Oct 092018

There is no doubt that the beer business has many convoluted laws governing the industry.  The law dealing with beer packaging, however, might take the cake.  Take, for example, the law that required Florida and Texas to implement 12-ounce packaging restrictions.  In Texas, a beer with 5.0% ABV or less could only be sold in either a 12-ounce package or a 32-ounce package. The law stated beer of that ABV had to be in a 288-ounce case.  Schlitz, thinking outside the box, came with a 12/24 ounce can.  This package turned out to be a huge success for Schlitz.

So do creative packages like Michelob’s teardrop bottle aid in sales?  The Michelob bottle and Corona’s clear longneck bottle might be considered the two most successful packages in years.  Even with the success of the Michelob, Schlitz, and Corona packaging, however, these containers two of them are long gone, and only the Corona packaging continues today.

A couple of years ago, ABI increased the can volume from 24 to 25 ounces in their single serve c-store cans, thus providing the consumer with an extra ounce of beer for the same price.  Perhaps this technique has not worked like no other major brewery has followed ABI’s lead.

The c-store trade channel which has long been dominated by both AB and MC has now become a target of the craft industry.  In recent years, this channel has seen Constellation Brands, with their single serve offerings, chip away at both the AB and MC’s market share.

Both Texas and Florida changed their packaging restrictions years ago by eliminating the 12-ounce requirements, thus opening the door for imports to move from their .355 ounce packages to their .33 (11.2 ounces) package. This 11.2-ounce package is now used worldwide as it is more convenient for international breweries.

Crafts have discovered the 19.2-ounce package.  By reducing the amount of liquid in the can or glass container, as other CPG companies have done, the volume can be lessened instead in lieu of increasing the PTC. As an example, the product might be in a 12-ounce product but instead of a price increase, the product is now an 11.2-ounce package.

Crafts are offering their beer at a PTC near or at the domestic price, but only giving the consumer a 19.2-ounce package versus a 24-ounce package.  Everyone but the consumer wins with this model.  It becomes incumbent on the craft brewer to prove that their beer is worth the cost versus a larger size competitor.

One wonders how these crafts would do if packaged in a 24-ounce bottle/can when competing against the main domestics or imports?  This c-store trade channel is one of the last remaining strongholds of the domestic premiums.  If these crafts can steal market share from the big boys, then the 19.2 package wins.

Sometimes life gives us lessons sent in ridiculous packaging.

 Posted by at 6:00 am