beer follows the introduction of the Yosemite Road private-label wines in 7-Elevens last year. The idea of the home of Slim Jims and Slurpees turning sommelier had some scoffing. But Skinner said the launch has gone well, with the wines holding the No. 1 and No. 2 spots in the chain's wine sales.
Whether people are ready for 7-Eleven suds remains to be seen.
Al Everett, a web developer in the Washington, D.C., area who blogs about beer at hop-talk.com, is a craft beer enthusiast who wasn't sure what to make of Game Day.
"If I was tailgating before a game, I'd certainly consider it," he said. "It's probably not something that I would have regularly." Still, he was curious. "I'll certainly keep an eye out for it."
Game Day comes in two varieties. Game Day Light is 3.9 percent alcohol by volume and 110 calories per 12 ounces. Game Day Ice is 5.5 percent alcohol and 155 calories. The price is between $6.99 and $8.99 for a 12-pack, depending on local taxes and distribution costs, and 24-ounce singles are available for between $1.49 and $1.89.
The beer is being made by the 150-year-old City Brewery in La Crosse, Wis., one of the country's largest contract brewers.
The move comes as beer sales have softened — it turns out beer may be recession resistant, but it is not recession proof.
What happened is that customers have been buying more below-premium and budget beers. Premium beers still dominate, with volume at 1.5 billion cases in 2009, or about half of all beer sold domestically, according to data cited by 7-Eleven from The Nielsen Company and other sources, but sales were down compared to 2008.
Or, as TV's lager-loving Homer Simpson might put it, "D'oh!"
The plan at 7-Eleven is to capitalize on market conditions.
"We can give premium beers a run for their money," said Skinner, adding that Game Day performed well in taste tests, including among suppliers of premium beers.
This is 7-Eleven's second attempt at beer. In 2003, they introduced Santiago, meant to compete with imports like Corona, but ultimately unable to gain much of a foothold.
This time around, chain officials expect their focus on high value in a down economy will work.
Beverage analyst Benj Steinman was intrigued by 7-Eleven's plans, but not convinced they'll work.
"My attitude to it basically is — show me," he said. "Private label hasn't worked in beer so far." Steinman, editor of New York-based Beverage Business Insights, notes that Game Day "is a new wrinkle and 7-Eleven is very serious about its effort." But he says store-brand beers have to overcome brand loyalty as well as the fact there already are a number of different price points for beer.
"I'm not ruling it out. I just say, 'Show me'," he said.