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Among front-end categories in the drug store channel, beer finishes somewhere ahead of stomach aids, but slightly below pain relievers in terms of total dollar volume. While at times the three are directly related, the fact remains that drug stores capture a significant share of the total retail market for stomach aids and pain relievers, but rank far below other channels when it comes to sales of beer.

According to the ACNielsen Homescan Consumer Facts 2004 Report, drug stores capture only 5 percent of dollar sales across retail channels where beer is sold.

Attracting and keeping this customer presents a lucrative prospect: According to ACNielsen, 42 percent of U.S. households purchased beer at least once in 2004. Greater than two-thirds of those shoppers made repeat purchases.

While state laws vary and not every drug store is able to carry alcohol, beer nonetheless represents a $1 billion-plus category in the drug store channel, up nearly 2 percent compared with the year-ago period, according to ACNielsen data for the 52 weeks ended April 16.

Mirroring the phenomenon in carbonated soft drinks, where diet soda is buoying sales in the category as consumers move away from full-calorie to low-calorie versions, light beer also is contributing about half the dollar volume in the total beer category. The light beer segment finished the same 52-week period with sales up 2.3 percent to $556 million, according to ACNielsen.

Heineken USA this month will roll out its new Heineken Premium Light Lager to four U.S. cities, including Phoenix, Dallas, Tampa, Fla., and Providence, R.I. The introduction is consistent with Heineken's strategy to capture the growing share of the premium import specialty segment of the U.S. beer market.

When it comes to beer, drug stores are in the unique position to tap a customer base that's already in the store: baby boomers.

"People forget that at every junction of their life, boomers have had a tremendous impact on industries," said Matt Thornhill, president of Richmond, Va.-based The Boomer Project. "The wine boom is because baby boomers' palates have changed as they went from 20 to 30 to 40. The growth of microbrews and handcrafted beers has coincided with that."

Thornhill said if drug store retailers want to cater more to baby boomers, they should make sure they have in stock a greater than normal percentage of light-beers, handcrafted imports and micro brews.

The flip side is, however, you may not do the same volume," said Thornhill. "My advice is if boomers are already in your store, don't think that they won't buy beer because they are out of the beer market. They are not out of the beer market. I would add more SKUs that will appeal to the older consumer."

Drug store retailers also stand to benefit by appealing to women, who also buy beer--though you wouldn't always know that from looking at most beer marketing--either for themselves or for their husbands or boyfriends or for planning a party.

Tracey Mason, director of global innovation at Beringer Blass Wine Estates, offered some general suggestions for how drug store retailers can better merchandise and market alcoholic beverages to appeal more to the customers shopping their stores.

"If drug stores approach the business in a way they approach everything else," said Mason, "if the [channel] becomes more personal with the business, if they approach it the same way they do pharmacy in the sense that they get to know consumers and understand their needs," retailers could get women to think of drug stores as more of a destination for beer, wine and other alcoholic beverages.

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