At some point in life, you have earned the right to say that you have seen it all.
I am 50 years old, so I do not know if I am there yet, but I am getting there for sure.
With that, I have only known two channels to buy booze: on premise channel which is bars and restaurants and off premise which is liquor and wine stores. If suppliers wanted to sell their goods it had to be in those two silos and the accounts that fall under that umbrella.
2020 changed all that!
If you are a football fan at any level you will remember that during the second game of the 2001 season, Drew Bledsoe was hit by New York Jets linebacker Mo Lewis and suffered a sheared blood vessel in his chest, which almost resulted in his death. Replacing Bledsoe, backup Tom Brady took the starting position and led New England to the playoffs. That was the last day that Tom Brady was a backup quarterback.
This was a classic example of a Rudy moment. Just put me in coach, I am ready to play. 2020 was just the same, it was a “put me in coach” moment for apps and online ordering in the booze business.
Reserve Bar, MiniBar, Thirsty, Drizly, Saucy, wine.com, (insert your choice of name) wine club. They all had banner years. The joke used to be that the only person to make money at wine.com was the guy that sold them the URL. That story is old and dead, the new story is look at how the category has grown. Apps and websites were where top notch in consumer engagement, sales, revenue, net income, brand desire and stickiness. 2020 was a “put me in coach moment”.
2020 launched E-Premise.
Suppliers, importers, distributors all now have another outlet to peddle goods. Very much like the three-tier hierarchy that exists now, E Premise must be careful not the fall into the same model of favoring the strongest brands.
The best brands sell the most. The brands that sell the most get the most attention. The brands that get the most attention is noticed by the shopper and shopkeeper the most. So goes the beverage cycle.
What we noticed throughout 2020 is that the websites looked like a crowded beverage shop. The biggest brands had the best page placement. In a store the best brands (read highest gross margin) were stacked the highest. The right rail of a website was akin to the beer aisle in a store with ads and marketing. The intuitive AI shopper online was the salesperson in real life making recommendations.
These are growing pains for a new channel in an industry forever changed from Covid. Suppliers need to create new marketing plans, sales plans and goals to cover the virtual shopper. Conversely, these new sites and apps need to do a better job of leveling the playing field. What frustrates suppliers the most in the traditional three tier system is the best perceived brands get the most attention, the most presentations, the most deals and the most KPI’s for them. It becomes a self-fulfilling prophecy. That circle is very hard to break into for any new brand.
It would be ideal if sites and apps focused on new and unique brands to help level the playing field. New brands are the ones that need the support and screen time. New and unique brands need the share of mind that a website or app can provide. Catering to Miller Lite and Jameson will only continues their winning ways while continuing the struggle that many new brands have out of the gate.
Apps and Websites can be the equalizer in the battle for a new or shadow brand to “make it” and survive the critical first few years. You really never know what can happen when a brand gets a chance. No one knew of Tom Brady until Drew Bledsoe went down.
We can all help a new TB emerge from the sidelines and the E Premise channel can be the launch pad.
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.
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