– Brian D Rosen.
I have been on the road for most of the summer; Napa, NYC, Colorado, Europe, and the budding metropolis of St. Louis, MO. All of it has been work related, and all of it has been in our beloved alcoholic beverage industry. The beauty of being a guy that fixes businesses in the alcoholic beverage space is that there is no shortage of things that need fixing. We look at archaic laws, misinformation, and basic lack of broad based knowledge, and there is plenty to keep my team and me busy. Whether I am working for the globes biggest brewery in STL or a small importer in NYC, one thing never ceases to amaze and astonish me.
Our whole business, the entire alcoholic beverage business relies on ONE single thing for success. Without this one item, this seemingly simple act happening, we all fail, and I am working at the local car wash, where my utterance of the phrase, “do you want a wax” will come to personify my existence.
That one single thing is the End User Engagement, or as it is known in popular circles; will the customer buy our wine, liquor or beer. That’s it! That is the one single thing that will define success in both on and off premise. It does not matter which of the 3 tiers you play in and support. Will the customer buy it, is the only question that matters. If you are a winery, distiller, or brewer you have three customers; the wholesaler, the retailer, and the end user. If you are a distributor you have two customers, the retailer and the end user, and finally if you are the customer you have only your soul to please.
It is really that simple. Yet, I spend the majority of my time, and gratefully so, teaching and educating all three tiers on how to communicate with the tier below.
I was fortunate enough to keynote at the Wine Industry Technology Symposium last month in Napa. I sat through a presentation about how a major, major wholesaler was spending millions on bottleneck tags, so the wine could stand out on the shelf of the retailer. I heard another diatribe on how customer data shows that if we change the label from off pink to less off pink, we can sell 1000 more cases per week. Someone else spoke about trends from winery to distributor and making the transaction smooth and timely. All good and valuable info. HOWEVER, after 30+ days on the road and working with 10 clients this summer, I have not heard the following…
How can we get the retailer to buy and sell our goods?”
It was absolutely amazing to me that the retailer, the off premise hub of distribution remains as rare of a focus as the Albino monkey of Africa. In fact, after Googling the Albino monkey, I found that there is actually a lot of knowledge and learning’s about the species. The retailer seems to be a more rare breed.
This is what I know. There are nearly 120,000 off premise liquor licenses in the USA. With all the big box chains and super stores that are out there, that leaves roughly 115,000 independent retailers that can and possibly will sell your goods. The problem is that they are a fragmented bunch, they are incredibly hard to sell into and communicate with, and because of that, we all leave them alone.
The distributors do not have the bandwidth; that goes for the breweries and the distilleries as well. We are all forced, as a collective group, to kowtow to chains, mega box, and regional players to get the cases sold that we need sold to make a living.
We at Rosen Retail maintain that the real opportunity is in the others, the outliers. We use the phrase regularly, “is it easier to date the model or the model’s sister?” We all know horror stories about having Wal-Mart as your biggest client. One day Wal-Mart will say, “No thank you,” and the next day you are out of businesses. Having a business model that is highly dependent on regional chains, mega box, and super stores will lead to lower gross margin for you, more dependence on price elasticity, downward pressure on price, and less product in the general market.
I write this because I have clients in all three tiers, and I can tell my readers with 100% certainty, if you want to have a more holistic look at your business and the 3 tier system as a whole, then you need to look not only at your packaging, but also how to reach the end user the easiest without giving up margin in the process, or worse, have your margin taken hostage by the very stores that you enabled to begin with.
Look at the influencer level of retail and wholesale, you will have an easier time selling goods, selling consumers, and having a voice on a crowded shelf.