Magazine article Marketing

Helen Dickinson on Retail: Small Is Beautiful for Supermarkets

Magazine article Marketing

Helen Dickinson on Retail: Small Is Beautiful for Supermarkets

Article excerpt

Supermarkets sometimes get a hard time about the powerful hold they have over their suppliers and how they are only interested in dealing with large manufacturers, which ultimately limits consumer choice.

Well, there is an example of a category that is genuinely keen to work closely with suppliers of all shapes and sizes and to grow the market by providing greater choice through innovation. It's the premium bottled beer market, which continues to grow rapidly as consumers increasingly seek out new and unusual flavours of beer.

To get a decent slice of this growing pie, the supermarkets are working closely with suppliers using two methods, which are greatly benefiting all parties. First, there is their move toward sourcing beers from local breweries and stocking them in nearby stores. Second, there is the hosting of annual beer awards.

Sourcing from local suppliers has long been an area of interest for Waitrose, and the company is proving to be a strong advocate of buying bottled beers from breweries located near its stores. To achieve the same objective, Tesco appointed drinks specialist Branded Drinks last year to handle the logistics of sourcing bottled ales from local breweries for small numbers of its stores nearby. Such has been the success of this initiative that it already accounts for pounds 1m in sales and continues to grow.

But it is the supermarkets' brewing awards that are driving real growth in the category and where they are giving even the smallest and most obscure brewers an opportunity to gain a valuable national listing on their shelves.

Tesco and Asda use such awards and encourage entries of a specially developed beer from breweries of all sizes to take part in blind tastings. These events can throw up all manner of winners.

In what other category would you have a situation where a supplier such as tiny Sunderland-based Darwin Brewery receives an order to deliver hundreds of cases of its beers to Asda and Tesco? This is exactly what happened when it impressively won recognition in both supermarkets' most recent brewing awards.

For a company that previously only supplied beer within a 20-mile radius of its production facility, it has been transformational stuff. Past winners of these awards have benefited equally well.

Before winning Tesco awards in 1998 and 2001, the Hall & Woodhouse brewery in Dorset produced only one bottled beer. …

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