The Advantage Goes to the Brands
I have been at this game for a long time. I have gone from retail big box CEO, to Managing Director at PwC in Wine, to Trade Marketing at Anheuser Busch, and some minor stops along the way. When I came up in the business, spoken like it was a farm league and then the pro’s, it was a simple business. There were suppliers, wholesalers, and retailers. That was it! That was the whole game, and it was simple. There were no choices, no menu of services that I could choose from on an as needed basis. It was buy a product from the distributor of record, who sold it on behalf of the supplier, and we, would in turn sell it to our customer. Those days are gone baby gone.
What is happening now is the creation and killer success of LibDib and others, the self distribute states proliferation, and the expansion of the 3PL world is that now! Finally, you can choose what you want off a menu for your brand’s needs. This is a smorgasbord of choices, flavors and options. Big distribution sees this on its landscape, and it means lost revenue, lost brands, and the lost option to find the next winner. My 17 year old would say this is exactly what “Chance the Rapper” did. For old people please Google it. He bypassed traditional music distribution channels and sold all his music via the web. No giving away margin for him, no ma’am and sir, he said, I have the talent, and I just need a way to get to the end user. This is no different at all than what is happening now in our industry.
We at BevStrat envision a day, that has arrived already. As a brand owner you can pick the state you want to be in, pick your distributor, pick your warehouse, and pick your sales team. You can do all of this for often LESS than the 25-45% that a distributor will charge you for the same feature. The distributor will say that they offer all the sales people and all the marketing and all the compliance, and that is true, or is it? We have established in this column that my readers are not Cambria and Chopin, but rather the small maker who is absolutely on the bottom of the pecking order for the distributor. So while they say “we offer it all,” the reality is that they offer it all to the top 300 brands. Not to you and not to us.
If I were an independent winemaker, distiller, or brewer, I would absolutely look at my options as I go to market. I would choose CA, FL, IL, NY, TX as those are the markets where the majority of the US consumption occurs. I would chose my distributor in said markets, LibDib, Park Street, whatever. I would choose my warehouse and delivery like San Gabriel Valley Warehouse in LA or Seaman’s in NJ, and I would choose my independent sales team like BevStrat or similar. Do the math, it looks like all that together can be less than a gouging distributor charge for the same services.
The world is changing, and with technology any brand can be their own boss. Think of food trucks all over this country. Food trucks came into being because restaurant leases are expensive, customers do not want to come to a specific location, but rather want the food to come to them, and the consumer wants to discover something new and cool. How is that different than the wants and needs of the independent brand? How is that different from Chance the Rapper, as he wants to bring his music to his fans? It is not.
Order off the á la carte menu beginning now as the pre fix menu is no longer as appetizing.