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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Ontario Grocery stores dip a tentative toe into beer sales: report

Tuesday, January 12, 2016 > 08:48:47
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(Canadian Grocer)

But will soda and salty snack makers lose shelf space to beer in the long run?

Ontario grocers took a slow and steady approach to beer in the week leading up to Christmas, with fewer than half of stores approved to sell beer actually stocking suds the first day alcohol sales were legally allowed.

Toronto-based research firm Field Agent Canada sent some of its 45,000 “field agents” to grocery stores across Ontario on Dec. 15, asking them to take a  “virtual tour” of the premises.

The agents found that nine Sobeys stores permitted to sell beer were not stocking alcohol. Neither were five Metros, four Food Basics, three FreshCos and two Safeways.

Only 23 of the 58 stores allowed to sell beer by the Kathleen Wynne government had suds on shelves Dec. 15. One agent photographed a sign in a Sobeys that read: “Here’s to one less trip. Cold beer coming to Sobeys January 2016.”

Other grocery banners, meanwhile, appeared to be in varying states of readiness.

While one Coppa’s Fresh Market in Toronto had clearly allocated shelf space, many shelves sat empty except for a few cases of Moosehead. However, another Coppa’s in Vaughan was well stocked with coolers and floor displays featuring Stella Artois, Molson Canadian and Coors Light.

Farm Boy stores in London and Orléans meanwhile, boasted refrigerated displays that prominently featured Ontario craft beers beneath rustic-looking signs reading “Craft beer: Featuring local specialty brews.”

“It seemed like they went the extra mile,” said Jeff Doucette, general manager of Field Agent. “They had the cold beer and had it set up as a real section, versus doing it on end caps.”

Loblaw-bannered stores also appeared ready, with beer available at all six Loblaws locations approved by the province, as well as 10 Real Canadian Superstores stretching from Windsor to Thunder Bay, a Your Independent Grocer in Stittsville and a Zehrs in Cambridge.

Field Agent said that Loblaws stores had “very good execution” that included prominent displays and a wide product selection that was a blend of multinational and craft beers.

Loblaws appeared to rely heavily on end caps, with signs reading “Beer. Here!” and purchase hours clearly marked.

“Loblaws definitely seemed to say ‘We want to be first to market,’” said Doucette.

He predicted that grocery stores will create a store-within-a-store environment for beer as it becomes entrenched in their product assortments.

Stocking beer became a “go-fast type of strategy” leading up to Christmas for supermarkets, he said, so stores largely threw up beer on end caps. “But we expect [beer] will go into the main section or a shop-within-a-shop environment, which is hard to do when all the other holiday stuff is kicking around the store.”

Doucette expects some challenges ahead for grocers selling beer. Chief among them: carving out the necessary shelf (and possibly cooler) space.

“It’s eight feet [of shelf space] on two end caps right now, but what category is going to lose 32 feet, and perhaps more, to make space for beer?” he says. “The store’s not getting any bigger.”

It’s an issue with potentially big ramifications for vendors in adjacent categories such as soft drinks and salty snacks, both of which could lose shelf space to beer. “If you’re a vendor in one of those categories, it’s going to change your business,” said Doucette. “It’s a real question that needs to be thought about: Where is this space going to come from?”

Doucette called beer a “natural fit” with grocery that has proven successful in other markets, with beer simply becoming another item on shopping list.

The next big milestone for beer sales is already on the horizon: Super Bowl Sunday, just a month away. While soft drinks and salty snacks have traditionally commandeered the bulk of merchandising activity around the big day, beer will open up another merchandising avenue for grocers, he predicted.


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