Dive Brief:
- Walmart has added more high-end alcoholic beverages to its shelves, Business Insider reported. Products include craft beers, hard seltzers, canned wines and wine and spirits from brands like Buffalo Trace, Justin and Veuve Clicquot.
- The upscale shift in adult beverages for Walmart started last spring and will continue throughout this year.
- Sourcing from local suppliers is a major focus for Walmart, Jason Fremstad, vice president of adult beverages at Walmart, told Business Insider. So far the retailer has had more than 100 meetings with local and national craft suppliers and brewers.
Dive Insight:
Fremstad said Walmart is making these changes because shoppers are looking to purchase more premium alcohol options the retailer isn’t known to carry.
Tapping into these premium alcohols signals a shift for Walmart, which typically attracts budget-conscious shoppers. But customers seem to be ready for the update. To test demand, Walmart brought a barrel of Buffalo Trace bourbon to one of its stores. Bottles sourced from the barrel sold out within six days, according to Business Insider.
Spirits, in particular, gained market share compared to beer and wine for the ninth straight year in 2018, and much of it was given a boost by premium liquors, according to the Distilled Spirits Council. For example, Constellation Brands, which counts Svedka and Corona among its offerings, said its low-price products slumped, while Jack Daniels reported its portfolio of super-premium American whiskeys was "on fire."
Over the past few years, Walmart has been updating its stores and services to welcome a wider range of shoppers. It's rolling out a new-look produce department and sourcing more organic products. It's also offering grocery delivery, pickup and alcohol delivery at hundreds of stores.
Adding new alcohol options is in keeping with that mission to nab new customers and upsell existing ones. Fremstad said the retailer is paying close attention to trends in the industry to stay ahead of the game. He expects hard seltzer sales to remain strong and bourbon and sparkling wine sales to grow. Fremstad also projects a boost in tequila sales, particularly premium tequila.
Grocery retailers across the board are improving their wine, spirits and beer portfolios. Many are remodeling stores to include expanded sets of the high-margin products. They're also adding private label options and delivery. BJ’s added premium spirits to its private label line, Walmart added alcohol pickup to 2,000 of its stores and Instacart has expanded its alcohol delivery footprint.
