While wine grows, the private label beer category looks to rebound from a rough year with help from flavorful infusions and specialty beers.
For much of its history, private label beer has remained under the radar. The category dates back to a line of beer introduced by Ralphs supermarkets in the early 1990s. During the ensuing microbrew craze, retailers figured out they could get a high quality lager or ale from a small but reputable craft brewery and sell it profitably under an obscure name. Growth over the next three decades was slow but steady. At the start of last year, private brands accounted for about 2-3% of beer sales across major U.S. grocery chains, according to Bump Williams, a beverage industry consultant in Shelton, Conn., based on an analysis of data from over 1,000 retail stores.
Then COVID-19 hit, and the bottom fell out of the category. “Sales dried up because consumers were going for beer brands that they trusted and knew,” Williams said. “That name recognition matters a lot more in the beer aisle than it does in wine. It’s going to take a long time for [private label] beer to bounce back.”
It wasn’t just private label beer that had a rough year. Total beer volume in the U.S. is projected to drop by 4.9% in 2020, per IWSR Drinks Market Analysis data.
But it’s not all doom and gloom. Corp-orate partnerships like the one between Dunkin’ Donuts and Harpoon Brewery could provide a model for retailers, said David Steinman, senior editor of Craft Brew News. Last fall, Boston-based Harpoon launched a series of coffee-and-donut-infused beers with the Dunkin’ name, a first for the chain. “It was a smart move for Harpoon to hook up with a massive company like Dunkin’ and get their products out to a wider audience,” he said.
Convenience store chains Wawa and Sheetz have been partnering with local breweries for the last few years to launch exclusive, specialty beers at its stores. Wawa worked with 2SP Brewing for a Holiday Reserve Coffee Stout this past holiday and the one before using Wawa’s store brand Winter Reserve Coffee blend. Beers are sold exclusively in the stores and at the brewery.