Wal-Mart, Diageo Partner to Promote Liquor

Wal-Mart Stores has partnered with Diageo to develop new products and merchandising to boost Wal-Mart's liquor sales.

First up from the collaboration is a cream-based liqueur called Dulseda, created by Diageo at Wal-Mart's request, according to The Wall Street Journal. The caramel-flavored drink is slated to roll out nationally after testing in Wal-Mart stores in Arizona last year, the Journal reported. The two have been working together since Wal-Mart named Norwalk, CT-based Diageo its category captain for the hard-liquor segment last year.

Wal-Mart will triple shelf space in some stores, per the Journal. But its promotion policies remain conservative, with a ban on promotions outside the liquor aisle and on liquor ads in Wal-Mart circulars. Store managers are allowed to turn down alcohol P-O-P, so liquor distributors are meeting directly with store managers to present data to show how liquor sales help total store sales, the Journal reported.

Meanwhile, Wal-Mart's push on alcohol has prompted smaller competitors to pool their resources on marketing, according to the Journal. That could give liquor marketers a broad, ready audience for more P-O-P and merchandising support in a greater number of stores.

Alcohol accounted for a reported 1% of Wal-Mart's 2004 U.S. sales of $ 212.3 billion.

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