I read in the newspaper recently that a prophetic utterance of Marty McFly in Back to the Future II may actually come true – the Chicago Cubs may make the World Series in 2015 after a 107 year drought. It got me thinking, as you do, about what alcohol sales in supermarkets might look like in 2025. Without the assistance of the DeLorean or the Sports Almanac (well the grocery merchandise manual maybe), I have gone with four alternate universes instead of just one.
1) Fewer SKUs, bigger pack-sizes
After legislation was introduced in 2012 requiring supermarkets to only display alcohol in a single area, supermarkets had to re-think exactly how much floor-space was dedicated to alcohol. Once floor-space previously allocated to alcohol throughout the store (such as aisle ends and other displays away from the alcohol aisle) was removed, this ultimately lead to less total space being dedicated to alcohol. With less space came tougher decisions about what got ranged with high margin obviously preferred but also high rate of sale.
The need to rationalise floor space forced a move away from stocking hundreds of single bottles of craft beers with low rates of sale that were fiddly to stack. Larger pack sizes of bigger brands with very high rates of sale were preferred as we moved into the CostCo era. Craft beer had by no means declined, and in fact dedicated craft sections were retained, but on a smaller scale and bigger craft moved into bigger pack sizes as they chased greater volume.
Craft’s real domain became specialist liquor stores where you would go if you wanted to paw over 100 specialty beers and pick one or two out. For anything from a known brand or in any scale, supermarkets increasingly dominated.
2) Alcohol leaves grocery
It all started back in 2013 when a strawberry flavoured sparkling wine was banned from grocery for not being compliant as a product supermarkets could legally sell. Then in 2015, a flavoured cider was equally evicted by MPI for using non-compliant flavourings. Sadly producers and retailers failed to heed these early warnings and kept pushing the boundaries of what supermarkets could legally sell. The instances of flavoured beverages made from a grape wine, cider and even beer base grew steadily until the early 2020’s when the Government, no longer knowing if it was comparing apples with apples or raspberries with cabbages, pulled the pin on supermarkets selling alcohol full stop.
3) Separate liquor store-within-store
In the early 2020’s futurists who had predicted scenarios one and two above got ahead of the eight-ball and pre-emptively followed Australia’s lead. Following continued pressure from Government over what they could or couldn’t sell and restricting the ways in which they displayed alcohol, stores took matters into their own hands.
They installed an internal wall to seal off the single area, cut a hole in the exterior wall, put a till in and set up a separate liquor store within their existing footprint. This “new” store was no longer part of the same liquor licence and traded as an independent liquor store. All of the restrictions on what they could sell and how they displayed alcohol no longer applied. Shoppers had to deal with making two purchases instead of one when doing their weekly shop but could finally buy beer again without being made to feel like school children in the naughty aisle.
4) The return of prohibition
Back in 2014/2015 the Ministerial Forum on Alcohol Advertising and Sponsorship recommended severe restrictions on alcohol advertising and sponsorship. These recommendations were eventually adopted over time leading to New Zealand becoming one of the most highly regulated alcohol markets in the world. The inability for producers and retailers to differentiate products by advertising their values and qualities led to them only having one remaining tool on which to compete with each other – price.
This led to a sharp price war which saw alcohol pricing revert to 1960’s levels and the peak of binge drinking rivalling the days of the six o’clock swill. No one knew what they were drinking so they drank whatever was cheapest. They bought it by the boot load and drank it like it was going out of fashion as it had no fashion left. The terrible spike in harmful drinking left the Government with no choice but to ban all alcohol and revert to prohibition. History repeated, bootleggers rejoiced and home brew finally completed its progression from nerdy hobby to hipster to mainstream.
Matt Wilson
Corporate Relations Manager, DB Breweries Ltd.
