Something big started happening around halfway through 2013. The number of craft beer businesses really started to boom and new brands started to flood the market. The term “SKU rationalization” was introduced into the vocabulary of distributors and retailers throughout the US. The battle for tap handle placements became an unspoken war among brand sales reps. The hopes of securing shelf or cooler space for your brands in multiple package formats were dashed away as our competitive landscape grew by almost two brewery openings per day.
Ultimately this movement would change the course of how we sell beer in the wholesale market that continues even today. Though our industry has unfortunately lost quite a few brands this past year due to the pandemic, a hyper-competitive wholesale channel is something that breweries still struggle with on a daily basis. The continuous maturation of the craft beer industry is leading us down a path of specialization, and if you don’t course-correct now, you run the risk of falling drastically behind your forward-thinking competitors.
One of the best ways to combat increased competition and market saturation is to take a hard look at how you are managing your sales efforts. Your sales plans need to be specific and strategic. You have to know what your unique selling propositions are and what differentiates your products from other brands. You’ve got to persuade your customer (beer buyer/decision-maker) that your brand is special, stands out from the crowd, and offers unique benefits to their end consumers that are superior in comparison to other craft brands. You’ve got to understand pricing strategies and marketing techniques. And you need to utilize sales data to craft strategic sales plans that get your beers into the hands of your target audience.
These are the new tricks in sales that the old dogs of the beer industry must learn in order to survive.
For the past handful of years, brewery sales representatives have been high-fiving and back-slapping each other, enjoying the luxury of craft beer’s novelty and upward sales trends. Back in the day, if you even uttered the words “local” or “craft” to a beer buyer, the placement was almost guaranteed. Not to mention those two kryptonite-like words that any buyer with shiny object syndrome craved to hear – “limited release.” New became the little black dress of beer sales – irresistible to buyers and the default sales pitch of reps across the US.
Sales reps have also enjoyed a somewhat short sales pipeline for quite some time. Toss your buyer a sales sheet and some samples, show up in person a few times, and bing, bang, boom, you’ve got yourself a brand new placement. But enter 2017 and beyond, with an emphasis on the 2020 health crisis, and the situation is drastically different.
Selling beer in our modern marketplace means you’ve got to work harder for every sale.
Your sales funnel, the scientific process of converting an account from non-buying status to buying status, is much longer than it used to be. In the past, a typical sales rep could secure a brand placement with about 6-10 “touches,” aka interactions or sales calls with a retail buyer. That number has almost doubled, with most placements taking 12-20 touches before today’s buyer will commit to certain brands.
Why is this happening? The rising influx of competing brands in the specialty beer space, the bandwagon effect of breweries not knowing their unique selling propositions, and the onset of the global health crisis that has made buyers extremely risk averse.
So even though the situation seems pretty grim, brewery sales representatives can still make headway in the market, it just takes a little bit more finesse and elbow grease. Acknowledging our modern challenges is the first step that you can take toward improving your wholesale channel sales. Realizing that you can’t continue to sell beer the way that you have for the past 3-5 years is a vital part of revamping your sales plans.
The second step is to approach your market strategically. “Spray and pray” should not be your sales plan. The old adage of “pounding the pavement” and “knocking on doors,” won’t cut it these days.
You need to have a specific sales plan, with measurable sales goals, and distinct purpose for all your sales calls.
Market activities should be calculated, not ad hoc. And you should be taking advantage of technology tools to help you gather the data you need from your accounts and your buyers. A reliable CRM (customer relationship management) software tool will provide you with the ammunition you will need to gain a competitive advantage in our dynamic beer landscape, as well as a reliable way to collect and analyze customer sales data.
Lastly, you need to pay attention to specialized data. Internal sales data like volume reports, points of distribution, non-buying account lists, and gap reports can help you add incremental sales in your territory when you’re out of ideas to boost sales and need to reinvigorate your account list.
Customer data from your CRM will allow you to establish a strong, long-term relationship with your buyer that can survive even the worst market conditions. And keeping up with market trends through scan data and industry publications will allow you to understand our market no matter what the conditions are.
Don’t forget, our industry thrives on consumers buying our products, so the more you can understand what people are spending their money on, the better you can understand your buyer’s business model and how they in turn purchase products for their end consumers. Utilizing all this data allows you to establish yourself as an authority figure in the eyes of your customers, which strengthens your relationship with that account, and in turn, leads to more sales.
If you’re struggling to figure out how to increase your sales without that shiny, new beer or how to push your core items, you need to take a hard look at your own sales tactics to see where you can make adjustments in your approach to the overall market. The beer market is different now, it will continue to change as we move through the maturation of our industry. The best way to increase sales is to ensure that your sales tactics are evolving as the market evolves.
Julie Rhodes is the owner of Not Your Hobby Marketing Solutions, an educational services company that teaches sales, marketing, and management tactics to growing craft beverage businesses through industry-specific webinars, digital courses, and coaching programs. Find out more at NotYourHobbyMarketing.com or contact her directly at [email protected]