Maintaining strong relationships with customers, sales support and suppliers is
essential to the success of any project.
By Ian Perez
Many beverage alcohol brands tend to look toward complex strategies to overcome their daily supply chain obstacles. But it’s often the simplest strategies that are the most effective. The tips and tricks below can help brands navigate and avoid many supply chain challenges.
Relationship Building
Maintaining strong relationships with customers, sales support and suppliers is essential to the success of any project.
First, understanding your retailer’s promotional plan and schedule is critical, including upcoming sales promotions, marketing events and national holidays and celebratory occasions. This will give you a chance to anticipate and establish consumer demand and pull-through.
Second, you must be aware of what your individual sales representatives are doing on the ground. How much of their time goes toward opening new accounts versus building and supporting existing accounts? Are they programming their accounts with sell-through opportunities such as cocktail menus and store tastings? Having a congruent sales strategy will help you, as the brand owner, understand the rate of sales (ROS). This type of comprehension can only be achieved through consistent dialog, setting and adjusting sales goals, and advising on strategy.
Third, all this information then needs to be consolidated and communicated to flow regularly to your manufacturer, especially if you are co-packing. Getting a forecast ready and then not having the capacity to produce could damage the relationships that your sales representatives have forged. Out-of-stocks could lead to a loss of listing in stores and on restaurant menus.
Finally, regular contact with your packaging suppliers helps ensure your producer can make the products that your sales team has worked hard to secure. Understanding the producers’ timelines, calendars, holiday periods and annual closures can help secure continuity of supply. This will ensure that not only can you satisfy current demand, but also scale up and grow across the states.
Having a consistent dialog with your suppliers also helps navigate supply constraints of materials. You can either over-order or, potentially, pivot to an alternate component. Being a good customer and having a strong relationship with a good supplier is essential.
Embrace Innovation to Solve Challenges
Supply chain challenges come in all shapes and sizes. Sometimes they’re relatively short-lived, such as raw material shortages, tariffs or port closures. Others are longer term, including geopolitical events and climate change. Some challenges, such as the COVID-19 health pandemic and crisis, can even be once (hopefully) in a lifetime.
I believe that challenges lead to innovation rather than despair. When facing difficulty, such as a supply chain shortage, there is benefit to simply switching to an alternative bottle, cap, closure, can or whatever it may be. It can force you to think outside of the box and actually enhance the brand experience.
Facing a challenge head-on can lead to interesting innovations. Custom bottles, new pack formats and packaging concepts, and environmentally friendly materials are a few areas that lend themself well to creativity. These types of innovations can lead to a greater continuity of supply, more control of your supply chain, improvement of brand packaging and the potential to obtain new audiences of consumers. This, in turn, could provide additional sales as well as ensure the fulfillment of existing orders.
Secure Your Internal Systems
The size of your brand will dictate how you capture forecasting and demand planning. If you’re a small brand growing into a medium size, you might want to consider hiring a dedicated supply chain manager. Equipping them with the right tools, such as an Enterprise Reporting System (ERP), will greatly assist with decision making on ordering, reorder points, buffer stock levels and the like. While these systems can be expensive initially, they prove their worth in the ways they can integrate demand from customers all the way to the manufacturing side and adjust open raw materials orders to satisfy current demand.
If you’re not ready to commit to a dedicated employee or an ERP, there are companies that specialize in supply chain management and are available for outsourcing. These companies have experienced personnel who will keep track of raw materials and balance existing inventory. This lets you, the brand owner, focus on your area of expertise: making great products and building relationships with customers to grow sales.
The supply chain world can be overwhelming and unpredictable. Maintaining strong relationships, innovating even in times of difficulty and employing strong systems will set any brand owner on the path to success.
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Ian Perez
Ian Perez is the brand execution manager at MHW, a service and distributor in the US and EU, located in Manhasset, N.Y., providing back-office support for brands. He is responsible for MHW clients building new-to-world brands and helping clients with all their supply chain needs. Perez has worked in new product development, procurement and supply chain for nearly 15 years in the food and beverage industries. He graduated with a bachelor’s degree in food science and innovation and holds a masters degree in international procurement and supply chain management from UCD Michael Smurfit Graduate Business School: Executive Development.
