Home Wine Business Editorial Three Tier Talk Brian Rosen 9th Annual Predictions – 2020 Edition

Brian Rosen 9th Annual Predictions – 2020 Edition

283
0
Advertisement

Here we are again! As the year draws to a close there are so many things happening in the adult beverage space that our communal head should be spinning. From Cannabis to RTD to continued shrinking distributor reach to expanding 3PL momentum, we should all be fully confused. When the year started, RNDC had no online ordering portal, White Claw was the actual claw of a snow bear, and drinks with weed was not a thing. Rabbit Hole was privately owned, no one heard of Levantine Hill Wines outside Australia, and the idea of a frozen rose’ was just an idea. So here we are again, and the year is closing out. The predictions that I have put out in years past have rung true on many, many instances and we look for the 2020 predictions to be the same. Here is a list of what we feel 2020 will look like for our lovely industry.

Small Brands will continue to be challenged

I love the small guys, the underdogs, the outsiders. But big distro does not as much. With the shrinking of the distributor landscape the small brands are challenged for share of wallet and eyeballs from the consumer and the account. Brands are being born at a high rate of development, yet the consumer market is not growing at the same rate. Creating a wine, beer or spirit brand is not creating the drinker, it simply creating the brand.

Weed, CDB and everything in between

There is not a day that goes by where weed, etc. is not a lead story in some trade magazine or online publication. My home state of Illinois will be recreational legal on 1/1/2020 and the full range of liberal states will be soon to follow. Weed infused drinks are here and growing. BevNet, Beverage Trade Network and others have sold out conferences on cannabis drinks and they will certainly be in retail soon enough stealing wallet share from low grade beer, wine and liquor.

The sleeper here however is that we predict that mid-level beer, average wine and base distilled spirits will suffer. Each of the above trade groups have come out with a “little to no effect” on their sales degradation but I say no. The consumer looking for a session able activity cannot do it all. It is either take a puff or take a drink and it will not be both. One is zero calories and little hangover. Average quality brands with no point of difference will suffer with slowing sales and loss of consumer market share.

The Continued Rise and Strength of the Third-Party Logistics Providers

For all the reasons we know, and we write about, companies like MHW and Park Street will become even more influential in the ecosystem of coming to market. Distributors are too big and there are too many brands. Brands that want to come to market quickly without too much politicking can easily choose a 3PL to import and distribute them. It is easy, quick and effective in 4 of the largest consumption states. Remember there are 10’s of thousands of brands registered yet the same 500 brands occupy consumer pull patterns.

Eco Wines/ Earth Friendly Brands

It matters. We know it matters. Consumers buy with a conscious. Period.

Nice to know you White Claw

First mover advantage has well…first mover advantages. Before any potent competitor had a chance to mobilize White Claw had owned the market. That is gone. Go into any store and there are 5 case stacks of 5 different brands of a White Claw copy. The king is dead, long live the king.

Online retail ordering platforms will remain a novelty.

I have said this for 5 years running and it has proven true. There are not many retailers in America that when making a shelf set, will pull out there iPad and place orders. The booze business is and always will be a business where the buyers need to touch, taste and feel a brand before investing the brand for purchase. Hard to buy a car without a test drive.

Woman/ Woman/ Woman

Woman owned, cultivated, distilled and brewed brands will have an ever increasing place in retail off premise and back bars everywhere.

3rd Party Sales Companies Matter

BevStrat and companies like BevStrat will continue to be more of a player in the selling game. For all the above reasons, but mostly, because distributors will not build brands, selling teams are needed to support sales. Suppliers need help and suppliers that are willing to invest in their success will have said success. There are two ways it can go. 1) sales happen from these 3rd party activities or 2) the distributor kicks into gear because the brand has invested in their success.

Say so long to 2019. What a year and there is so much to come in 2020. Invest your brand dollars wisely and push into market aggressively. This is a business where trends are hard to spot but effort is not.

Happy New Year to All!

Brian Rosen

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.
EMail: [email protected]
Phone: 800-953-1312
Web: www.BevStrat.com

More information and articles by Brian Rosen

Advertisement