Tired of rising price and volume and margin decreases in the beer category, 7-Eleven is introducing Game Day, a store brand beer to be made by City Brewing of La Crosse, Wis., according to a Fortune report.April 20, 2010
Tired of rising price and volume and margin decreases in the beer category, 7-Eleven is introducing Game Day, a store brand beer to be made by City Brewing of La Crosse, Wis., according to a Fortune report.
The new product is a premium beer selling at a budget price, 7-Eleven confirmed, but it declined to provide Fortune with further information.
The core beer customer is a key segment affected deeply by the recession, Beer Marketer's Insights president Benj Steinman told Fortune. “Think male, age 21 to 27, blue-collar workers, and then think about the decline of industrial jobs,” he said.
Convenience store beer sales declined 4 percent in 2009, according to SymphonyIRI data, a steeper decline than was experienced in other retail outlets. However, “below-premium beers have held up and have even seen a slight lift,” the report said.
Because core convenience store shoppers now have less cash, some industry observers believe that is why 7-Eleven is entering the market now with its own low-priced brand.
"They figure that since brands are weaker at that price segment they can capture the full margin rather than pay a premium to a supplier," said Harry Schuhmacher with Beer Business Daily, which first reported the news.
In 2003, 7-Eleven launched Santiago, it first attempt at a store brand beer in the import category when that segment was growing rapidly. The brand ultimately failed because "high-end no-name beer is a loser proposition," Schuhmacher told Fortune. "Why pay more for a beer nobody's ever heard of?"
Schuhmacher is also skeptical about Game Day, saying that “private labels work for soft drinks, but in the beer world brands still matter. Even at the low-end of the spectrum, consumers often show fierce loyalty to a single label.”