` Ways to Promote Success in 2021 - Andavi Solutions - Digital Collaboration Software for Beverage Alcohol Suppliers and Distributors

Planning for 2021: How This Year is Unique and Ways to Promote Success

GreatVines 2021 Plan Forecasting

If you scan the trades daily like I do, most of what you hear from earnings calls today goes something like this: “We have redeployed our On-premise assets and are focused on the growing e-commerce channel, increasing resources and focusing on digital shelf management”. The impact of this includes a reality that some positions will never come back and redeploying marketing dollars in support of digital commerce channels vs traditional wholesale is a certainty. How will this and the new environment impact your 2021 plan? You already know the process will look very different than prior years.

We are fortunate to have an ongoing dialogue with our trade, supplier, distributor and agency partners who are on the front lines of navigating these waters. Whether you have completed your 2021 plan or are in the process, we wanted to share a summary of what we are hearing on the implications of creating the right plan to achieve your 2021 goals. Much of what we heard is not new, as there continue to be absolutes in our industry. We’ve organized the feedback we gathered into sections for easier reading, a range from general considerations to impacts by channel.

Considerations for Your 2021 Plan

If your plan is focused on Historical Data, the environment that created it has shifted – fair to say it may not exist any longer! Consider mapping that same Historical Data with how the consumer, and maybe more importantly, how trade buyer decision making has changed.

Is your sales team empowered with the right tools to pivot from what was used to be very transactional (historical relationships and sense of loyalty, etc.)? Today’s buyers place less value on that metric than ever before. With precious few resources available, one must invest in positioning the right brand in the right channel.

According to the Wine Industry Financial Symposium’s annual executive survey, almost 49% of the 130+ respondents said they’re spending more on digital by reallocating other marketing resources. Another 18% said they’re spending more on digital while maintaining other marketing spend. What impact will the expanded emphasis of 3-tier e-commerce have on the trade, distributor partners, brand focus/spend and prioritization?

Distributor Partners

Recent webinars from industry leaders have confirmed a growing commitment from multi-state distributors of huge increases by retail trade in utilization of their 3-tier e-commerce platforms. It seems they also satisfy the need to provide ample resources for their business-to-business and business-to-consumer channels such as Drizly and Instacart. Platforms such as RNDC’s eRNDC, Breakthru’s e-com, and SGWS Proof Online, allow accounts to place orders 24/7, easily reorder, view account and invoice information, collaborate with reps on favorite items, and review and track deliveries. Does your 2021 plan include redeploying incentive and on-premise spend to activities that can drive this channel?

  • Leverage limited resources – With precious few resources available to invest in brands and activities (all brands are not created equal), is every budget tied to activities that will drive sales? Today’s environment demands identifying and emphasizing critical brands or SKUs that will drive Profit, Volume, or Positioning. Only a shortlist of items can include the expectation of being included in the monthly distributor ‘Focus’ or ‘Priority’ that are mandated down to their sales teams.

  • Fewer brands, more focus – Consistent with the theory of not all brands are created equal, it may be more important than ever to identify a brand’s activity objective, e.g. POD’s, or Velocity. If you provide no guidance, don’t complain when the results don’t match brand standards.

  • Inspect what you expect – You’ve heard it before, but even in their simplest form, Scorecards have an impact. Remember, volume isn’t everything. Consider measuring the velocity of those POD’s at three and six-month intervals. Once the data has exposed activities that drive distribution, volume or velocity, you must deliver consistent visibility, tracking, and accountability to your trade partners and yourself.

If you aren’t getting the same attention in this changing market, is it simply a factor of not having salespeople on the street? It may be a sign of a larger issue, one that was masked by the expanding market over years. Is it time to explore smaller distributors or alternatives that can make your products a success?

National, Club, and Chain Channel

As distributors migrate an increasing volume of orders to their order portals (e.g. eRNDC), there is less chance of non-authorized products making it to a menu or shelf. However, this may mask the ability to confirm compliance, promote volume or a brands longevity.

  • Recovery? – All agree that on-premise will be slow to recover and many national chain accounts will not reopen, many are predicting volume to be at least down by 50%. Now, more than ever, one needs to quickly identify who is surviving and consolidate funds against that set of accounts.

  • Less contact by salespeople – has resulted in a need for increased audit and compliance. Are you leveraging analytics to discover and act on gaps, and to apply resources against the plan?

  • Influencing inside/portal sales – Have you considered ways to motivate your inside sales teams and/or the direct order process?

  • Consumer demand – continues to drive grocery/club chain buyers interest. Consider leveraging other accounts, but be realistic as not everyone can be in accounts like Target or Walmart. Redirect incentive or OP channel funds to purchase syndicated data such as Nielsen or IRI. While the cost of deep data can be out of the budget, there are annual, quarterly, even summary level data options available.

  • Access to CRM and analytic tools – These tools are mandatory to gain insights into understanding of what’s happening in the market and the activities that drive success. Qualitative Account Attributes, like accounts offering delivery, can be leveraged along with sales metrics like distribution, volume and revenue to identify target accounts that match your requirements. Accessing this technology is not limited to the largest suppliers and distributors and has become compulsory.

E-commerce Impact

Due to growth in the channel and unique needs vs the broad market, larger organizations have developed dedicated e-commerce divisions. Every 2021 plan must include a clear understanding of those needs and the ability to deliver on the basics at a minimum.

  • Listing priority – Platforms may drive product selection on price and availability within a network of package stores. This format can allow consumers to be swayed into purchasing another brand. That means that the work you did to get the consumer to your site may be lost to another brand at the point of purchase.

  • Significance of white-label stores – In addition to considering the impact of the growing number of online platforms such as Drizly, etc., some brands are going further; choosing to sell their products from white-label shopping cart and store options such as Barcart, Passion Spirits, and Speakeasy. Orders from these platforms get funneled through a small group of retailers with substantial volume over the pandemic. Developing and smaller-scale brands with limited distribution and footprint may find these white-label sites a major growth option. Bottom line, does your 2021 plan include activities to impact this select group of package stores?

Key Takeaways

At best, historical data can be a guide for 2021. Your plan has to deliver enough value to the right brands and accounts that will achieve your goals. E-commerce is now a convenient standard, not an alien concept. Many in the industry have been forced to adapt, more quickly than they would have liked. Ensure your plan includes a process and funding to impact this at the partner and trade level.

Both distributor and supplier representatives must make the hard decisions on which brands to prioritize. There is simply not enough bandwidth to support every brand’s activity, volume, POD, or velocity objectives. Learn to choose wisely and maximize the available support on the greatest opportunity brands.

Be transparent with your partners, use scorecards and analytics to determine the potential for success and the cost of supporting a relationship that cannot, in the current climate, be mutually beneficial. Maybe it’s time to consider acting on available alternatives. Spend wisely, as consumer pull trends are driving super premium and comfort brands, and make sure you are spending strategically on those likely to succeed.

In closing, I think we can all agree with W. Edwards Deming’s quote: “Change is not necessary, but neither is survival.”

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