Thursday, December 04, 2008
Tuesday, September 16, 2008
Even though I am no expert, I firmly believe that our country is in the midst of a "great recession". Feelings of hard times ahead abound. With our sagging economy, employees in the beverage industry are becoming more and more unsatisfied with their present employment. Many face cutbacks in salary and deductions in their paychecks from the rising cost of fuel, freight, insurance, and products. Beverage distributorships are facing tough times. Many are carrying a large amount of debt and others are trying to take added costs out of their systems. We will find in the future that a large amount of new beverage company suppliers will start losing distributors because of the higher costs of keeping inventory and low turnover of these smaller brands. Large beverage distributors today want brands and packages that turnover quickly, have decent margins, and are not labor intensive (or brands we don't have to hand sell). This is a tremendous opportunity developing for entreprenuers wanting to enter the beverage business.
If you are an employee with a beverage distribution company and you are unhappy with your present employment, you have a few decisions to make:
- Stay in your present position and be glad that you at least have a job.
- Go back to college and get the education you need to better yourself.
- Find employment in another field of work.
- Be proactive, go out on your own, and start your own beverage business.
I have some employees that do nothing but complain. Complaining gets in the way of progress. They are offered sales incentives and extra cash for driving results, and most can't (or are too lazy to) meet simple quotas. Why stay in a position that you are not happy in and waste not only yours, but everyone else's time? Is it a level of comfort, is it the only skill you know, are you lazy, do you like to be miserable and make the people around you miserable. I think it's a combination of all the above with a high level of insecurity and unsuredness about themselves mixed in. If you don't want to be a part of a team in a sales-oriented, results-driven business then you need to seriously consider the other three decisions I mentioned above.
Going back to college to learn a new technical skill or get an advanced degree will pay dividends for the rest of your life. Go into a field that you are passionate about and excel. I've always liked the quote that "you should find a job that you would like to have if you were a millionaire". This can be defined as doing something that you love, enjoy, and feel good about.
The third one about finding another line of work goes without saying anything.
I love the fourth one though. The opportunity for small, nimble beverage distributors that hand sell products and build small, niche brands is exploding. If you want to stay in the beverage business and believe in yourself, why not start your own beverage distribution company? You can do it better than anyone else can, can't you? The best source for information is the total beverage package. Everything you need to get started in the beverage business is in there and it will save you a ton of time and money. Why not let a beverage industry professional give you the direction you need to start your own beverage distribution or production company?
Remember everyone has choices to make as to whether they better their place in society. When you don't take the opportunity of getting or doing something better for yourself, you make sacrifices. Your decision to make these sacrifices determines your job position and title. In other words, if you don't take the time to learn and be the best at what you do, then it's your own fault and not anyone else's.
Tuesday, August 05, 2008
Whether you're a seasoned beverage industry professional or an entrepreneur with an idea for a beverage company you will need a business plan or a marketing plan for the advancement of your go to market strategy.
The distinct differences of the two are, mainly:
-Business plans are for banks, lenders, and borrowing money.
-Marketing plans are for suppliers, retailers, and making more money.
These plans are also fundamentally different, in that:
-Business plans should be based on factual data that embody your entire business architecture or conception yielding precise information about your company or proposition.
-Marketing plans should pertain to certain areas of focus of an existing brand or package, new product agreements and rollouts, and new ideas to help secure business alliances.
But, they both contain similar and essential components:
1.Pre-planning...information and fact gathering time.
2.You, your skills, and your company...remember you are selling yourself.
3.Historical data...anything pertinent to past performance.
4.Sales figures, projections, and trends...everyone wants to know what you've done, what you think you are going to do, and how you think you're going to do it.
4.Geographics...know the territory and the accounts inside and out.
5.Competition...the more you know about them the better.
6.Demographics...what the population looks like in detail.
7.Estimates...tell them how much money you are going to make them.
8.Responsibilities...who is charge of what.
9.Organizational...job titles and functions.
10.Funds...everyone is all about cash flow.
11.References...throw some names around.
Now you know the difference about beverage company business plans and beverage company marketing plans.
I've been getting many emails about starting new beverage companies and beer distributors lately, so I wrote down some new ideas about business plans for some of you budding beverage entrepreneurs out there. I've helped a few guys and gals get started in the beverage business, so if you want to pick my brain feel free to send me an email.
If you need some business plan and marketing plan examples about starting your own beverage business, please take a look at the Total Beverage Package.
Wednesday, July 30, 2008
The dog days are upon us. I've been so busy I haven't had time to post much. There are so many new brands and products flooding the beverage market that I really don't know which ones will miss and which ones will hit. I haven't added any new brands recently because of the opportunities I'm missing with the brands I have. I am planning an all out distribution-space war with the competition in August, just to get some new packages on the shelf.
Heard at all the malt beverage conventions this summer: "space is running out, buyers are hiding from me, employees are saying they don't get paid enough, prices are going up, diesel is killing me, excise taxes are due, I'm ready to get out".
I'm thinking about buying one of those new .me domain names. How does distribute.me sound. Or beverage.me, beer.me, drink.me, sell.me. Anyway, they just started selling them at GoDaddy if you want to get a great name since all the .com's seem to be taken. Let me know if you come up with any good ones.
Do we still have a major brewery that is American owned anymore? The answer is no. What if the Yankees were owned by the French or the Cowboys were owned by a group from Asia. How about Ford and GM to the Swiss. Coke and Pepsi to Saudi Arabia. My advice if you are confused on which beer to purchase...drink Shiner because I love Carlos and he sings very well.
Adios, mi amigos.
Monday, June 09, 2008
I love to think of new beverage company ideas daily. I have developed hundreds of new beverages and drinks...in my mind of course. When starting your own beverage company you must first think of protecting your trademarks and intellectual property. I was fascinated to learn of an upcoming live chat sponsored by Bevnet.com entitled "Learn to Protect Your Beverage through Trademarks." It is being hosted by Gregg Sultan, a trademarks attorney and columnist for Bevnet Innovations, on Tuesday, June 24, 2008 at 11:00 a.m. EST.
Sultan is an associate at Dreier Stein Kahan Browne Woods George LLP. and has strong experience in the trademarks field. He recently contributed a piece to Bevnet Innovation on the process of selecting, clearing and protecting trademarks for beverage names. You can view this story here.
You can sign up for the live web chat with Gregg Sultan here.
Protecting your trademark is one of the ultimate responsibilities of anyone in the process of designing or starting to develop your own energy drink, soft drink, beer or alcohol drink, isotonic, tea, or juice drink. Personally, I can't wait to listen in on the presentation.
Thursday, May 15, 2008
I get asked the following questions a hundred times a day:
"How much alcohol is in my beer?"
"What is the alcohol content of different beers?"
"How many calories are in beer?"
"How many carbs do I have in my beer?"
I usually answer, "Who cares....doesn't it taste good, don't you enjoy it, don't you have more important things to worry about? But today I will give you the correct answer to your questions about the alcohol content in different beers, the calories in these beers, and the total carbs for each beer.
There are some very nice tables on the internet you can use. My two favorites are found at RealBeer.com and Beer100.com. These tables list different beers, the alcohol content, the calories in each beer, and the carbs for the beers. The following example chart is from Beer100.com :
|% Alcohol||Calories/12 oz||Carbs|
|Anheuser Busch Natural Light||Anheuser Busch||4.2||95||3.2|
|Anheuser Busch Natural Ice||Anheuser Busch||5.9||157||8.9|
|Aspen Edge||Adolph Coors||4.1||94||2.6|
|Blue Moon||Adolph Coors||5.4||171||13.7|
|Bud Dry||Anheuser Busch||5.0||130||7.8|
|Bud Ice||Anheuser Busch||5.5||148||8.9|
|Bud Ice Light||Anheuser Busch||4.1||110||6.5|
|Bud Light||Anheuser Busch||4.2||110||6.6|
|Budweiser Select||Anheuser Busch||4.3||99||3.1|
|Busch Beer||Anheuser Busch||4.6||133||10.2|
|Busch Ice||Anheuser Busch||5.9||169||12.5|
|Busch Light||Anheuser Busch||4.2||110||6.7|
|Carling Black Label||G. Heileman||4.3||138||12.5|
|Colt 45 Malt Liquor||G. Heileman||6.1||174||11.1|
|Coors Banquet Beer||Adolph Coors||5.0||142||10.6|
|Coors Light||Adolph Coors||4.2||102||5.0|
|Genesee Beer||High Falls Brewing||4.5||148||13.5|
|Genesee Cream Ale||High Falls Brewing||5.1||162||15.0|
|Genesee Ice||High Falls Brewing||5.9||156||14.5|
|Genesee Red||High Falls Brewing||4.9||148||14.0|
|George Killian's Irish Red||Adolph Coors||4.9||163||13.8|
|Hamm's Golden Draft||Miller||4.7||144||12.1|
|Hamm's Special Light||Miller||4.1||110||7.3|
|Keystone Premium||Adolph Coors||4.4||108||5.0|
|Keystone Light||Adolph Coors||4.2||104||5.1|
|Keystone Ice||Adolph Coors||5.9||143||6.6|
|Leinenkugel Honey Weiss||Leinenkugel||4.92||149||12.0|
|Leinenkugel Northwoods Lager||Leinenkugel||4.94||163||15.3|
|Leinenkugel Creamy Dark||Leinenkugel||4.94||170||16.8|
|Leinenkugel Amber Light||Leinenkugel||4.14||110||7.4|
|Lowenbrau Special Beer||5.2||160|
|Magnum Malt Liquor||Miller||5.6||157||11.2|
|Michael Shea's||High Falls Brewing||4.62||145||13.0|
|Michelob Amber Boch||Anheuser Busch||5.2||166||15.0|
|Michelob Beer||Anheuser Busch||5.0||155||13.3|
|Michelob Golden Draft||Anheuser Busch||4.7||152||14.1|
|Michelob Golden Draft Light||Anheuser Busch||4.1||110||7.0|
|Michelob Honey Lager||Anheuser Busch||4.9||175||17.9|
|Michelob Light||Anheuser Busch||4.3||113||6.7|
|Michelob Ultra||Anheuser Busch||4.1||95||2.6|
|Mickey's Fine Malt Liquor||Miller||5.6||157||11.2|
|Miller Genuine Draft||Miller||4.7||143||13.1|
|Miller Genuine Draft Light||Miller||4.2||110||7|
|Miller High Life||Miller||4.7||143||13.1|
|Miller High Life Light||Miller||4.2||110||7|
|Milwaukee's Best Light||Miller||4.5||98||3.5|
|Milwaukee's Best Ice||Miller||5.9||144||7.3|
|Old Milwaukee Light||Stroh||3.8||114||8.3|
|Old Milwaukee Beer||Stroh||4.5||146||12.9|
|Olde English 800 Malt Liquor||Miller||5.9||160||10.5|
|Olympia Premium Lager||Pabst||4.7||146||11.9|
|Pabst Blue Ribbon||Pabst||5.0||153||12.01|
|Pabst Extra Light Low Alcohol||Pabst||2.5||67||*|
|Pete's Wicked Ale||5.3||174||17.7|
|Red Hook ESB||Red Hook||5.77||179||14.15|
|Red Hook IPA||Red Hook||6.5||188||12.66|
|Rolling Rock Extra Pale||Latrobe||4.6||142|
|Rolling Rock Premium Beer||Latrobe||4.5||120||10.0|
|Sam Adams Boston Lager||Boston Beer||4.75||160||18.0|
|Sam Adams Boston Ale||Boston Beer||4.94||160||19.9|
|Sam Adams Cherry Wheat||Boston Beer||5.2||166||16.86|
|Sam Adams Cream Stout||Boston Beer||4.69||195||23.94|
|Sam Adams IPA||Boston Beer||5.93||175|
|Sam Adams Light||Boston Beer||124||9.7|
|Sam Adams Pale Ale||Boston Beer||5.25||145|
|Schlitz Malt Liquor||Pabst||6.2||185||*|
|Sierra Nevada Pale Ale||Sierra Nevada||5.6||200||12.3|
|Sierra Nevada Porter||Sierra Nevada||5.6||200||15.7|
|Sierra Nevada Stout||Sierra Nevada||5.8||210||19.4|
|Signature Stroh Beer||Pabst||4.8||153||*|
|Tuborg Deluxe Dark Export||G. Heileman||5.1||163|
|Tuborg Export Quality||G. Heileman||5.0||156|
|Weinhard's Private Reserve||Miller||4.8||150||9.9|
|Weinhard's Amber Light||Miller||4.2||135||11.5|
|Weinhard's Blonde Lager||Miller||5.1||161||14.0|
|Weinhard's Pale Ale||Miller||4.6||147||13|
|Yuengling Ale||D.G. Yuengilng||5.0||145||10|
|Yuengling Porter||D.G. Yuengilng||4.5||150||14|
|Yuengling Premium Beer||D.G. Yuengling||4.4||135||12|
|Yuengling Light||D.G. Yuengling||3.8||98||6.6|
|Yuengling Lager||D.G. Yuengling||4.4||135||12|
Do you like to make your own beer? Click here to gain access to 641 Home Brewing Recipes.
Wednesday, April 30, 2008
Freight Allowance or Fuel Surcharge? I find these terms going through my head twenty-four hours a day. A freight allowance is usually passed down to beverage distributors from their suppliers to alleviate the financial burden of high freight rates. Freight Allowances are also used to equalize FOB’s for beverage distributors located long distances from where the products are produced and shipped. A fuel surcharge is an incremental charge added to the total invoice from a beverage distributor to a retail establishment. If your company is not receiving freight allowances or passing on a fuel surcharge to your customers, you need to ask yourself some serious questions.
Many beverage distributors receive freight allowances from their suppliers. If you are not receiving them, you need to demand an allowance from your suppliers. I have heard and seen instances of beverage distributors in California, Texas, and Florida receiving substantial freight allowances from many well-known suppliers. If your suppliers are doing this for one distributor, they should be doing it for all.
Some distributors, including myself, have added $1.00 and $2.00 fuel surcharges to retail invoices. There has been some backlash from the suppliers and major chains, but overall many retailers have come to expect a fuel surcharge. I am considering changing my surcharge to a percentage of the total invoice. It will probably be 2% to 2.5% of the total invoice cost.
With rising diesel and gasoline costs to beverage distributors, make sure you start asking for freight allowances and adding fuel surcharges now. Fuel for our trucks will never be cheaper than it is now. And that causes many sleepless nights for me.
Wednesday, April 02, 2008
Why do we lose sleep over cooler resets? How come my company never gets enough cooler space? Will there ever be a time when I can expect fair market share in a beverage cooler? Space management is more important to your beverage business than anything else. When building your beverage business, building a space management plan will deliver added market share and cash flow. Some key characteristics to a good space management plan include:
1. Take time to analyze your current space in all accounts.
2. Take more time to analyze the space allocated to the competition.
3. Note the brands and packages that are selling.
4. Watch for out of stocks.
5. Definitely check code dates…they are time bombs sitting on the shelves.
6. See which packages are over spaced and under spaced.
7. Make sure there are no gaping holes in the set or underutilized space.
8. Discuss your products strengths and your competitors’ weaknesses with account decision makers.
9. Keep your space clean! Doors, shelves, products, deep well…your customers appreciate this more than you know.
10. For incremental sales, think outside the cooler. Use racks, suction cups, displays, hot shelves, ice downs, etc.
11. Refuse to lose space…find alternatives, beg, and whine. Remember in the beverage business you can go from first to worst any given day.
Your space management plan should revolve around these key characteristics. You will enjoy the benefits of increased sales from more packages on the shelves, less out of stocks, more cash flow, and a buyer impressed with your knowledge and interest in his business.
Monday, March 10, 2008
I am compiling a checklist for aspiring beverage company distributors. Included in the checklist is everything you will need, in the form of resources, to start your own soft drink, new age, beer, or energy drink beverage distributorship:
1. Warehouse/Storage 51. Cell Phone
2. Van/Delivery Truck 52. Voice Mail
3. Uniforms 53. Route Book
4. Two Wheeler 54. Distribution Channels
5. First Aid Kit 55. Company Policy
6. Route Accounting 56. Employee Policy
7. Point of Sale 57. Fuel Supplier
8. Route Sheets 58. Electricity
9. Tape Gun 59. Gas/Water
10. Build To Lists 60. Blade Cutter
11. Pricing/Label Gun 61. Tape Strips
12. Products 62. Cleaning Supplies
13. Shelf Strips 63. Breakeven Analysis
14. Customers 64. Receiving
15. Insurance 65. Legal Ownership
16. Cash Flow 66. Organizational Chart
17. Glide Racks 67. Filing Cabinet
18. Imagination 68. Stapler
19. Patience 69. Security
20. Health 70. Inventory Controls
21. Banker 71. CMA Programs
22. Calculator 72. Discounting
23. Invoices 73. Rebate/Return Policy
24. Fork Lift 74. Promotions
25. Static Stickers 75. Damaged Product Procedure
26. Pallet Jack 76. Forecasting
27. Computer 77. Ledger
28. Suppliers 78. Petty Cash
29. Street Sheets 79. Budget
30. Presentations 80. Long Term Plan
31. Wallet Chain 81. Margins
32. Honesty 82. Laid Ins
33. Internet 83. FOB’s
34. Pen/Pencil 84. Order Staging
35. Notepad 85. UPC’s
36. Printer 86. COD or Credit Terms
37. Humor 87. Rotation
38. Mission Statement 88. OSHA Guidelines
39. Goals 89. CDL
40. Business Plan 90. Balance Sheet
41. Excel Spreadsheet 91. Franchise/Contract
42. Fire Extinguisher 92. Brand Programming
43. EDI Capabilities 93. Merchandising skills and Tools
44. Word 94. Dependability
45. Power Point 95. Versatility
46. Space Management 96. Laptop Computer
47. Enthusiasm 97. Briefcase
48. Comfortable Shoes 98. Business Cards
49. Samples 99. Back Brace
50. Dealer Loaders 100. TIME
Please let me know what I've left out!
Monday, March 03, 2008
An excellent, straightforward reference for checking the health of your beverage business is calculating your gross profit per case. Many route accounting systems have report functions that will give you an estimate of this figure, but route accounting systems don't take into consideration all of the outside influences; such as samples, free cases, breakage, discounts, promotions, or theft. I use a simple spreadsheet program that will give you the exact figure once you have entered the neccessary sales information. At the end of the month, I enter my individual case sales, gross dollars by individual case, any promotional dollars and then, in a flash, I get my figure. It stands at $4.65 a case at present, which is up substantially from three years ago, when it was a stagnant $3.87. In fact, my margins have also increased a nice 3 percentage points to 26.4%.
Analyzing your gross profit per case will undeniably impact your margins and profits in a positive manner. This simple report will also give you needed guidance in reducing unneccessary discounts, rationalization or elimination of unprofitable SKU's, monthly forecasting and ordering, and a wealth of data about your portfolio.
This program is built using simple excel formulas that you can develop very easily. If you want an example of mine, you can download it here.
Tuesday, February 26, 2008
When expanding your portfolio in the beverage distribution business, a distributor must understand and follow certain guidelines that affect the rollout of a new beverage line. I believe that additional groundwork, preparation, and sales presentation tailored locally for a new beverage introduction will pay considerable dividends in the establishment of new brands in your market. Many distributors assume the brand programming developed by the supplier will be automatically successful in their local market. Many times this is not the case. A one-size-fits-all approach will not always work. Exceptional distributors that build brands will take the brand programming and revise it with their local intricacies, pricing influences, and vernacular to help establish an enduring foundation for the brand.
An example: My company focused on initial Red Bull distribution in the on-premise on our own at our own expense, not only for its undeniable reputation as a mixer, but because all the support we received from Red Bull NA for the first year was product. We supplied the bars with personalized point of sale that we did in house and sampled it extensively. In fact, we didn’t even try to place it in the off-premise for the first two months. I firmly believe that a beverage consumed and asked for in social situations will translate to acceptance on a convenience store shelf and floor. I also believe that Red Bull has created a bureaucracy it doesn’t need. The brand’s mystique and distributor network should’ve been sufficient. An arrogant sales force will be its demise.
There are three parameters a beverage wholesaler should abide by when establishing a foundation for new product distribution:
1.Product and Supplier Knowledge. Extensive research must be conducted on the product and supplier by the distributor. Know every ingredient. Have a list of benefits, nutritional information, and product specifications. Know company contacts, advertising slogans, and all of its uses. Its imperative to know what the supplier’s mission is, what it stands for, and its beliefs. Due diligence is an absolute must before you sign the contract.
2.Local Geographic Brand Programming. You will always receive a new brand or package introduction sales presentation from a supplier. If you don’t, be worried. Anyway, once you get this ask your supplier representative to help you tailor it to your local market, if he doesn’t ask you first. Always ask for extra funding for incentives. When building your local programming, build it in language your sales force will understand and give them the tools they need for the rollout to be successful. Train them extensively. Have signage already produced, sufficient inventory of glide racks and ice bins, street sheets printed and ready to go, plenty of product, iced down samples, straightforward objectives that are not overcomplicated and confusing, and an attainable incentive that creates excitement. Try to design and convey to your sales force the exact message and look you want to see in every account. Make your employees compete…track sales, distribution, and display execution. A cookie cutter approach that designates the slightest details in the introduction is the optimum tool for a successful product rollout.
3.Convince the Retailer Beforehand. People love to buy and shop, but they hate to be sold. I am a salesman, but I hate to be sold something. I can’t stand a cold call. I want my retailers to be convinced that they need my products. I want my customers to shop from me. I want my products to be the retailer’s idea. I want my retailers to be creative with my products. A soft sell where the retailer is convinced in the product’s benefits and contributions to his own business is wonderful. Start a campaign a month before the rollout. Gain placement of teaser point of sale. Give away samples and merchandise. Talk to your customers early and tell them what you need for the brand to be a success. Make people want and ask for the product before the introduction.
Following these three brand programming guidelines for beverage distributors when introducing new beverage products will help you in building an informed and knowledgeable sales force, retailer and customer satisfaction, and trust and dependence from your suppliers.
Tuesday, February 19, 2008
Everyday I hear someone in the Beverage Industry speak about the Three Tier System. In beverage terminology, the three tier system is the arrangement carved from the repeal of prohibition that sets legal boundaries between breweries, wholesalers, and retailers. Section 2 of the 21st Amendment to the Constitution of the United States gives the actual states authority to regulate the production, importation, distribution, retail, and consumption of alcohol beverages inside their own state lines. In most states, breweries can't own distributors, distributors can't own retail establishments, retailers can't own breweries, and so on. The restrictions imposed upon each tier are in place for reasons of control, such as taxation, consumption, and licensing.
Controls and restrictions on the beverage industry were set in motion by men of vision and moderation. They knew the excesses of pre-prohibition times all too well. Every corner saloon was owned, or tied to a brewery. This made the brewer a retailer. Therefore, it is my opinion that brewers' influence upon retailers was the fatal mistake that brought about prohibition. This influence over retailers is the reason why a "middleman" or distributor tier was created. Today, I see many instances of the breweries circumventing laws enacted to prevent the abuses of alcohol:
1.Suppliers never go empty handed into a sales presentation with a convenience or grocery store representative. It is common practice for them to give a gift when starting the meeting. Guess what...these retailers now have their hand out every time we see them.
2.Breweries giving away coupons to consumers. There are laws on giving away free or reduced price product.
3.Suppliers forcing distributors to host taste challenges in local bars. It is against the law in most states to buy a consumer a beer.
4.Breweries hiring sales forces that interact with consumers in stores and bars.
5.Breweries hosting websites that any teenager can gain access to.
Face it, the big brewers are trying to sidestep the wholesale tier. Wholesalers...never, ever think that brewers or retailers are your "partners". The 21st Amendment prevents this from happening. I love to see Brewery CEO's tout the praises of the three tier system. What a load of BS. It's painful to realize our business is more about politics than how hard you actually work.
Wednesday, February 13, 2008
With a new beverage product introduction, you must establish your presence at retail by using imaginative and ingenious methods that focus on key attributes of your product. This should be easy, one would think, for large companies with seemingly unlimited capital (i.e. Coke, Pepsi, AB, or Miller), but I write this from the outlook of a small emerging beverage company. A company that may have one new, niche beverage in the process of building their brand from the ground up, market by market.
As a wholesaler, I am inundated with new beverage opportunities. Many of these brands are viable, great tasting products that could contend in my market. Many are concoctions thrown together with a high margin. Some even have great POS and beautiful packaging. Most all miss the boat on the conceptualization of their new product in go-to-market retail strategies.
The definition of conceptualization when applied to a new beverage is complex. The term loosely means to form by concept, which, for us, is very broad and vague. I define beverage conceptualization as the formation of beverage strategies through the consideration of multiple economic impressions. These economic impressions include, but are not limited to: originality, accessibility, availability, acceptability, dependability, positioning, and marketability.
Now when brainstorming and building your beverage concept you have an outline to help build your go-to-market strategy. Ask yourself questions based on all the economic impressions I have listed above. Some example questions are:
1.Is my product original? Is there a need for it? Has it been done before? Am I jumping on the bandwagon?
2.Is my beverage easy to use? For anyone?
3.Where do you find my beverage? Can it be bought in retail easily?
4.Is my product worth buying? Why does anyone buy it? Is it beneficial to the consumer?
5.Is it a quality product? Can you guarantee its proclaimed virtues? What about imperfections in manufacturing?
6.Do the wholesaler and retailer understand my market blueprint? Is my plan too ambitious? Do I have set, easy to achieve distribution objectives?
7.Can my product be sold profitably for everyone involved?
If you can answer these questions easily and positively, you are well on your way to marketing a successful beverage. You have an outstanding product that fulfills a need in the marketplace. But don’t start having dreams of huge wealth and success. History is cluttered with beverage companies that developed unique products and then squandered their opportunity with arrogant management, excessive spending, and idiotic policy. Many of these companies believed that the retail tier is where their fortunes laid. When in fact it is the wholesale tier. First and foremost, you must take advantage and develop good relations with wholesalers. Build your programming with language the distributor and his sales force can understand. Give equal incentives to all distributors, big and small. Never, ever penalize a distributor because his market isn’t very large, you must understand he is just as important as the largest. Treat the wholesaler as you would your best customer. Once distributors believe and trust in you and your product, you will find your beverage in the cooler and on the shelf everywhere.
Tuesday, January 29, 2008
- Use historical data with trends broken down by daily, weekly, and monthly sales figures. A rule of thumb is to use your top ten packages. A true salesman needs to know how many cases he needs to sell on a particular day to hit his goals.
- Always include a distribution drive on packages that need placement.
- A list of displayable accounts, the ones that have a display and the ones that need a display.
- A few gimmies. For example: a clean vehicle, participation in company directives, fraternizing with fellow employees, community service, and night calls.
- Build a pull up schedule and include it in the objectives.
- Tie in no more than two supplier incentives, one major and one minor, per month. And always include your largest supplier. Trust me.
- Target 10-20 accounts for needed POS merchandising and cleaning, broken down by class of trade or volume. Example: five large accounts, 10 medium, and 5 small.
- It is imperative that you tie a salesman's compensation to attaining monthly goals. This way the real salesman step up and you find out who the order takers are.
- Always, always, always give weekly projections to let them no how they stand and calculate the exact results to give to the salesman at the next monthly meeting.
- Repeat every month. Once you've made it through a year, you just refresh the sales data and make any needed changes.
Congratulations, you have a working document saturated with much needed information on sales trends, distribution, retail initiatives, and incentive quotas. It is the only way I know how to keep my score in this "game".
Tuesday, January 15, 2008
So you came up with a wonderful idea on how to get rich by starting a beer distributorship. Are you crazy? Are you drunk? Or.... do you have what it takes to work 16 hour days, seven days a week to be your own boss? Do you like pushing one of these things in the picture on the right? Do you enjoy setting your own goals, interacting and conducting business with many different people with multiple demeanors and diverse backgrounds, and analyzing progressive consumer trends and habits in the marketplace? I enjoy teasing the folks that think beer distributors just deliver beer and make tons of money. Nothing is further from the truth. Beer distributors are entreprenuers that evolve everyday. Change is eminent and constant. Believe me, the breweries change marketing focus and organizational structure every few months. To be a beer or beverage distributor, you have to be able to go with the flow and always do what you say you'll do.
Following is some basic information to see if you've got what it takes:
First you need a federal license to sell alcoholic beverages and a federal permit so you can store them.
Second you need a state permit for the counties you service. Once you get a state wholesaler permit you will receive a tax roll of all the accounts that hold a retail license for the area you service. This roll is important because it will be your universe to which you can sell alcoholic beverages. Its also where you will keep up with taxes collected from retailers.
Third you need an operational strategy. This means vehicles and warehouse space. You will also need a decent route accounting software system to keep up with your invoicing, distribution and sales reports.
Fourth you need products and customers. Call and email every supplier you can find...from alcohol to non-alcohol. Check the margins they offer, terms, pos, support, etc. A good starting point is BevNet.com.
Fifth you are going to work your tail off. Do you have a sales force? If you can do all this on your own...you are my hero. I consider owning and operating a beer distributorship with no employees to be the Holy Grail of the beer wholesaling profession. That is, if it could be done.
I hope that doesn't scare you off. I admire that you want to do this. It is a rewarding business and can be very fulfilling, but you have to know that it can also be excrutiatingly painful, depressing, and all-time and all-thought consuming. I know a lifetime of answers to any questions...feel free to email me at any time, my knowledge is at your disposal. For more information online, see how to start your own Beverage Distribution Business.
Now make a list of questions to ask yourself, your retailers, and prospective suppliers. Some examples:
- FOB's and laid in's for different brands and packages.
- Rising fuel, freight, insurance, taxes, and supplier demands and their effect on the beverage business.
- Your location and your competitors.
- Demographics of your territory.
- Service level expectations and payment procedures of various retailers.
- Laws affecting transportation and distributing alcoholic beverages in your area.
- Credit terms with suppliers and retailers.
1. Contact all of the beverage distributors in your area. Don't tell them all of your plans, just say you are conducting research. Ask about the brands in their portfolios and see if they handle the full package line from some mid-major brewers. Start with the Pabst supplier. If the distributor is not carrying some Pabst packages you can request these brands. A few other breweries to contact are Gambrinus, Pittsburgh, Cold Spring, or any small regionals in your area. It will take time to build a product line. Also, you will have to be ready to order and deliver as soon as you start getting the product....remember beer is perishable.
2. Ask about their non-alcohol portfolios...there is more margin in soft drinks and you don't have to pay sales taxes in most states. The only drawback is some retailers will ask for credit terms (larger ones) and Coke and Pepsi control the cooler sets. But sometimes we get lucky with these new niche products..many did with Snapple, Red Bull, and Vitamin Water. Try to get a few of these beverages. A couple to look at are Cocio Chocolate Milk, Hat Trick Beverage's Pumped Fitness Water, and IrnBru. Go to BevNet and research some of these brands. Don't be afraid to call or email them. They will send you samples and pricing.
3. Contact the National Beer Wholesalers Association and ask about your State Association and who the local distributors are. You can also find a wealth of information about starting a beer distributorship on the NBWA website, as well as your state association's website.
4. Never pay for any franchise from anyone in the beverage business...you get the rights from a supplier based on the expectations of your performance at the levels agreed upon in the beginning of entering a contract with a supplier. Any payment to a supplier should only be for inventory and promotional items that help you sell more product. At least, that is my conviction.
5. It would be best to start off with some non alcohlic drinks first, unless your market is heavily skewed to the on premise. Many breweries nowadays let you order small pallet quantities to help with cash flow. So do the smaller soft drink companies.
6. You need to make at least 25% margin on beer and 30% plus on soft drinks.
7. Look in to adding beef jerky, cups, or salty snacks to your routes.
8.It is imperative that you have a superior understanding of computers, the internet, excel, word, and power point. You wouldn't be able to order or sell the first case without 'em.
Hope that helps a little, at least you have a starting point now. Anyway, feel free to email me with any questions. I believe that with consolidation of more and more beer distributorships, there will be breweries and beverage companies that will welcome smaller wholesalers. There is a niche for small, nimble wholesalers...you just have to patient, hardworking, and lucky. Just remember, the beverage business is about making friends...that is forgotten when you're trying to sell 500 sku's.
Friday, January 04, 2008
Let's face it boys and girls, any happy thoughts you have about the joint venture between Miller Brewing Company and Coors Brewing Company you can forget them. The only positive outcomes of this merger will be for the breweries involved and the large mega-wholesalers. Believe me, this new company will become "Millerized". That means less margins, no supplier supplemented POS (thanks to a wonderful program called Service 2000), higher freight, and more bureaucracy. That also means the supposed worst nightmare for small to medium sized wholesalers....consolidation. I say supposed because many think of consolidation as bad. It's not as bad as many may think. Anyway, I think the Justice Department should scrutinize every detail of the propsed merger/joint venture because it is anti-competitive and many small family-owned businesses will be pushed (read shoved) out. I would welcome that "shove" because I believe the valuations for smaller beer distributorships are as high as they will ever be. Think about it, margins are going to shrink even more, fuel, insurance, and salaries are escalating out of control, and the breweries are going to get more and more "influence" over your affairs. Just remember, as it says on our invoices, you are an independent business person free to conduct business as you see fit. If you believe that, I'd be willing to bet you think Miller/Coors is going to lower FOB's.