Courting local beer drinkers, Kroger Co. this month will stock Wiedemanns Special Lager on shelves at most of its stores in Greater Cincinnati and Northern Kentucky.
The move is another bid by the nations largest supermarket operator to tap thirsty customers driving the U.S. craft brewing boom.
More importantly, its the latest example of how Cincinnati-based Kroger drafts popular local brands to win loyal shoppers, beat the competition and bolster profits. So serious is Kroger about the shop local model that its being replicated in more than 2,400 stores across the U.S.
Beer is a wonderful opportunity for us it plays into a bigger trend of committing to local products, Kroger chief executive David Dillon told The Enquirer earlier this year. Beer plays into that, and were doing really well with it. Its all about selling more of what people want.
Store officials say regional brands inject local flavor into area stores and send the message to customers that Kroger gets them.
Shoppers just love Noosa yogurt at Kroger subsidary King Soopers in Denver. Kennys Key Lime Pie is a hit in Atlanta Kroger stores. Daves Killer Bread is devoured in Portland, Ore. area Fred Meyer and QFC stores two other Kroger subsidiaries.
In the end, Kroger says, the strategy helps the grocer stand out by offering a wider product selection that trumps the traditional lineup of national brand basics at other stores.
It may be working: Krogers local market share has grown to 40 percent from 39 percent in the past two years, according to industry tracker Chain Store Guide.
Not your father's Wiedemann's brew For local brands, landing on Krogers shelves is akin to an audition on American Idol. Before Oprah Winfrey declared Graeters her favorite ice cream, the brand got a significant boost from being sold in local Kroger stores. Now, Black Raspberry Chocolate Chip is available from California to Florida.
This is huge for us Kroger sells 60 percent of the beer sold in this market, said Jon Newberry, owner of the George Wiedemann Brewing Co.
Once one of the regions top-selling brews, Wiedemanns changed ownership several times over four decades with little investment in advertising to promote it. Production ceased in 2006, when the last brewer, Pittsburgh Brewing Co., went bankrupt.
Newberry, a former business reporter at The Enquirer, resuscitated the Wiedemanns brand in 2012 when he introduced and trademarked a rebooted recipe at several bars.
The original was not craft beer, but a typical American lager. Newberry says his Wiedemanns is formulated to appeal to consumers curious to try something different, but not too heavy or too alcoholic.
There are a lot of people drinking mainstream beer that are ready to try something with more flavor, Newberry said.
Founded in 1870, Wiedemanns roots go back to Greater Cincinnati and Northern Kentuckys vibrant brewing tradition powered by the German immigrants who settled here. At the height of its popularity, its advertisements were a fixture at the Cincinnati Reds Crosley Field.
Ultimately, the Wiedemanns brand suffered a fate that befell many other regional brews: Uber-brewers Budweiser, Miller and Coors expanded their distributions.
It became a budget, low-profit margin beer, Newberry said. In the end they only shipped it to Cincinnati and Northern Kentucky.
Local brands, a national strategy Now, the tide is turning for local brewers, said Terry Turner, Krogers national assortment manager for beer.
Craft beer accounts for 38 percent of Krogers sales growth in beer with the rest coming from new or expanded stores.
People like going to their favorite watering hole and drinking local beer, and they like the ability to buy that beer at their local grocery store, Turner said.
Cincinnati Kroger stores already offer a healthy array of other homegrown beer brands, such as Christian Moerlein, Hofbrauhaus, Hudepohl, Mt. Carmel and Rivertown.
Nationally, local brews now command 5 to 10 percent of shelf space in the beer section of typical Kroger stores, Turner said.
We make sure we call out local brands and build the section out from that, he said. Our rule is if youre brewing and bottling enough to supply us, we wont say no.
Beyond beer, Kroger offers local brands from Busken Bakery cookies to Queen City Sausage and Frischs tartar sauce to Grippos potato chips.
Analysts say sales not sentimentality are the drivers behind going local. In the past decade or more, the grocery business has been swamped by nontraditional competition as mass discounters like Wal-Mart have added food to drive traffic.
It resonates with customers, said Joe Feldman, an analyst with Telsey Advisory Group. It makes them feel a little less like just a cookie-cutter big national retailer.
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