As the world embraces technology, the wine and spirits industry must catch up to other consumer product categories in adopting technology, data, and analytics, potentially hindering its growth and profitability.
The Achilles heel of the wine & spirits industry
As 2023 comes to a close, there’s a glaring weakness and vulnerability in the industry: too much emphasis on the product itself and insufficient attention on leveraging data and technology to accelerate sales.
A great product in a great package merely gets you to the starting line. If brands want to compete and win in this highly competitive, ever-consolidating market, they need to bring more.
We get it. The products produced in the wine and spirits industry are far more “sexy” than other consumer product groups. It’s easy to become fascinated with the process and the product. But when it comes to SELLING it, too many companies are leaving out the real difference-maker, which is the less-sexy component of solid business acumen.
The secret to gaining share in a declining market
This past week, there was much press about the trends in depletions for wine and spirits. According to SipSource, the twelve-month rolling data shows wine and spirits depletions down a combined -3.8 % (wine is down -6%0).
Even in the face of these macro trends, individual wine and spirits brands can still gain market share if they learn to leverage technology, data, and analytics.
The key to gaining market share is a better understanding of who to sell to and how to sell to them. These insights exist – but only for companies leveraging the correct data and sales execution software.
Who to sell to is about understanding your ideal customer and how to reach them. “Customers” in this context are on and off-premise accounts.
How to sell to them is about backing away from a features-and-benefits approach to sales and instead bringing value to the business relationship.
To execute this one-two punch, wine and spirits brands must master the business side of the wine and spirits business. We’re talking about data and analytics here.
Keys to leveraging a data-driven approach
In the wine and spirits industry, adopting a data-driven approach can lead to:
- Increased sales
- More efficient use of marketing spending
- Enhanced customer satisfaction
- Increased profitability
Data-driven decision-making is a strategic approach involving data and analytics to guide business decisions and actions.
When collected, analyzed, and interpreted effectively, data can provide valuable insights and inform better choices (deployment of resources).
There are four critical areas to unlocking the power of a data-driven approach to your business.
1) Data collection
This is the crucial first step in employing a data-driven approach to sales and marketing. Two of the most critical data points that must be collected are:
- Market data
- Customer data
We know of no other way to capture and store these insights than the commitment to using a cloud-based, mobile-friendly CRM system.
Here are some of the data points to collect from your CRM system:
- Which states and markets hold the most potential for your brands? For example, 51% of all fine wine volume is in nine states. 76% of the volume is achieved in 19 states. Having this data at your fingertips is critical to leveraging limited time and resources.
- What is the “complexion” of each market (i.e., chains versus independents, on-premise versus off, seasonality, etc)?
- Which accounts are capable of the highest volume? The 80/20 Rule is REAL! Your CRM system must pre-load the “target accounts” so you can track progress against them.
Let’s say you produce a high-end Mezcal. First, you must know which US markets index the highest for Mezcal consumption. Then, you need to know which types of establishments heavily emphasize agave-based products. Finally, you must identify precisely which specific accounts you should target. The data will show you where to hunt.
2) Data analysis
Once the data is collected, it must be analyzed to extract meaningful purchasing patterns, trends, and correlations.
For example, say you are launching a wine brand with a new lightweight bottle that dramatically reduces the carbon footprint of your winery.
You’ve gathered all of the data you possibly can from various sources. By analyzing this data, you can gain leverage insights such as:
- What type of trade buyer would be most interested in this packaging innovation?
- Which markets have high concentrations of eco-conscious consumers?
- What key messages will these prospects (trade and consumer) most likely respond to?
- On what social media platforms would you typically find them?
- How do trade buyers want to receive more information about innovative wine packaging (email, social media, organic search)?
You can deploy your resources (time, people, and spending) more efficiently by having the answers to these questions and more.
In the age of AI, even the smallest wine or spirits company can uncover insights that will help them get closer to the “bullseye” of their target market.
3) Informed decision-making
The insights you gain from your analysis can then be used to inform better decisions, such as:
- How many salespeople do you need, and in which markets?
- What sales roles should you put on the playing field (street reps versus distributor managers, and in what ratio)?
- Where can you aim your trade marketing budget with the maximum effect?
- How should you price your products?
- How should you forecast growth?
- Which brands are your strongest competitors?
- What new products or line extensions should you plan for?
- And much more!
The key to accelerating your sales is FOCUS, and having a disciplined process combined with the right sales execution software will lead you to more significant sales effectiveness.
The potential sources of data are myriad and include:
- Your in-house data
- From your distribution partners
- From syndicated data
- From existing customers
- From potential customers
If you do not currently have the right people to do this work, much of this can quickly and affordably be outsourced to for-hire experts like Andavi Solutions.
4) Continuous improvement
Data-driven decision-making is an iterative process. It involves regularly collecting NEW data, refining analysis methods and tools, and adjusting based on these ongoing insights.
A commitment to continuous improvement enables wine and spirits brands (as well as their distribution partners) to adapt to changing market conditions and customer preferences (both trade and consumers).
Data holds the power to change the way sales teams think and behave.
As the cost of acquiring new customers increases and consumer preferences change, wine and spirits brands have little choice but to position themselves in a way that sets them up for success and creates separation between them and their competitors.
In the end, it all comes down to one thing: execution.
This emphasis on data collection, analysis, improved decision-making, and continuous improvement won’t amount to a hill of beans without a serious commitment to execution.
What do we mean precisely by “execution?”
Excellent execution of a sales team relies heavily on seven things:
- A data-driven approach and strategy
- Setting clear objectives
- Sales team alignment
- Building the right culture
- Training and skill development
- A clear understanding of how to manage the “opportunity pipeline.”
- Constant monitoring and adaptation
Not one of these seven components is dependent on product knowledge. Every last one of these points is utterly reliant on technology.
In the face of a shrinking market, the advantages will belong to the wine and spirits brands that leverage data and technology to accelerate their sales and efficiently use their resources.
If your grapevines are suffering from disease, you call in an expert viticulturist.
If the fermentation of your whiskey mash is stuck, you call in a distillery expert.
If your sales team is underperforming, you call in a sales execution expert!
Most wine and spirits companies have the product-knowledge piece down cold. They have the “story” memorized forwards and backward.
But few truly understand how to get their sales engine cranking at full throttle. It’s OK. You’re not alone. Let us help!
ABOUT ANDAVI SOLUTIONS:
Andavi Solutions is building an integrated suite of technology solutions to provide insights and drive superior decision-making and ROI across the beverage alcohol and CPG supply chain.
Our Vision is to invest in leading software and technology companies, partner with best-in-class management talent, accelerate innovation and build an integrated technology platform providing connected insights to suppliers, distributors, and retailers.
Reading and sharing this article with your team is a significant next step.
At Andavi Solutions, we have the knowledge and resources to help your sales team. We invite you to reach out today!