In the last 3 weeks I have traveled to Napa, NYC, Wisconsin, Chicago, Australia, Hawaii, LA, Phoenix and back to Chicago. I would love to write that I was seeing the globe with my family or that I was on a peace corps mission. Neither is true. I was meeting with clients to prepare for the 4th quarter of 2017. While summer is slow down time and take it easy time for most business, it is a time that we use to prepare the portfolio of for holiday selling.
43% of the business in the adult beverage space is done in the 4th quarter. 28% of that is done between Thanksgiving and New Years. Unlike traditional retail, the beverage business keeps selling up until the end of the year (EOY), so we basically get an extra week out of the consumer. A week more than say, “clothing or electronics” sellers.
We can look at this with different angles depending on what tier of the three tier you play in. If you are a supplier, the year is done long before EOY. Factoring in production run, lead times and the time it takes to distill, make, grow or brew your product, you are on a beach in Miami at this point. Please use sunscreen and apply it generously. If you are a distributor, you have more of a fight ahead of you. Distributors used to have holiday shows to showcase products and deals to the off premise/ on premise account world. Now, in this brave new world, that is replaced with chain buyer meetings in late September. The access to brands for the independent retailer is null as the distributor puts all the eggs in one basket and calls it Amazon or the like. The only time the retailer will hear from the distributor in this critical period is if the distributor needs to make case goals targets (CGT).
What are CGT’s you ask? In a not so little secret, and the reason why I am always busy at the office, is that distributors are basically held to major financial pressure and penalties if they do not hit CGT’s for the represented brands. Brands can switch distributors, reap financial windfall from the house and / or take a major chargeback against sales targets. All that said, in this period, the distributor protects the mother hen first and foremost and then will hit the base retailer accounts anytime after December 17, to make the needed numbers for survival and retailers can buy into this period with steep deals.
Finally the retailer. The lowly retailer has to hump all the way to NYE at midnight. Every sale matters and every purchase counts towards a profitable year. I remember in my retailer days that we watched the weather nightly for the last 30 days of the year. Not in a voyeur type way but rather in a dear lord, please do not let it snow, sort of prayer. We were in Chicago, and if it snowed and it stuck, it would majorly hurt driving traffic, and a bad or slow day in the critical Christmas season would have major implications on our net income.
The point of all this is that now is the time to prepare for Christmas, so that you are not praying it does not snow on your 4th quarter. Shelf sets, store resets, buying plans, and production runs are all NOW. Brand planning, selling strategy, marketing and nurturing your selling teams are all part of Holiday success. I would not at all call these the dog days. For the brands we work with, we call them the preseason for the season. This is when we get bugs out, get the right teams in place and make sure our suppliers, importers, and distributors are all in a position to play in the super bowl. My dad used to say that we had an all star team in retail, which we did, and they all performed in the holiday season. Every one of those teammates were “drafted” in the summer.
Play like a champion today and begin planning for December in August, not matter what tier you play in.