The Market Will Never Lie to You

In our office, nearly every day, we get a pitch deck from the “next” Tito’s, Sophia, Yellow Tail, Estancia, Josh Cabernet, Fireball, Goose Island, Angels Envy, etc. Every- Single- Day. This is all positive as we are all entrepreneurs. We are all makers of something. if you are reading our regular column, and so many of you are. We, at BevStrat, are makers of go to market sales and strategy, and you the reader, are likely a maker/ supplier that takes a ton of pride in creating a drink or libation that gives you great pleasure. Our wholesaler readers sit on the convergence of where brands and sales occur and wait for the outcome.

So we get these pitch decks in our office, and we meet collectively if we think that the brand has legs in the USA market or China, Dubai or even Canada. We look at the rosé that is $5.00 USD too high because it comes from Europe when the American consumer wants to pay <$10. We look at the Latvian liquor that has such a unique customer demographic that it will be hard to sell it mainstream. We look at the Bloody Mary mix that has a label that my 11 year old could have made and therefore will not drive any shelf pull. Makers need to listen to the market, not the neighbor down the street, the banker that is financing them, and not the family member that says, yes! go for it. Makers need to listen to the market.

The market will never, ever, lie to you. EVER. It will tell you the hard to swallow truth in sales. Simply put, sales is the market’s response whatever you are trying to sell it. Wholesalers have a myriad of reasons why they take goods, and often times, selling them is not on that list. Retailers will take goods on the “hopes” of selling them or a promise of a rebate or for some other reason, sales of course being the number 1. Customers will purchase goods because they like them, their quality, and/ or their price point. Everyone in this paragraph has a reason to take your goods that do not directly impact you sans the customer. The market will tell you the truth.

The market will tell you if the price is right. The market will tell you if they like the label. The market will tell you if your packaging is on point, and if your brand meets their taste expectation.

Many of the readers are probably shaking their collective heads and saying that there are stop gaps all down the three tier chain to know if I have a winning brand. That is a silly comment:

• FOB’s (friends of the brand) will not tell you the truth. Bankers, neighbors and the like are people that are stacked in your favor and while they may like a product are not the mass universe of available livers that would buy your product.
• Wholesalers- take products for all sorts of reasons and some of them have nothing to do with selling it. Many wholesalers take brands to play defense against a competing wholesaler. Many wholesalers take brands to round out a portfolio need having nothing to do with your individual success.
• Retailers – the same. They will take brand to round out a category, fill a void, or some other reason. But…..

The market will be the deciding factor. We have clients that when given the data supporting 500 brand touches weekly and 5 cases sold, cannot understand how the ratio works. Well it is simple. If we show you 500 times a week and you sell 5 cases in market, your price, product, label or marketing sucks. Simple but true language. Sales occur where price, label, marketing, and quality all converge. That will never change. Tito’s sells best between 15-18 dollars rather than 25 dollars. This first price range is where all the metrics converge to cause a sale. As you look at your brand in market and receive your depletion reports or visit markets to get feedback, understand one thing. The market is available to you if you meet what the market is asking for. The market will tell you the truth about what is great and conversely what is bad about your brand. The successful brands listen and adjust. The unsuccessful brands are the ones that hang their hat on what the neighbor down the street said!