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FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794
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Posted on 04/12/2003 11:26:05 PM PDT by gd124
DALLAS -- 7-Eleven Inc. will stock its own private-label beer starting this summer, a move that's expected to be closely watched in the $60 billion U.S. beer business.
Santiago, which will begin to appear in 7-Eleven cold vaults in June, will be sold for $5.99 a six-pack. The price is lower than many other brands, including Mexican import Corona, with which Santiago is packaged and brewed to compete.
"7-Eleven is the 800-pound gorilla in the beer business. It's one of the largest sellers of beer in the country, somewhere in the top five with Wal-Mart and major grocery chains," said Harry Schuhmacher, editor of Beer Business Daily, a publication aimed at distributors. "If you're going to do a private label with somebody, 7-Eleven is a good choice."
The Dallas-based convenience-store chain said its imported beer is being made by Cerveceria La Constancia, an El Salvador brewer, in a joint venture with London-based SABMiller PLC, parent company to Miller Brewing Co.
Getting 7-Eleven a proprietary beer has been a pet project of president and chief executive Jim Keyes.
"It has to do with customer loyalty and getting people to keep coming into the store. That's what we've been doing with our coffee, bakery and foods," Keyes said. "It's the same with beer. If people develop a taste preference for Santiago, they'll have to come back to 7-Eleven."
Beer and wine represented 11 percent of 7-Eleven's sales last year, ahead of candy and snacks at 10.7 percent of total merchandise sales but behind tobacco products (27.5 percent) and nonalcoholic beverages (22.5 percent).
7-Eleven is also trying a proprietary wine label called Regions.
Santiago beer will be delivered to stores by local and regional Miller distributors and 7-Eleven's delivery network that supplies stores daily with fresh foods.
7-Eleven's strategy in recent years has been to build on the success of its longtime proprietary Slurpee frozen drink with other branding such as Big Gulp fountain drinks. More recently, it has added BigEats sandwiches and Dream donuts, a new recipe to compete with Krispy Kreme.
Retailers like private-label products because they have higher profit margins and can be offered at lower prices than national brands. Corona beer, for example, retails for $6.99 to $7.49 a six-pack.
Albertson's Inc. and Kroger Co. are among only a few retailers trying the private-label beer strategy, Schuhmacher said, "but I don't think they've been very successful because consumers are very image-conscious when they're drinking beer, and most want a national brand."
Kroger launched two labels a year ago, Caguama and Joses Hoffbauer, and added two more in the past six months called Lawson Creek and Hollande 1620, said Russell Richard, spokesman for the Cincinnati-based chain. "So far, they're performing well," he said.
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FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794
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It is in the breaking news sidebar! |
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Here hold muh swill.
Lame, anachronistic blue laws!
Everytime they try to reform those laws there's one group that's opposed. Nope, it's not who you think. Just think about who's working in those stores.
ROFL
Apu Brew
Yep! Same here. There has been some talk about repealing the law forcing liquor stores to close on Sundays. The liquor store owners don't want to work on Sundays (understandably) and don't want to have to worry about competition.
My problem is with 3.2% beer. It made sense (sort of) twenty years ago when Colorado had a two-tiered drinking age (18 for 3.2% beer, 21 for everything else). Now that the drinking age is 21 for everything, we ought to do away with 3.2% beer. Let the liquior stores sell everything and allow the grocery stores (and 7-11) to sell only full-strength beer and wine.
As far as I know, Colorado and Utah are the only states that still even have 3.2% beer.
"Soon I'll have the whole state drinking slightly less potent beer!"
This is not a new phenomena. 30 years ago, I worked in a grocery store that sold its own private label beer.
It was from the bottom of the vat of a now-defunct local brewery. Their "brand-name" beer was bad enough, and the private label beer was terrible.
The only people that bought it were the alcoholics that couldn't afford anything else.
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