In 1969, my first summer working on a Coors delivery truck in Dallas, the entire portfolio of the company consisted of: 4/6 NRs, 24/12 bottles (same as the 4/6 bottle), 12/32 quarts, 1/4 bbls., 1/2 bbls. These 5 packages of Coors Banquet is all we had, think about it, only 5 SKU’s of one brand! Of course in those days, the state of Texas only allowed beer packages in 288 ounce eq. except for quarts and kegs. One of the first creative package changes of that time came from Schlitz when they, in response to the 288 ounce law, came out with “Tall Boys,” 12/24 ounce cans which was also 288 ounces. By the mid 70’s the race was on with the introduction of 12/12 cans/NRs and the new “light beers” first from Miller and the rest is history.
During my years as the Corporate Director of Malt Beverages at Glazers, our system had over 12,000 SKU’s listed. This included beer, wine, spirits, N/As, waters, mixes etc. but like most W/S operations they had figured out how to logistically manage this number. While traveling the country over the years, I watched with interest the explosion of products, packages, flavors and styles hit the industry to the point every wholesaler I visited had some type of internal system to manage the increase number of products. Most had a “review committee” and had a system in place to monitor velocity based on internal targets. As an example, a standard might be the sale or depletion of at least a pallet a month. This assumes the product had the proper support by the vendor and the wholesaler executed as planned.
It was just reported that since 2008, the number of SKU’s in stores have increased +1,764 with craft beers representing +1,101 of that number. Think about how this has affected the retailer? HEB in San Antonio does two “resets” a year called “round tables” where wholesalers work together with HEB to add and eliminate various brands and packages. The buyer “ranks” the new products by importance and store type. This past spring the HEB buyer was presented with 300 new products and packages on top of over 200 last fall. Now how do you manage that? In the past, you had about 6 months to create a velocity rate justifying either package expansion or just being able to remain in the sets. Now you’re lucky to have 8 weeks to prove the rate, if not, out you go. One and done!!
Right now there have been 88,040 COLA’s submitted to the TTB for approval. That’s in the first half of the year! Now if that doesn’t get you, think about this, there are estimated to be hundreds of applications for new breweries at the TTB today!!! Many are brew pubs, but let’s assume 100 get permits, 50 get built, assume (conservative) 4 brands with 3 SKU’s or 12 new ones to sell, that’s at least 600 more coming and as we all know, that is the minimum.
Now comes the big question, where do they all go??? I call it “the coming tsunami!” Are there wholesalers who will take on these new products? Are the retailers going to support them? A vendor told me this week that in his state, ABI has rolled out 13 new SKU’s this year! We are being flood! Is it the way to grow the industry or are we kidding ourselves? You tell me then stay tuned for that editorial…….coming soon!
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