In the world of beer, private label innovation is on the rise as retailers capitalize on consumer demand for value-priced options. With excess manufacturing capacity available and struggling craft brewers scaling back production, the time is ripe for store brands to make their mark in the beer market.
For years, beer has been a tough category for store brands to break into due to the abundance of cheap options with strong brand recognition. However, consumer preferences are shifting towards quality beer at affordable prices, creating an opportunity for retailers to introduce private label brews.
Retail giants like Costco and Walmart have recently made investments in exclusive beer brands. Costco partnered with Deschutes Brewery to offer a helles-style lager and barrel-aged stout under its Kirkland brand, receiving positive reviews for the new brews. Walmart is also gearing up to launch contracted brews under the Brewmasters line, with labels resembling popular mainstream brands.
Convenience store chains like Sheetz, Rutter’s, and Stewart’s Shops have been experimenting with private label beer for years. Stewart’s Shops recently relaunched Mountain Brew, an exclusive beer brand that has exceeded expectations in terms of demand since its reintroduction. The success of the revamped Mountain Brew can be attributed to its existing brand awareness and local appeal, coupled with its competitive pricing.
Paradox Brewery, the brewer behind Mountain Brew, is now looking to expand its private label offerings after the success with Stewart’s Shops. Private label sales overall grew by 4% last year, reaching $271 billion, indicating a growing trend towards store brands in the market.
Despite the positive outlook, launching private label beers is still a challenging endeavor. The beer aisle is saturated with options, making it difficult to stand out amidst competition from established brands. Craft brewers may be willing partners, but finding the right fit in terms of capacity and scalability can be a hurdle for retailers.
Ultimately, success in the private label beer market hinges on understanding the target audience and catering to their preferences. Retailers must have a clear vision and strategy in place to differentiate their offerings and capture a share of the growing demand for quality, affordable brews.
