Walmart is overhauling its adult beverage aisles to bring in more hyper-local craft beers and high-end wines and spirits.
The company is making the changes because Walmart shoppers are demanding more premium alcohol options, according to Jason Fremstad, VP of adult beverages for Walmart US stores.
“There’s been a significant shift in our assortment this year to make sure that we are not just taking care of our customers with all the core offerings they expect, but really getting into that premium and innovative assortment that we’re really not known for at this point,” he said.
Walmart’s “core offerings” include domestic brands such as Bud Light, Miller Light, and Coors Light, he said.
The products that Walmart has started leaning more into include hard seltzers, hazy India pale ales (IPAs), low-calorie IPAs, seasonal beers, canned wine, and more premium brands of wine and spirits, such as Buffalo Trace, Decoy, Justin, and Veuve Clicquot.
Walmart bought a single barrel of bourbon and it sold out in six days
In one recent experiment, Walmart bought a single barrel of Buffalo Trace bourbon for one of its stores. The store sold out of bottles from the barrel in six days. (Bourbon that is bottled from a single barrel is considered more premium than bourbon that is mixed together from multiple barrels).
“We got great feedback from customers, so that’s something that we’ll continue to do more of,” Fremstad said of the single-barrel offering.
The company has also been working to add more craft beers to its stores, in part through “well over” 100 meetings with local and national craft suppliers and brewers, he said.
“We actually localize our assortment down to the store level,” Fremstad said. From consumer research, Walmart has learned the importance of carrying beers from shoppers’ neighborhood breweries in its stores.
“The further that your store is from a craft brewery, the less important [their beers] are to our customers,” he said.
Customers appear to be responding positively to the beer-selection changes.
“What we define as local is what literally is driving our craft business,” he said.
Betting on a surge in tequila growth
Walmart’s beverage-aisle overhaul started in the spring and will continue well into next year.
In the meantime, Fremstad and his team are closely watching what Americans are drinking, and trying to distinguish between trends that might be short-lived and those that have staying power.
“I would say the growth of hard seltzers has caught us all by surprise,” Fremstad said, referring to the surging popularity of hard-seltzer brands such as White Claw, Truly, Bon & Viv, and more.
“The growth that has come over the last few years in hard seltzer is phenomenal,” he added.
Fremstad said he expects hard-seltzer sales to remain strong, due to a “a large customer base that really wants to enjoy an adult beverage that’s low on calories and low on carbs, but is not light beer.”
Other spirits he expects to see continued growth in include sparkling wines, rosé, and bourbon.
“Sparkling wine continues to grow, and then from a spirit standpoint, I don’t see bourbon slowing down,” he said.
Fremstad is also betting on a surge in popularity for tequila.
“I think the one spirit that nobody talks enough about is the growth of tequila,” he said. “I mean tequila is growing incredibly fast – and really the premium tequila, not your college tequila.”