According to Bloomberg.com, last September, the colossal retail corporation Walmart invited 500 representatives from the alcohol industry to Bentonville, Arkansas, for an “adult-beverage summit.” Why? To tell the reps how serious they are about selling more alcohol. How serious? They want to double sales by 2016. It may seem ambitious, but what Walmart wants, Walmart usually gets.
Their focus is directed largely on beer with discounts on a range of brands, from Coors to Deschutes, and they’re ditching slow-moving merchandise to make room for beer. New stores are designed with the beer front and center; in many cases, right near the produce. You can even pick up a six pack at their garden centers. I guess if you’re doing yard work, a couple of brews might speed the process along. They’re always thinking.
The whole operation is somewhat secretive. I mean, the summit was last summer and it’s the first I’m hearing about it. Apparently, some analysts who solely cover the store knew nothing about it until recently as well. Why? Well, in the past, Walmart paid little attention to their booze selection. They even banned alcohol in their circulars – a policy since reversed. But, hell, they like money. And they know Americans are spending theirs on beer.
Okay, so what? I’m going to try to keep this neutral. Personally, I choose not to shop at Walmart. It’s a decision I’ve made for myself that I’ve thought fairly long and hard about. I just can’t support them for reasons I’m refraining from sharing. I know this choice won’t have any impact on their business, but I stand firm in it.
I do understand, however, that I’m a single male living with few expenses, so I can afford to shop at different – sometimes more expensive – grocery stores. I realize that some families shop at Walmart because no other store can really beat the deals with the same level of quality.
Anyhow, moving on. Let’s talk about Walmart’s recent efforts to grab your beer money. Here are the facts (as I see them):
1. The more beer Walmart sells, the more dependent the beer makers become on Walmart, the way that so many other companies are.
2. Currently, Walmart is the biggest customer for Anheuser-Busch, The Boston Beer Company (makers of Sam Adams), Molson Coors, and Heineken. We’re talking about the biggest beer brands out there. So, if Walmart is the biggest customer for these big breweries, how much would it take for them to achieve that status with the smaller craft breweries? Not much is the short answer.
3. Like it or not, companies have become very dependent on Walmart. For instance, Hanes, Clorox, and Kraft all generate over a quarter of their revenue from Walmart.
View this information as you will. You might think, “Hey, what’s wrong with that? More attention and shelf space for craft beer.” Part of me thinks that.
Some might worry about Walmart abusing these relationships, creating a dependance, then starving out the brewers for the prices they want, until the brewers are completely dependent on the business from Walmart, in which case, Wally has complete control. Part of me thinks that too.
Here in Buffalo, we have some great, privately owned places to buy beer, so I think I’ll continue to buy mine there. What do you guys think?