A focus on local ales, craft beer and mini-kegs has seen Morrisons’ beer category outperform the market and post 4.5% year-on- year sales growth. DRN travelled to Yorkshire to meet the buyers, John Morris and James French, and get the lowdown on the success the retailer has enjoyed after a sweeping range review.
A couple of years ago its beer strategy was dominated by deep discounts on lager, an approach that was deemed unsustainable in the current climate. It still offers competitive and often market-leading deals, but it has diversified to tempt shoppers with a broader range and drive value into the category. The mission statement nowadays reads: “To be the beer and cider specialist, while offering great everyday value, ensuring we are the retailer of choice in the UK.”
Morris says: “There is more emphasis on local now. The range is closer to what customers are drinking in the on-trade and there is more real craft beer.” Brewdog, Harbour, Thornbridge, Innis & Gunn, Sierra Nevada, Stone and Brooklyn are among the craft breweries it lists, while it championed the now burgeoning 33cl can format at an early stage by listing the likes of Pistonhead and 13 Guns.
It has 10 lines of mini-kegs in a dedicated bay, including Iron Maiden’s Trooper ale and Black Sheep Best Bitter, the first time that iconic brew has been available in the off-trade. “Customers tell us they want different products and formats for different occasions, such as kegs at barbecues,” says Morris. “Customers love them and sales are strong. We’ve doubled the number of stores they’re ranged in.”
Perhaps the biggest step-change has been the retailer’s approach to local beers. A couple of years ago the range in Morrisons’ Scotland stores was almost identical to the line-up in its Penzance store, but now shoppers are greeted by a bay full of regional ales in most areas.
The country is divided into 12 regions and French spends time in each one, talking to new and existing suppliers to make sure Morrisons always has the most recent breweries and beers in its stores and ensures it is satisfying its customers.
He cold-calls small breweries and spends plenty of time on the road, travelling from brewery to brewery. The team also hires village halls and invites breweries to showcase their ranges, bringing in consumers to rate the beers and stocking the ones that are a hit.
It also gets feedback from the various stores in its 500-strong estate. For example, shoppers at its Tavistock store in Devon kept asking for a local brew called Jail Ale from Dartmoor Brewery, so store colleagues got in touch with the team and they arranged a deal with the brewery.
“It’s now one of the bestselling ales in the store,” says Morris. “Wherever customers ask us for a specific, favourite local beer, we’re always happy to see what we can do.”
The retailer has had similar success with Cornish Cyder’s Cornish Rattler multipacks in its Newquay store. “As a business, we’re championing local ranging,” says Morris. “It will continue to be one of our focuses. We are looking at local and global, such as Northern Monk from Leeds and Bintang from Indonesia.” He adds: “Certainly beer and food matching is an opportunity. It’s important to help customers select a beer they’ll like and we’re looking at ways of doing that.”
Morrisons has moved beer away from the fixture in certain instances, such as a promotion pairing Old Speckled Hen with pies during National Pie Week. It also enjoyed huge success with its in-store beer festival, where it pulled beer out of the BWS aisle and merchandised it in the cheese, meat and fish sections.
Morrisons chose beers that are only available in a small cluster of stores within a particular region but were selling strongly there, and opened them up on a national scale. It put all these local brews together in a dedicated bay in the beer aisle of all its stores, with POS educating customers about each brewery and providing food-matching information, while a four-for-£6 mechanic encouraged trial. There were rhubarb beers, brews aged in whisky casks and lemongrass and honey beers in the mix. Morrisons generally has a market share between 11% and 12% for ale and it shot up to 22% during the festival, so it plans to bring it back in future and dial it up. The bestselling beer during the festival, Moorhouse Blond Witch, also gained a permanent national listing.
The new strategy is paying off and you would expect growth to continue for the retailer. Duty has created inflation and the industry has to collectively be careful with that, but bringing excitement to the fixture and rotating lines has kept its shoppers’ interests piqued.
It has to remain competitive on price when it comes to leading lager brands, but it can also strike a strong balance because it has refused to engage in deep discounts on craft beer, preferring instead to maintain the category’s quality credentials. It also places a huge emphasis on British beer and the current climate favours homegrown products, so the future looks bright.