Hit the snooze button. Summer is in full swing and the market is slow. Slow in all the key markets that you would expect. NY, CA, IL, FL, NJ and TX. Our collective accounts and customers are traveling, vacationing, taking time off and while our buyers are chilling, we are sweating to get cases sold and new accounts opened. This is Summer in the beverage business.
With this time to reflect and think about the market the age-old question has been asked of me many times this week and with that…..my article has been born. Cases v. Places?
Back in my Sam’s days of retail it was enough for a brand to have a stacking at Sam’s. We were the biggest. We had the most share of wallet and the most attention. It was a case store and the common thought was to just get into Sam’s with a floor stacks and that will be enough; 1 POD (point of distribution) but 25 cases. #winning! This methodology was simple, and it worked. Sell the best stores only and you can build a brand that way.
Currently with the shrinking of the independent brand store and the independent retailer the current name of the game is POD’s (points of distribution). That way if you lose a Sam’s type store, you are still in business, you are still in the game. It is better now to sell 1 case 25 times than 25 cases to 1 store. Or is it? Below in a pro / con list that can argue either way is good. Love to hear your thoughts.
PRO of CASE DROPS
- KPI’s of sales easily met
- Easy to deliver and deal with thus making it more profitable for distributor
- Can aid in building brand because of visibility and association
CON of CASE DROPS
- Wal-Mart syndrome, one YES can easily be one NO and kill the brand
- Increased eyeballs can mean downward pressure on price and GM% in exchange
- Light house accounts generally don’t support brands but rather ask brands to sell themselves
- Increased cases on floor dividing attention
PRO of POD’s
- Losing an account will not hurt you
- More likely to build a brand with account support
- Smaller stores can hand sell items
- One case account buyer can turn into 5 case buyers with consumer pull
CON OF POD’s
- Slow depletion rate
- Price fluctuation by account
- Longer for sales person to hit their goals and bonus generally
As a sales company we were and are always looking for large “drops” to hit set goals for our brands. The market is shifting to a more understanding and compassionate supplier. A supplier that wants to build brands slowly and to be sustained by the market is a supplier that is really setting themselves up for success. Getting into ABC, BevMo! or Total is a dream for a brand but let us not forget that getting “IN” to Total still requires you to be sold out of Total.
Whatever your brand goal is; Places or Cases, it should really be a fluid goal and adjust to mirror the region you are selling. Some places like AZ are chain and grocery driven where IL or NY is independent driven thus requiring a different strategy. Both goals work but both require different sales methods and different go to market strategies.
Continue having a wonderful summer and happy selling! We will see you on the shelves.
Three Tier Talk
by Brian Rosen, www.BevStrat.com
Brian Rosen is Former CEO of America’s #1 Retailer, Sam’s Wines in Chicago, Former Partner at PricewaterhouseCoopers in Retail and sought after retailer consultant.