Increase Basket Size by Encouraging Premium Beverage Sales
Across consumer-packaged goods, upgrading to premium products is the largest growth driver for sales. And across markets, certain attributes drive premiumization: High-quality, convenient, unique, indulgent and purpose-driven products see the greatest success in convincing consumers to trade up to a premium product. The same principles apply to consumers shopping the alcoholic beverage section at the grocery store.
Anheuser-Busch’s IGNITE strategy recognizes four pillars of category growth:
- Category Fundamentals inform buying and merchandising.
- Inviting New 21+ Drinkers and Women with products suited for drinking age adults who are new to purchasing alcohol.
- Expanding Frequency of Responsible Purchases by encouraging more drinking occasions and increasing overall sales by raising awareness and educating shoppers.
- Driving Trade Up with a “treat yourself” mentality that encourages consumers to purchase more premium options.
The final pillar, Trade Up, recognizes the potential to drive purchases of more premium brews and employs strategies for marketing and buying that encourage shoppers to upgrade—increasing basket averages overall. Two growth drivers are foundational to this pillar: Trading up 21 – 39 year olds seeking products with the right badge value, and encouraging 40+ males to treat themselves with products that tout high quality ingredients and heritage.
Key demographics drive growth
Finding opportunities to expand the prestige segment begins with identifying what drives a shopper's decision to trade up and activating with the right products and messages to meet their needs. According to Anheuser-Busch research, adults 21 to 39 years old and men aged 40 to 65 are especially lucrative demographics on which retailers can focus growth via trade up.
Growth Drivers for Trade Up
· Image Matters: In a nutshell, the key to activating trade up among younger LDA adults is focusing on image. They tend to select a beer that helps them to express themselves, and if they trade up, they’re likely looking for a way to reward themselves or for a small luxury to enjoy as a treat. For this group, providing a beer with a high badge value that justifies a higher price is essential. For grocers, highlighting limited edition, purpose-driven or uniquely special products can help convince these shoppers to splurge.
· Social Treat: For men aged 40-65, premium beer is best marketed as a social treat. A beer that acts as a sign of success, provides a special treat and serves as something to share with others and connect over is likely a beer these men see as worth trading up for. Promoting a premium beer as a sophisticated beer worth sharing is key. Grocers who leverage social occasions as an impetus to trade up can see significant growth in this consumer demographic.
Understanding the shopper
Insights into different consumers’ shopping habits are also essential to informing what products a grocer sells and how they market them. Anheuser-Busch research finds that shoppers tend to fall into one of two categories: the Occasional Splurgers (about 76% of the population) and the Always Fancy (who make up the remaining 24%).
Occasional Splurgers tend to reserve their premium alcoholic beverage purchases for special occasions; therefore, focus on “capturing the celebration” by honing in on holiday marketing that encourages premiumization and cross-category displays with products for sharing and gifting at celebrations.
While a smaller demographic, the Always Fancy consumers drive 70% of growth in premium beverage sales; for these shoppers, premium beverages are a routine purchase rather than a special-occasion splurge. Elevating the shopping experience can encourage trade up among these consumers. The IGNITE strategy suggests four ways to do so:
- Install a rotating occasions-based anchor at the end of the aisle that encourages shoppers to trade up for special events.
- Use displays to help consumers differentiate between different beverage styles. Endcaps can feature monthly recommendations to encourage shoppers to try something new.
- Provide education and recommendations to address the top barrier to trade up—lacking knowledge on how to best enjoy a premium drink—with information on what glassware and serving temperature best suits each beverage.
- Create a sampling bar to circumvent shoppers' hesitancy to purchase a beverage they haven't tried before and don't know if they like.
By understanding the factors that convince shoppers to reach for the premium alcoholic beverage option on the shelf, grocers can better meet consumer demand. For tailored insights and recommendations to encourage trade up in their own stores, retailers can contact their local Anheuser-Busch category management representative.