Whole Foods principal buyer for beer Mary Guiver highlighted the growth of non-alcoholic (NA) beer, but cautioned suppliers that the natural grocery chain is near its limit during a panel discussion at the Beer Institute’s annual meeting in Denver earlier this month.
NA beer has “absolutely destroyed” in Whole Foods stores, and the retailer, which caters to consumers seeking healthy lifestyles, has “committed to non-alcohol being really well-represented” on its shelves, Guiver said.
“It was triple-digit comping the last few years. This year – today – it is well above 50% over last year, and it just hasn’t slowed down,” Guiver said. “It’s our No. 3 category behind craft and import.”
Even as the segment grows, Whole Foods is approaching its limit of shelf space dedicated to NA beer, Guiver said. She added that she believes the grocery chain already has “the right amount of space” dedicated to NA beer, so now the strategy moving forward is to maintain the top brands, “which are some of our top brands, period,” and give them the space to represent their core offerings.
Nevertheless, as local players enter the market and flavor profiles expand beyond lager and IPA as the segment grows and evolves, some space will go to other styles such as Oktoberfest and flavored hop waters, Guiver said.
Guiver added that while “it’s not a bad idea” for suppliers to have a NA beer in their portfolio, suppliers should approach the segment as a promotional opportunity or seasonal release.
“I don’t think that there’s space for all items every day in the cold box in this category, so we have to rationalize a bit already for the retailer,” she said. “It’s a little bit critical.”
In regards to space being allocated to spirits-based canned cocktails, Guiver noted that beer and spirits share the store’s cold box space, with spirits getting “one shelf to two full doors depending on” space and license types.
“We just try to make sure that we’re keeping things relevant,” Guiver said, noting the approach is similar to craft with the retailer looking to represent “local, regional and national” players and leave space for “new and cool” offerings.”
Whole Food remains “a beer destination,” Guiver said, pointing to “half” of its bev-alc dollars coming from craft, “a good chunk” coming from imports and another “good chunk” coming from NA. She cautioned suppliers against taking time away from core beer in meetings to talk about the “kaleidoscope of hard beverages.”
“Once you get all that together, we’re looking at a pretty small part of the cooler that’s dedicated to beyond beer, fourth category hard beverages,” she said. “It’s a beer cold box, and that’s what people want and that’s what people are buying.
“At the end of the day, the bulk of our business is beer.”
On imports, Guiver said they are performing well so far this year “across the board” and some higher-end brands, including Asian and European craft brands, which are beginning to show up in 16 oz. can 4-packs and “doing extremely well.”
Guiver said it’s worth noting that there’s a wave of underrepresented producers – including women and Black, Indigenous and people of color – who are rising up within craft.
“There is a ton of energy around the fact that there is just a missing component of the human population in the U.S. that aren’t represented in beer right now,” she said. “And what a great time to finally have this dialogue and start to support those brands, and it’s happening at a craft level. They haven’t had the support at a larger level, historically.
“So here comes this wave of producers who are demanding to be represented in retailers and on tap, and I’m so excited to be a part of this conversation. And we encourage anybody who is a person of color or a woman from a historically marginalized group of folks out there who maybe didn’t have a seat at the table to talk to a retailer to come and talk to Whole Foods, because we want to represent their community in our stores in their own community and beyond.”
Those up-and-coming breweries that are more representative speak a “younger language,” which will be “critical to the growth of the beer industry in my opinion,” Guiver added.