Craft Beer: The Battle For Shelf Space

 

When launching or expanding a new beverage product, companies undoubtedly have a huge list of things they need to focus their time and resources on — from design and production to sales and marketing. If you have your eye on retail shelves, you certainly have your work cut out for you.

So, how do you steal shelf space?

Maximize your space
Floor space in brick and mortar stores is expensive. That’s why it’s important for the product and packaging to take up as little retail real estate as possible.

  • 6-8 packs- Do not use hi-cones or the new trendy 6 pack carriers. While these applications may be great for brew pub sales they are viewed as cheap and are hard to handle in the retail spaces.
  • 12 pack- There are reasons why the big 2 put their beer in an enclosed carton. You are now playing in their world. Act like it or get left behind.
  • Variety Packs- Everyone is doing it. Variety Pack sales are up 21% in 2014 and account for almost 10% of sales. Would you like to increase sales 10% next year? You will need to variety pack and do it well. Automation will be the key to your variety pack success.

Magic Hat Variety Pack on a Climax Machine

Once you’ve gathered sufficient information, you may want to evaluate the need for a specialist. It’s important to choose a reputable company who has the experience in designing packaging and packaging machinery for the stores that you’re looking to target.

Take a long hard look at the shelf
While it is important to be unique and differentiate your product you must be aware of how your retailers want to present and handle your product. The cheapest route is not always the best route in securing precious shelf space for you product. Is your product up to par with your competition?

Craft Beer Packaging

Figure out your product codes
Each variant of a product, such as size, color and other factors, require a common 12-digit universal product code (UPC) prefix number and a unique extension to that variant. Companies must join GS1 US, a nonprofit that sets the standards for international commerce in order to obtain their own identification number that is the first part of the UPC. Aside from the initial fee to join, companies must also pay an annual maintenance fee that varies on the number of unique products you sell. It’s easy to see how this can quickly add up.Craft Beer The other option is to work with a broker that resells UPC codes for reasonable prices. The only downfall is that you’re paying to use ones that ultimately are not your own. If you’re targeting smaller retailers with just a few products, then you may consider going with a broker who will allow you to use their UPC codes at a lower cost. However, if you’re aiming for the large retail stores, they require each company to have their own code for each product.

Pin down your actual costs
Not only is it important for you to understand your true cost per unit — be prepared for retailers and potential investors to disclose this as well. Always remember that the per-unit figure isn’t solely derived from manufacturing expenses. A true cost-per-unit breakdown also includes shipping, packaging, UPC costs and other expenses related to getting that product created and onto shelves. It’s essential to take all of that into consideration when factoring in the number.

Hand Packaging

  • Labor is one of the largest expenses of a brew house. Don’t use 20 people to bottle or can your product when you can use 5. Job creation is great, but there are no jobs to create if your company is closed.

Next time you’re at the grocery store, take a longer look at package designs. I think you’ll see brands are getting more adventurous.