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ABI Offering Millions to Distributors for POS Marketing Promotions


Why is A-B/InBev Offering Millions to its Distributors for POS Marketing Promotions?

In our previous blog – December 13, 2015 – we looked at Anheuser-Busch InBev’s (ABI’s) new incentive program which ABI estimates will offer participating distributors an average annual benefit of $200,000 each, with as much as $1.5 million annually for some of ABI’s largest distributors.

For our take on this program, please refer to the previous blog:

A-B/InBev (ABI) Offers To Pay Distributors For Their POS Marketing

What Problem Is ABI Trying to “Fix”

Today, I'd like to to take a look at why ABI chose as one of the pillars of its new marketing plan to support a distributor’s contractual marketing support spending by covering up to 75% of the retail promotion and display costs for those distributors if 98% (by volume) of the beers they sell are from the ABI portfolio.

According to the Wall Street Journal, ABI’s stated purpose for the marketing cost reimbursement plan is to “reverse declining volumes in the US” by encouraging distributors to reduce the number of non-ABI brands they offer their customers.

Apparently, the thinking is that one of the reasons for the declining sales volumes of ABI’s beers is that distributors are not focusing sufficiently on the ABI brands, choosing instead to focus too much on non-ABI brands.

Perhaps, too, ABI imagines that the distributors need to increase their use of and spending on retail promotions (POS) as a way to stimulate more sales.

Yet, many distributors see this incentive program as meaning, at least in part, that ABI believes the distributors should greatly curtail or stop marketing and selling beers from the exploding list of craft breweries; and, of course, reduce or stop selling non-ABI imports, too.

ABI may be assuming that should a significant number of their over 500 distributors drop some or all of their craft and import offerings it will reverse the ABI sales decline especially of the macro-brews Bud and Bud Light. Such a reversal could increase ABI’s market share from its current 45%, perhaps even back to its former near 50% market-share status. At the very least, one could easily conclude, ABI  at least  wants to stop their volumes from declining.

Will ABI’s Approach Work?

Could this strategy actually work?

Well, like most questions, the most accurate answer is “it all depends.” Our answer to that question, based on conversations with beer distributors and personal observation, is “maybe.”

Several – and it is perhaps even more accurate to say “many” (see resources, below)– studies have shown that there is a lack of conclusive proof that at-retail alcohol advertising increases overall levels of aggregate consumption among both adults and young people. However, according to at least five studies (that I could find) on the impact of alcohol advertising at the point-of-sale: Advertising has a measurable effect on market-share for brands and a substitution effect between brands. And, as noted, ABI is seeking to regain lost market share

Although the amount of advertising for all beverage types has increased dramatically over the past century, government data shows that the consumption of beer, wine, and spirits in the United States has remained relatively constant. In fact, per capita consumption levels in the year 2000 did not differ dramatically from those during the year 1900. Again, advertising has a measurable effect on market-share for brands and a substitution effect between brands.

On the other hand, according to the CDC, “Point-of-purchase (POP) [i.e., at-retail] marketing, including alcohol advertising and placement, can increase alcohol sales and consumption substantially.” Also, CDC studies have concluded, “POP marketing can increase beer sales [vs. not having POP marketing] by as much as 17% and influences consumer purchase behavior, as 70% of a buyer's purchasing choice occurs after the buyer enters the retail establishment.” The CDC studies also note, “Persons aged 21-27 years are more likely to purchase beer in convenience stores and liquor stores than in supermarkets and drug stores [where POP promotional materials are prevalent].”

ABI’s Historical Utilization of POS Advertising

Anheuser-Busch, as I learned at the following link, has a long history of successfully utilizing POS to sell its products.

ABI – Our Heritage and History in Marketing and Advertising

As I put all of the scholarly, business and promotional publications I had researched on my desk, what struck me was that POS has now come full circle - Starting in 1852 and growing rapidly until Prohibition, then starting all over again in 1933; Then gaining steam until 1950 when emphasis began building in the fledgling visual media, TV; Then once again beginning somewhat of a shift back to local point-of-sale marketing.

Things began to gain headway with the explosion in the number of TV channels and the proliferation of DVR’s, permitting TV advertising to be skipped by a viewing public not willing to tolerate programming interruptions.

Conclusion: POS Marketing is More Important Now than Ever

Having all of the above as the prequel, it is easily concluded that POS is more important now than it has been in well over a couple of decades. And, by more than one account, it is possible that increasing the quantity of beer POS is likely to increase a brand’s market share, if not the total demand for beer, generally speaking.

But, it bears noting that US beer shoppers and consumers today have between 13,500 and 20,000 unique beer brands to choose from (NBWA data), and the most impressive “style” of beer growth over the past decade has come from craft brewers.

Craft sales have grown, recently, at nearly 20% year-over-year while the macro-brewery brands have seen either virtually flat growth or, in some cases slow but steady decline. Given this reality, it is hard to imagine how POS marketing can and will stop, let alone reverse, macro-brewers declining sales volumes.

If we had reached a point of craft saturation – where very few new craft breweries and brands were coming to market – I could argue the case for the growth of ABI’s sales of Bud and Bud Light if for no other reason than the expansion of the population.

Yet, all available evidence suggests craft is nowhere near saturation. After all we’ve grown from 96 US brewers in 1977 to an estimated 4,144 brewers in 2015 (Brewer’s Association data, December 2015). 

If ABI’s distributors could, financially, afford to sell 98% of their volume from ABI’s brand portfolio, evidence suggests their competitors would be the likely beneficiaries, picking up the ABI distributor’s jettisoned craft labels and fulfilling swelling market demand for craft.

Essentially what we are witnessing is the limitation [based upon] the extent of the market (Adam Smith, “Wealth of Nations,” chapter 3, page 24). Fundamentally, this suggests that US demand for macro-brewers lagers and light lagers appears currently to be at maximum. 

POS probably can increase the market share of Bud and Bud Light (vs. MillerCoors competing brands, for example). What is much less clear is if POS would actually prevent the steady encroachment of craft beer as a percentage of the total US beer market.

After coming to the above conclusions, what is clear is that what is needed is not just more POS, but POS-tracking – to help speed POS to market and reduce POS waste, POS-measurement – to find the positive correlations between POS initiatives and sales, and POS-management – to provide suppliers, distributors and retailers with actionable information and to assure the middle-tier receives all available incentives from ABI and other supplier’s marketing support programs.

To learn more about OnTrak Software’s digital tools to track, measure and manage your investments in POS Marketing, please click the following button:


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Center for Disease Control (CDC) MMWR Weekly (various) -

Anheuser-Busch Heritage -

Wall Street Journal (WSJ) December 4, 2015 -

Whitepaper: “The effect of Point of Sales Promotions on the alcohol purchasing behavior of young people in metropolitan, regional and rural Australia” Published online: 06 Sep 2011

Beer Business Daily November 23, 2015 (subscription required) -

Industry Views on Beverage Alcohol Advertising and Marketing World Health Organization (WHO) -

“Wealth of Nations,” Adam Smith 1727-1790 (Great Mind Series) Chapter 3, page 24.

Research Report: “Alcohol point-of-purchase advertising and promotions: prevalence, content and targeting” online from POPAI -

The Importance of POS Marketing in Demand Management and Forecasting


The Importance of POS Marketing in Demand Management and Forecasting

The Importance of POS Marketing in Demand Management and Forecasting resized 600Recently I was having a conversation regarding business analytics with a large mid-western beer distributor’s purchasing manager.  His job, as he explained it, is Math: “Demand management – and forecasting.”

Fundamentally, the job is to make certain the distributor has enough inventory on hand and on the way (with a known delivery date) in order to have as little inventory as is feasible but at the same time retaining a very high service level.

The goal of course is to reach 100% service level; although, in reality the carrying costs required for a 100% service level would noticeably decrease profits. So the technical service level goal used for calculations is something less than 100%. On the other hand, it should be noted that for products in high demand, a service level drop to about 92% will result in a reduction of overall revenue of 4% (Note 1).

Key Factors

Factors such as lead times, item’s seasonality, growth trends, new product introductions, and substitute products all figure into the job of purchasing manager. Other factors affecting demand are increasingly important, including retail pricing incentives and promotions are always in flux, and it follows that demand management and forecasting is, on a good day, a constantly moving target. Yet, with profit margins under pressure from all sides, proper demand management can have positive and profitable outcomes for distributors.

POS Marketing and Demand Management

Today, much more so than in previous periods, better demand management really is critical in helping to gain the extra pennies (or so) per-case saved – or perhaps earned – that distributors are looking for. And, increasingly, demand management involves yet another variable: Point-of-sale (POS) marketing and promotional programs designed and implemented with the goal of increasing demand, often within a few days of POS promotion program launch.

Collecting POS data and correlating it to item sales data certainly facilitates the effectiveness of the distributor’s purchasing manager; but, probably of greater importance is the distributor’s ability to collect and report on POS data thereby helping determine the impact (and ROI) of distributors’ shopper marketing initiatives. In short, both purchasing and sales managers will benefit from tracked and measured POS marketing programs.

POS Marketing and Forecasting

As you know, beverage alcohol distributors’ sales and purchasing functions rely heavily upon forecasting to help predict future sales (and assure high service levels). Today, more than ever, forecasting requires that all data-points influencing decision making are recorded and at hand. In the past decade it has become even more important to know demand patterns, economic factors, competitors’ movements and the impact of pricing – perhaps the key component of POS marketing content.

Until the advent of OnTrak’s digital tools, such as SignTrak, MenuTrak and PermaTrak, very little granular data pertaining to POS promotions was even captured, let alone able to be used in the forecasting formulas distributors rely upon.

Until the advent of POS applications such as those mentioned above, ordering and tracking tools were virtually non-existent and therefore the impact of POS marketing was relegated to the qualitative and subjective realm – essentially anecdotal observations – not the quantitative realm: employing correlation or causal statistical methods. Now is the time to look into OnTrak’s suite of digital tools for today’s beverage distributors.

To learn more about OnTrak’s digital tools for tracking your POS Marketing and positively impacting your demand management and forecasting activities, please click this button:

OnTrak Products

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Note 1 - Grocery Manufacturers Association Study, 2002; URL:

AB InBev Offers to Pay Distributors for Their POS Marketing


AB InBev Offers to Pay Distributors for Their POS Marketing

An Offer They Apparently CAN Refuse

St. Louis Confidential

As reported in the Wall Street Journal (WSJ) - December 4, 2015:

“The world’s largest brewer last month introduced a new incentive program that could offer some independent distributors in the U.S. annual reimbursements of as much as $1.5 million if 98% of the beers they sell are AB InBev [ABI] brands. This according to two distributors who requested confidentiality because they were asked not to discuss the plan. Distributors whose sales volumes are 95% AB InBev brands would be eligible to have the brewer cover as much as half of their contractual marketing support for those brands, which includes retail promotion and display [POS] costs.

AB InBev, which introduced the plan at a meeting of distributors in St. Louis, estimates participating distributors would receive an average annual benefit of $200,000 each.

The company, which has more than 500 distributors nationwide, said the incentive program is part of a three-year plan to restore growth in AB InBev’s most profitable market. It includes additional marketing and sales commitments of about $150 million next year.”

The St. Louis Confidential-Incentive Plan or what we’re calling “SLCP” is part of ABI’s new incentive plan to stop and hopefully reverse its declining US sales volumes. Once commanding nearly 50% of US beer market share, ABI’s output has declined by 11 million barrels since 2008 placing ABI, still huge by any standards, at a reduced market share of “only” 45%. Craft, once barely a footnote in annual beer production reports, has grown to an 11% market share as of 2014 (according to Brewers Association data).

The WSJ article spends a fair amount of column real estate discussing what are termed as “competition concerns", going so far as to suggest that craft brewers fear that ABI’s POS incentive program (SLCP) could “squeeze out America’s craft brewing industry” or constrain US beer distribution (and distributors).

On the one hand, I do understand how craft brewers could come to the conclusion that they will be under new (and unfair) challenges for shelf-space because ABI’s SLCP will be backed by the financial clout only ABI can bring to beer marketing.

On the other hand, it is difficult to imagine that many distributors will jettison popular and profitable craft brands in the hopes that beer buyers and consumers will switch back to Bud Light from a craft brewed IPA, for example. As one consumer remarked, “Bud Light and Ranger IPA or Zen are simply not fungible products, beyond all being beers, that is.”

According to another source, Beer Business Daily (November 23, 2015 issue):

“First round of reactions from A-B wholesaler readers are coming in. Says one: ‘Already hearing that few [ABI] wholesalers will change unless they're already at or near 98%. Why would anyone in their right mind, give up the long-term success of a brewery in a category that’s up double digits [craft] for a partner that just bought SAB? The best way for AB to get us to 95% is not to ask us to jettison our craft brands or decline potential new ones, but simply to sell more of their beers.

We'll stay pat.’"

On the other hand, as of December 4, 2015 (WSJ), at least one distributor, Grey Eagle Distributing, St. Louis, has dropped a craft brewer because of the SLCP incentive program. According to the dropped craft brewer, Deschutes Brewery, Grey Eagle decided to drop Mirror Pond Pale Ale because the distributor “. . .had to make a choice to go with the incentive program or stay with craft.”

Yet, several ABI distributors (who wish to remain anonymous) I’ve talked to have basically echoed the comments above from Beer Business Daily, one of them saying,

If Bud Light, for example, would be purchased in equal measure to what I lost by dropping craft, it would be almost a miracle. The issue is our market probably consumes a little less than 10 million case-equivalents of Bud and just over 1.2 million case - equivalents of the crafts I distribute. Simply dropping the crafts from my sell sheet would not likely cause an equivalent increase in my sales of Bud Light. I mean Bud and the crafts just aren’t interchangeable products. In fact, Miller even has TV commercials that makes fun of people who say ‘I’ll have a light beer, any light beer, when what they should have said was I’ll have a Miller Lite beer,’ suggesting that Miller Lite is a completely different product than other light beers.”

“What would happen is that another WD in my city would pick up the craft I dropped and my competitor would ramp up sales to our market demand of 1.2 million cases, meaning the revenue dollars would now go to my competitor rather than to me. Maybe I would sell a little more Bud Light than I did before – but that's a leap of faith most ABI WD owners aren't willing to take these days.”

Where Does OnTrak Software Fit

Now, we know at least one thing – we don’t have a crystal ball. We also know something else. Regardless of your adoption of the St. Louis Confidential Plan to take ABI up on their new POS incentive – or expense recovery – program, or not, there is something to consider.

You will be placed in the best possible position of all to make the most of your decision if you have a digital tools that helps you Track, Measure and Manage your investments in retail promotion and display costs (your POS), not simply the ability to order POS almost as an afterthought.

That being said, should you choose to embrace the new incentive plan, it will be incumbent upon you to have the data at the click of a mouse that our digital tools like SignTrak and PermaTrak captures and reports on in order to maximize your POS expense recovery and ROI.

On the other hand, should you choose to “stay pat” and work with your craft and import suppliers, you’ll want to be able – with equal confidence and ease – to report on your marketing support of their brands, and lobby for their participation in-kind.

For more information about OnTrak Software and the digital POS Tracking software tools many ABI beer distributors are using, please click this button:


America’s Year of Beer – 2015 – Winning with POS Marketing


America’s Year of Beer – 2015 – Winning with POS Marketing

America’s Year of Beer – 2015 – Winning with POS Marketing resized 600Recently I reviewed some of the information published by the NBWA about beer, including brewing (suppliers) and distribution. Also, as a subscriber to Beer Business Daily, I regularly review additional content from BeerNet . I also consult several other sources for information pertaining to the US Beer Market, including: Brewers Association, datatante  and Beeradvocate.

The Number of Brands

According to these sources, there were somewhere between 13,500 and 20,000 unique beers (sku’s) available for sale to US beer drinkers in 2015. The number of new beers and new breweries coming on line is indeed impressive, too.  It is accurate to say that beer choice is currently under little, if any, threat of being consolidated. In some respects, beer brand and product diversity – shrinking at more than one point in time since the repeal of prohibition – is now exploding.

The Growth of Breweries

Here’s a quick overview of why the availability of beer labels is growing so rapidly. Technically, in 1932 there were 0 (zero) breweries in America. In 1933, however, after the repeal of prohibition, the number of breweries grew to 331. And, while going from 0 to 331 may seem impressive, in 1919, the year before prohibition was enacted, there were 669 breweries. In the interests of brevity, here’s a table showing the progression of the number of US breweries:


# Breweries















2015 (est.)

4,144 (Note 1)

Brewery growth during 2014 was on a nearly 19% annual pace, and over the past several years, every year saw brewery growth climb at a higher percentage rate than the previous year. At the same time, major beer brands from AB and MC, while still dominating sales, were trending down while crafts began building on their meager footholds to grow by about 18% and even imports grew by nearly 7% (as compared to the overall market growth of just .5%).

You would be correct in assuming that such growth of craft and imports in a virtually flat growth overall beer market came almost entirely at the expense of the sales of beer from the big national brands like AB and MC (macro-breweries). Craft – not too long ago, barely a footnote to annual beer production charts – grew to 11% of the US beer market by 2014.

Perhaps in response to the growth of craft – or perhaps just because it’s good marketing – AB produced what could be seen as a “defense against craft” ad: Click Here for Video >>

Of course, retaliation ensued from a plucky craft brewery: Click Here for Video >>

Winning with POS Marketing

The point is, since the repeal of prohibition, the beer landscape has undergone substantial changes and we have arrived at a point in time where the American consumer is faced with at least 13,500 beer brands from about 4,000 breweries; and the consumer’s appetite seems to know no limits. We’re currently enjoying a cornucopia of choice when it comes to our favorite libation – and all indications are for the number of choices to keep on growing.

For many local and possibly for even some regional beers, word-of-mouth “advertising” will probably be insufficient to keep attracting new customers. That is, word-of-mouth promotion will unlikely be enough to compete with the seemingly weekly arrival of new beers vying for both shelf space and shopper’s dollars.

Clearly in a market showing virtually no signs of saturation, beer sku’s – representing both new and existing brands – will only be able to survive, grow and prosper if retail promotions are tracked, measured and managed using digital tools that stimulate shopper demand and provide readily available point-of-sale (POS) marketing data to correlate to product movement data at both individual and aggregate retailer locations. The deployment of such tools will facilitate the analysis of retail promotional activities to see if POS initiatives are meeting sales objectives and ROI targets.

In other words: Since beer (and other alcohol beverage products) stands in the virtually unique position of being marketed at-retail using materials and campaigns developed and delivered by beer wholesalers, it can be concluded that the most successful brands (and distributors) will be those who encourage the adoption of currently available digital marketing tools to manage their promotional spending to achieve optimum ROI on their POS spending.

For more information about OnTrak’s digital tools for beer distributors please click this button:


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Note1: 2015 Brewers Association data

NBWA Reflection: POS Tracking Software More Important Than Ever


NBWA Reflection: POS Tracking Software More Important Than Ever

As I write this, we have just returned from the 2015 NBWA Convention in Las Vegas.

First, our gratitude to Craig Purser and his team for another job well done!  They are the best in the business for helping us get in direct contact with beer wholesalers that need our POS Tracking and Line Cleaning Software solutions. Thanks Craig! 

More Beer Brands Means POS Marketing Software Is Even More Important resized 600The Amazing Number of New Brands

One of the key things that caught my eye again this year was the ever increasing availability of beer choices offered to the US retail beer buyer: Now well over 13,000 named brands.

Thirteen-thousand!  Let that sink in just a moment.

One of our greater-Cincinnati party stores probably has 1,300 beers to choose from. And, although the number of new craft beers continues to be added to the store’s inventory faster than I can keep up with, the number of beers sold only appears to be growing steadily, but not necessarily at great speed. 

Perhaps by Christmas, the number available under one roof will have climbed by another 50 or so, then after the holidays there will be some that go away, never to return; and then some new brands that will be added. There is growth, but I don’t see 13,000 beers for sale at one retailer anytime soon. I would imagine that the number of beers at this retailer may approach 1,450 by fourth-quarter 2016. But, come to think of it, this is much too large a number, all in the same place at the same time, for most of us to get our heads around. 

Thirteen-thousand different beers – it boggles the mind, but 1,300 beers are also daunting.

Take a Look at a Grocer’s Bar

This month, a new Super-Kroger’s opened in Cincinnati.  Have you heard about the “Market Place” concept?  This Kroger’s is larger than three football fields laid end-to-end.  Inside, near the center, this Kroger’s has an impressive bar with some 12 taps, and the beer on-draught changes regularly and frequently. It also has one those “eno-tap” contraptions of tubes and faucets allowing wine to be “tapped” from up to 12 different bottles and delivered in two-ounce pours. 

All this considered, the infrastructure and design elements taken together, this “island” inside this enormous Kroger’s store, is larger than many stand-alone bars that I have been to over the past 30 years. Flights of beer and wine seem to be the first thing patrons go for, followed either by a full glass of wine or mug beer; next followed by the ritual filling of what looks to be an infinitely large supply of “growlers”, initially supplied at no-charge for beer-buying customers.

Twelve different beers on tap, twelve different wines on tap – even this much variety and taste-ability can almost overwhelm.  And, get this, the in-store bar also serves “light-bites”, elaborate cheese plates and tiny gourmet sandwiches specifically chosen to compliment the beer and wine choices offered. Most of the half-dozen “bar tenders” seemed to know nothing about the tap beers, and even less about the wines. However, there was one guy who was on the ball, and available to describe the various beers, and one would presume, also has some wine skills, too.

Point-of-Sale (POS) Marketing Could Really Help

Talk about your POS marketing – the entire set-up was designed to promote the products and also be the point of sale for choosing the beverages you planned to take home with you. 

Well, I sat there sipping my beer flight  and marveled at what this entire “alcohol island” must have cost to build and how much it costs to maintain with, one, two, three, four – five employees, plus the guy who really knew the products. 

Then I noticed two guys, approaching the bar, pushing a hand truck carrying a new barrel. These gentlemen weren’t wearing the Kroger golf shirts like the other folks behind the bar.  No, these guys were wearing different colored golf shirts that I identified as they closed in. The new peoples’ golf shirts were embossed with the logo of a prominent Cincinnati beverage alcohol distributor.

Imagine that: Kroger’s has its own wholesale distributor (WD) sales reps keeping the Kroger taps flowing. This means these folks were not on the Kroger payroll, but apparently were “on site” on a Saturday night to ensure the beer would not stop flowing.  I don’t know if the distributor helped Kroger’s pay for the bar within a grocery store concept, but it certainly seemed that the WD’s reps were given complete freedom to pull the empty barrel and start a new one and even interact with Kroger’s patrons. These WD reps were treated as fellow employees as far as I could tell.

When I ask certain questions about the extent to which goods and services are treated as POS, I sometimes feel I get evasive answers, almost as if what I am asking is, somehow, a bit of a gray area. One thing that I know is that the tap pull handles are supplied by the beer WD’s as are the table tent/menus listing the bistro’s light bites. And of course, the two reps, even if they are simply on-loan from the beer WD aren’t working without pay.  Is all of this expense not considered POS? Looks like POS to me.

Who’s Paying for All This POS?

Once again, my head started spinning and it wasn’t from the 10% ABV craft beer I was imbibing. Rather my head was spinning as I contemplated what certainly seemed to me to be perhaps the most expensive POS I have ever seen. If the bar’s construction costs were somehow lessened by the WD – and I have to assume there was at least some form of “help” offered by at least one of the various WD’s whose products were for sale – then what we have inside this grocery store is an investment in both permanent and temporary POS made by and continuing to come from at least one if not more WD’s.

And Who’s Tracking and Managing These POS Costs?

Of course I wondered if any WD was tracking, managing and measuring the effectiveness of the POS outlay on display. My assumption is that marketing monies had been poured into the store long before the first shovel-full of dirt had been turned over. I imagine there is a quantifiable ROI on the distributor’s point-of-sale promotional spending at this store.  I also believe the distributor is acting based on blind faith and really has only a vague idea how much was and is spent to maintain what appears to be a long-term commitment to gaining brand dominance, one Kroger’s store at a time.

Here’s What’s Going On

With thirteen thousand beers on the market, the sales “winners” can only be, and will only be, those brands that track, measure and manage the vast outlays of capital required at the point-of-sale just to get noticed

Let’s face it, another $100 million spent on TV ads for either Bud or Miller beers haven’t really done all that much the past few years to “sell more beer” – either because everyone already knows Bud Light or Miller Chill, or because they don’t care what is advertised on TV, often fast forwarding through TV ads.

But when the beer shopper is actually at the place and time when a buy can be made, that is when advertising – POS – is “super-effective”.  Does anyone actually believe another $10 million Super-bowl ad for a well-known virtual commodity like light beer will move the sales needle anymore? On the other hand, time and again the data positively correlates POS marketing to an increase in sales.

It is long past time to wake up and start marketing like the big business that most beverage distributors today are. It’s now time to market at the point-of-connection between the shopper and your product; and, it needs to be accomplished using digital tools that provide the same degree of accountability and manageability as your order entry, purchasing, warehousing and financial reporting systems.

Time’s a-wasting.

How OnTrak Software Can Help!

OnTrak now offers 5 Digital POS Tracking Tools for today’s beverage distributors: SignTrak (for custom, temporary signage), PermaTrak (for permanent POS), MenuTrak (for custom beverage menus), SampleTrak (for beverage sampling), and our newest offering, LineTrak (for draught line cleaning).

For more information about our POS Tracking and Line Cleaning Software, please click this button:

      OnTrak Products

A Recent Customer Conversation About POS Marketing Management


A Recent Customer Conversation About POS Marketing Management - The Costs and Supplier Recovery

If this is your first time on our site, or first time checking out our blog, let me give you a very brief introduction to OnTrak Software.

About OnTrak Software

We are a point-of-sale (POS) marketing technology company that helps our customers – primarily beverage alcohol distributors – Track, Measure and Manage their investments in POS marketing materials using our suite of cloud-based Digital Tools. We call it POS Tracking Software.

For nearly ten years, our customers have been telling us that POS costs and speed to market are out of control – one’s too high and one’s too slow. One of the reasons for these twin negatives are the traditional paper forms for ordering, producing and delivering POS promotional materials just can’t keep up with the POS demands from suppliers and retailers.

While suppliers often have generous recovery programs designed to offset the distributor’s investment in graphics personnel and equipment, actually getting those marketing recovery programs to provide benefits to the distributor can require extensive reporting regarding the types and effectiveness of the POS initiatives.

OnTrak Customer Example

OnTrak’s suite of Digital Tools addresses all of these issues – but you probably figured we’d say that.  Let’s continue by discussing one of our real live customers, a “middle-plus” market distributor of beer, wine and spirits wholesaler covering several states and representing dozens of suppliers.

What Did Your POS Cost?

I recently asked our customer how much they spent on the POS orders they processed in September of this year. The answer was, “I don’t know off the top of my head, but I can get it for you in a couple of minutes.” Literally, a few minutes after I hung up the phone, I received an email from my customer, one of the larger medium-sized beer, wine and spirits distributors in the US, with the number $41,995.40. In the case of our customer, the dollar figure they noted was their cost for the production of a very specific type of POS marketing – menus: Mostly wine menus.

Typically we see “beer dominant” distributors spending on POS increase during the late spring and summer months and “wine dominant” distributors spending on POS spike during the last 3 or 4 months of the year – more or less tracking with the busy seasons for beer vs. wine and spirits sales. This customer is clearly wine dominant and uses our MenuTrak product to automate beverage menu creation and supplier bill-back recovery.

How Much Did You Recover From Your Suppliers?

Well, I couldn’t just let that nearly $42,000 cost figure stand without knowing how much of the expense they recorded would be eligible to be recovered from their various suppliers marketing allowance programs.

So, I asked our customer to tell me the amount recovered.

This time, the answer was given while I waited on the line: $41,972.87.

Nearly 100% of the cost?

I was on the phone, in total, about 5 minutes. I did ask how long this report would have taken without the business analysis report writer than comes with MenuTrak.  The response was: “Days. We wouldn’t have been able to run the report for a week or two after we closed the previous month; also there are virtually never any questions about the reports or the amounts detailed, everything is laid out by supplier, customer, product promoted and associated costs via the POS. Every detail a supplier requires is on the report.”

So, we have an over $100M beer, wine and spirits wholesale distributor who is able to account for what is advertised at the point-of-sale, when, how much the POS cost to produce, and how much of that cost is offset by the suppliers. The production of the report took less than 5 minutes.

The Bottom-Line Benefits Of OnTrak

This distributor uses the OnTrak products to place POS orders, track the flow of work through production and delivery, measure, record and report costs both to “internal customers” and externally to suppliers, ultimately allowing the distributor to manage the expenses of perhaps their second largest expense item, after payroll or fuel – POS promotions.

On top of these features, our customer is enjoying the benefits of improved POS accuracy – that is, there are fewer errors and reworks – getting their POS to market more quickly, and spending hours generating and filing recovery reports with suppliers, rather than days or weeks.

One additional and very much appreciated (but not planned for) benefit is the improved cash flow, with respect to recovery dollar settlements, due to the OnTrak recovery reports being able to be generated quickly, completely and accurately with all of the data required to generate quick settlements of recovery dollars due from suppliers.

OnTrak now offers 3 other Digital Tools for today’s beverage distributors in addition to MenuTrak: SignTrak (for custom temporary signs), PermaTrak (for permanent POS), and SampleTrak (for beverage sampling.

For more product information, or better still, to request a live demonstration of any of our products, please click this button:


The Top-line Impact of Tracking, Measuring and Managing POS Marketing


The Top-line Impact of Tracking, Measuring and Managing POS Marketing and Promotional Materials

A Look-Back Over the Last Eight Years

In the beverage alcohol distribution industry, the spiraling growth of spending on point-of-sale marketing (POS) has been an issue of some concern for most of the last decade.

Prior to 2008, however, beverage alcohol – beer, wine and spirits – sales could be pretty much counted on to be better this year than last and it was almost a sure thing that next year would be better still.

In response to the circumstances imposed on distributors during the ‘Great Recession’, some pursued consolidation (either by looking to acquire and grow, or be acquired in order to avoid dire consequences); some pursued adding many new brands and products to their portfolios; and almost all began in-earnest self-examinations to determine where money could be saved and where money could be invested to drive additional sales.

The Top-line Impact of Tracking, Measuring and Managing POS MarketingManaging the Cost of POS

It is true that most distributors have been inefficient in at least one highly-visible but apparently difficult to manage area of their business – POS marketing. And, due to the fact that POS is believed by virtually all distributors to be very effective at keeping and capturing additional market share, many distributors have done little to manage the costs pertaining to the ordering, production and placement of POS for fear of losing sales to competitors who beat them to the punch in getting effective POS placed at-retail in a timely fashion.

Much of the above noted self-examination was to determine both the cost and ROI of virtually every expense in a distributor’s operations. Delivery trucks and maintenance costs, to warehouse lighting, to diesel or bio-diesel fuel procurement and several other “green” initiatives, to the often called “black hole” of POS were all considered fair game for the efficiency experts to dig into this time around.

Reducing the Cost Per Case Delivered

Sound familiar?

It should – the last eight years have seen small, medium, large and super-large distributors eager to find solutions that will reduce their “cost per case delivered.”

Think of it this way: Imagine a 10M cases (sold per-year) distributor who implements a system that will reduce his cost per case delivered by just one-half-cent. Such a system would increase the distributor’s bottom line by $50,000. 

For the purpose of our discussion, if the average selling price per case is $15.00 and the after tax profit per case is $.50, this distributor would have to increase revenue by at least $1,500,000; and, the quantity purchased, warehoused and delivered would need to increase by 100,000 cases. Of course, it is always possible the distributor may have to increase payroll, warehouse management and transportation expenses proportionately to provide the logistical support required.

More Brands – More Need for POS

As beverage alcohol distributors continue to expand their brand and product offerings, it is no wonder they’re now running more promotions, and spending more on POS campaigns, and doing it more frequently than ever before. POS, from custom to permanent signs, menus and B2B sampling continues to increase beyond the tracking capacity of even the most comprehensive spreadsheets.

Even if the spreadsheets are kept up-to-date, there is always the time it takes to consolidate the spreadsheet data from the various sales teams and correlate POS data to revenue or case sales. Just a few short years ago, it was not uncommon for a beverage alcohol distributor to have, at most, only a couple hundred SKUs within a few dozen brands.

Today’s distributor – especially now that distributors have added non-alcohol beverages and an ever-growing portfolio of spirits, wines and craft and import beers – will find it virtually impossible to keep track of POS ordering, production and placement. Spreadsheets were put in place in response to the inefficiencies of completely paper-based POS tracking systems, but today, tracking using spreadsheets is inefficient and many have simply reached the limits of a spreadsheet’s scalability.

The Growing Demand for Digital Tools

Today, digital tools are required to track, measure and manage POS spending. A growing number of distributors have come to the realization that POS ordering systems are or in some cases already have reached their limits of sustainability – all they can do, typically, is place a POS order. The most agile distributors, often accustomed to operate (since 2008) with a reduced or no IT department, are turning to SaaS (cloud or Internet-based) POS management systems that allow them to transition from completely manual or spreadsheet based tools to fully digital tools – giving them the time to focus on creating, managing and fulfilling demand rather than chasing paper.

OnTrak’s POS Tracking Software

Of course, the digital tools I’m referring to here are from OnTrak; products like SignTrak®, PermaTrak®, MenuTrak™ and SampleTrak™ allow you to extract key POS spending data into reports and spreadsheets that enable beverage distributors to see a complete picture of where what and when POS was deployed, what products were promoted, and how much was spent over the past week, month, quarter or trimester.

A correlation of sales of products to POS promotions is also possible so that distributors can actually see the top-line impact of their POS initiatives. Supplier reports can also be created with a few clicks, thus compressing the time from POS spending to the recovery of supplier POS dollars (allowances). Suppliers can have much more immediate insight into the impact of the POS sponsorships and co-op allowances. Data compilation, at one time taking so long, reports were delivered long after the promotional period had passed, is now compressed to matter of a few short hours often providing actionable insights for the upcoming promotional initiatives.

Reports correlating POS placements to sales, once thought to be either too time consuming, prohibitively expensive or virtually impossible, can now be run daily if necessary allowing near immediate analysis of the effectiveness of a current POS campaign. Using digital tools facilitates POS campaign management and insight into POS promotions, costs and ROI analysis.

OnTrak Customer Feedback

A large mid-western distributor recently told OnTrak:

“The effectiveness and efficiency gains provided by OnTrak’s digital tools for POS have allowed us to do more effective POS promotions. The sales teams can now see what works and what doesn’t; we’re all much more aware of the top-line impact of our POS spending. We’ve become more efficient. OnTrak’s products have cut our costs by one-half cent per case delivered. ”

OnTrak’s Suite of Digital Tools Enables Our Customers To:

  • Have visibility into POS promotional activities
  • Streamline POS ordering and production, and improve communications between the in-house POS organization and the trade reducing errors and speeding POS to market
  • Eliminate guesswork as to which POS works
  • Organize all POS tracking, production, measurement and management data into a central point of control
  • Provide anyone who needs access to POS campaign information with access to real-time POS to sales correlation

All of the above enables you to quickly see and evaluate the top (and bottom) line impact of your POS campaigns.

Seeing is believing!

To learn more about all our products, including LineTrak™ (which provides tracking tools to manage draught line cleaning activities), please click the following button:

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Start Tracking, Measuring and Managing POS Marketing Programs


Why You Need to Start Tracking, Measuring and Managing Your Point-of-Sale (POS) Marketing Programs

Fond Memories

It is increasingly unlikely that anyone reading this blog will actually remember the economy that emerged after World War II.

I was born in the early 1950’s, and although it is true that I was alive during the post war, post great-depression period, I mostly remember reading about, not living what it was like in the aftermath of the war.

“The World” of my earliest memories only goes back to the late 1950’s. My recollection of our economy is only of a growing economy and an optimistic society, fueled by the almighty consumer’s quest for “more and better”. I remember, or at least I think I do, the birth of the shopping mall – a wondrous place, a shrine to conspicuous consumption and the place to go to “see it all”.

At the same time, manufacturers and suppliers of all these ingenious new consumer products continued to accelerate production of “more” thereby providing hungry consumers with a seemingly endless supply of new, innovative products on which we could spend our newfound, post war “wealth”.

Those were the days of apparently boundless consumerism, both fueled and satisfied by limitless producer innovation – correct?

Not so fast.

Consumer-driven growth, then, just as now, is not simply the product of an industry’s capability and capacity to make bigger and better things.

I would argue that the prime driver – or what actually fuels growth – is marketing, and to put an even finer point on it, advertising.

The Good Old Days?

Here, in our blogs, we’ve exhausted our nostalgic perspective of last century’s nuclear family sitting around the TV watching the Ed Sullivan show or Ozzie and Harriet as the consumer goods manufacturers of the day injected their advertising messages directly into our collective cerebral cortex. In a typical evening of watching TV together, the entire family would see product promotions for consumer packaged goods, or what we now call CPGs, on the three available channels – ABC, CBS and NBC.

It didn’t even matter what network you watched. For the most part, the advertisements were identical on all three – we all knew Maxwell House was “Good to the last drop, and that “Winston tastes good, like a cigarette should”, no matter which network we watched. “Plop, plop, fizz, fizz,” and all that jazz.

Big brands were conceived, developed and launched via what we now call “traditional media” – and these big brands expanded nationally. With the vast majority of the population exposed nightly to the same messages, it was no wonder marketing or advertising is now credited with the meteoric rise of brands, including many of today’s giant CPG firms, including Kellogg’s, P&G and Anheuser-Busch to name a few.

The Better New Days!

Marketing and advertising today are even more important than ever before in the process of creating, building and maintaining brands.

The reason for this is that consumers are more fragmented now than they have ever been. So CPGs marketing programs have had to fragment, or segment in today’s market in order to retain their power and ability to inform and persuade the targeted market to buy.

In other words, “the primary engine" of our economic growth was and still is marketing!

And, the most effective marketing tool available to drive growth of CPGs is point-of-sale marketing –Targeting consumers at “The Moment of Truth” when a shopper becomes a buyer.

Any manufacturer who wants to establish or build a brand recognizes that we are currently moving through the “Era of the Shopper”. One of the hallmarks of this era is the rapidly declining effectiveness and increasing expense of traditional marketing: Declining effectiveness coupled with increasing expense is a recipe for free-falling profits.

What can you do?

Track, Measure and Manage Your POS Marketing Programs

If you’re a manufacturer, distributor, or even a retailer, one of the first orders of business in your quest to build and grow your brand or “increase sales”, is to begin to track and measure the impact of your point-of marketing or advertising.

It may have become a corny phrase, but it is true –

“You can’t manage what you don’t measure”.

Considering how little, if any, measurement of the effectiveness of point-of-sale marketing or shopper advertising is currently being done by CPG manufacturers, it seems obvious that there’s a lot of low-hanging fruit to be picked from the “tree of at-retail marketing”.

It may seem way too easy to say that “all you need to get started” down this road to optimized point-of-sale marketing is the selection of a couple of key performance indicators. Indicators that when correlated to sales, can suggest which of your at-retail marketing / advertising programs truly produce improved sales.

Finally, I’m going to let you in on another little known fact:

The software tools to enable you to automatically track, manage and measure your point-of-sale marketing / advertising programs are so inexpensive and easy to adopt you probably wouldn’t believe me if I told you what it costs to buy and implement them.

Give us a call and be prepared to be surprised. If you choose not to call, you’ll be missing out on a marketing game changer.

For more information about our point-of-sale tracking software, please click this button:

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Draught Line Cleaning – Part 3 – The OnTrak Solution - LineTrak


Draught Line Cleaning – Part 3 – The OnTrak Solution - LineTrak™

This is the third of a three-part blog discussing the tracking of draught beer line- cleaning.


In Part 1, “The Problem,” we introduced, defined, described and discussed draught-beer line cleaning.

In summary, draught-beer lines need to be cleaned at least every two-weeks to keep your beers tasting great. In some states, beer line cleaning is the retailer’s responsibility, but overall, beer distributors have a vested interest in making sure their customers’ draught-beer lines are clean.

In Part 2, “Possible Solutions,” we discussed several solutions to tracking and managing the draught-beer line cleaning process.

We identified possible solutions distributors might consider, with each one requiring the maintaining of a tap-line cleaning log and check list showing completion of the required cleaning steps. A number of options were discussed, summarized as follows:

  1. Wholesale distributors could choose to sub-contract draught-line cleaning to a third-party provider and also require that they provide both distributors and their retail customers with detailed reporting including “when” the lines were cleaned and “what steps” were completed, with customer sign off;

  2. Wholesale distributors could elect to develop their own software application designed to be used by the distributor’s own line cleaning crew their device of choice or,

  3. Wholesale distributors could choose to subscribe to an already developed software application that can execute in an Internet connected, or stand-alone environment, and on virtually any form-factor, such as a tablet, iPad, Android, or Surface device.

What is OnTrak Doing?

In Part Two, we also noted that OnTrak Software is currently developing a tap-line cleaning and tracking application that will address the needs of beverage distributors to meet the requirements of their suppliers to take on the task of line cleaning or; what to establish a “best-practice” to gain a competitive advantage as a superior draught-line cleaning provider.

After having solicited the input of several distributors and our customers, we are confident we will soon be bringing to market a robust digital tool – A software ‘App’ that provides verification of draught system cleaning so you can be confident you are serving a consistently great-tasting beer.

Introducing LineTrak

As mentioned in our last blog we’re already in the development stage of this software. It should come as little surprise that we’ve christened this new software “LineTrak™”.

LineTrak replaces a paper-based system, providing visibility into a two-week schedule and cleaning activity records, including customer acknowledgement.

As part of our LineTrak™ offering, we listened to our target market (beer distributors) and we determined the new application will be developed to run on tablet-type form factors.

We’ve also come to the conclusion that the most beneficial tool for our customers would be one that provided both a connected and unconnected capability allowing users in the trade to work with the app even in off-line situations (on either PC/Windows based tablets or more typically Apple and Android form factors, e.g., iPads).

Current LineTrak Features

We determined that unlike most apps, a centralized administrative functionality would also need to be developed by our technical team that would provide companies with the following features:

  1. Access to Back Office Application’s Data

  2. Account Line Cleaning Assignment/Scheduling

  3. Daily Synchronizing of the Off-line devices with the line cleaning central administrative/scheduling system

  4. Survey Question Responses

  5. Reporting Including: Activities by day and by Rep; Activities by week and by Rep; Cleanings scheduled but not completed

  6. Line Cleaning Vehicle Tracking (GPS)

Naturally as we begin to roll LineTrak™ out to customers, the product will continue to grow as new features and functions are identified. At this point, however, we’re excited to be well along the process of developing the app and are – today – anxious to discuss, in greater depth, the features and functions of this valuable new digital tool for beverage distributors.

Product Demonstration

If you’d like additional information about LineTrak, you can schedule a live demonstration of the product's features and functions.

We are also interested in your feedback regarding any possible additional requirements that would help your distributorship.

Please click the following button to request a 15 minute demostration, or you can call Denis Clark @ 513.936.4032.


Draught Line Cleaning – Part 2 – Possible Solutions


Draught Line Cleaning – Part 2 – Possible Solutions

What are the possible solutions to your draft beer line-cleaning problems?

In our previous blog posting, Part 1, “Draught Line Cleaning – The Problem”, we introduced, defined, described and discussed draught-beer line cleaning.

draft beer line cleaning and trackingIn summary, draught-beer lines need to be cleaned at least every two-weeks to keep your beers tasting great. In some states, beer line cleaning is the retailer’s responsibility, but overall, beer distributors have a vested interest in making sure their customers’ draught-beer lines are clean.

Most beer distributors offer draught-beer line cleaning to their customers either because their suppliers require it, or they want to maintain a competitive advantage with their customers. The routine cleaning of the lines may be carried out by the distributor themselves or by a specialized draught-beer line cleaning company.

The Total Cost of Draught Line Cleaning

Top-25 distributors can, undoubtedly, spend millions every year on line cleaning.

Even relatively small distributors have told us the annual costs to clean draught-beer lines can easily be a six-figure number.

Unless there are changes to local or state regulations, it is likely that beer distributors will continue to bear both the responsibility and costs associated with line cleaning. Additionally, beer distributors and their suppliers actually do want control over the line cleaning scheduling simply because draught-beer taste and quality are compromised by dirty tap-lines.

During the past couple of years there have been many cases of lines improperly cleaned or lines overlooked during cleaning. Sour tasting beer and beer with “chunks” are something no draught-beer retailer wants.

Even worse is when the lines are cleaned improperly resulting in cleaning chemicals not being completely flushed out of tap lines. These chemicals are almost always caustic and very often poisonous. When all of the steps required for proper cleaning are not completed and documented there is always the risk that a bartender could unknowingly be pouring a glass full of cleaning fluid rather than beer.

When a customer or a customer’s customer is harmed the real costs can go through the roof.

The Impact of Craft and Import Beers on Line Cleaning

During the past few years there has been an explosion in the numbers of craft and import beers coming to the market. More craft breweries are coming on-line virtually every day. These brews often come to a given market first as draught-beer, then at a later date they’re either withdrawn from the market, or are so successful they begin to be distributed in bottles, cans and growlers.

Craft brewers are even more fanatical about line cleaning than the majors (Anheuser-Busch/InBev or ABI, and MillerCoors or MC) – if that’s possible.

For example, it is not uncommon for tap-line #1 to have “Ranger” flowing through it for a couple of weeks (Ranger being distributed by the local MC wholesale distributor or WD). Then in week three, tap-line #1 is switched to “Hop Head Red” (distributed by the local ABI WD). The MC rep affected by this change will let his management and WD operations know, and tap-line #1 will be withdrawn from the MC WD’s cleaning schedule. Unless line cleaning records are kept current by both distributors, and line cleaning data is shared with the retailer, it is certainly possible that tap-line #1 will become essentially an “unclean orphan line”.

That line may be ignored by both distributors and the retailer – until a customer comes to the bartender and says something equivalent to “waiter, there’s a fly in my soup” but more like, “bar tender there’s a chunk of something floating in my beer”.

Unlike Bud or Miller branded beers which are exclusively distributed by AB or MC WD’s, “Fat Tire,” for instance, may be distributed by either the local MC or local AB distributor (or in some rare cases a craft and import only WD). If the New Belgium Brewing sales executive for your region finds a distributor (you) out of compliance with New Belgium’s policies, it is not impossible to imagine that distributor will “lose the Fat Tire franchise” so to speak.

In such a circumstance as described above, there are no winners, only losers.

What Are The Requirement For a Line Cleaning and Tracking System?

Here is just a sample of the input we have received from talking to beer distributors who are our customers. They want and need:

- A solution that allows both the distributors and retailers to keep track of the line cleaning schedule, including a check-list indicating that every line-cleaning step required has been completed. This would go a long way to ensure the retailer’s customers are always served the freshest and best tasting beer possible.

- A system that would let suppliers, distributors, on premise retailers and their patrons to know the status of the “draught-beer transport system they rely upon to guarantee them their best beer taste possible.

- A program that would allow suppliers to monitor their distributors for greater accountability in regards to the many aspects of the distributor’s operations; including the actual draught beer delivery systems present at the on premise consumption retail locations.

- A tracking system that would allow supplier representatives, during a routine ride-along, to see evidence at on premise locations that their distributors are complying with their “best-taste” and “fresh-beer” guidelines.

- A line cleaning log that is kept by the distributor and readily available at the retailer’s location would, for most suppliers, become a fundamental requirement for the distributor to retain the rights to distribute their products.

Again, we value your feedback, so please comment on this posting.

The Sub-Contracting Of Line Cleaning

One possible solution to your need to track and manage your draught-line cleaning responsibilities could be the sub-contracting of draught-line cleaning to a third party provider. You could require that third party to provide both you and your retail customers with detailed reporting including when the lines were cleaned and what steps were completed, and by whom. Unfortunately sub-contracting to another firm does not release your company from making sure the line cleaning was performed on schedule and correctly. You are still accountable for the meeting the standards as well as documenting the results.

Software Applications to Track and Manage Line Cleaning

Another solution could be for your distributorship to develop your own software application designed to be used by your own line cleaning crew on lap-tops, tablets or smart-phones.

Of course, your application would have to include route and customer scheduling information, a line cleaning check-list, and a recording of customer or supplier acceptance criteria, among several other features and functions.

You would also have to be able to change the application’s functionality to adapt to market changes, and you would also have to be able to provide full-time help-desk support for the line cleaning crews using the application in the trade.

Don’t forget, this would be an information technology solution, so you might have to hire and retain a staff to provide ongoing maintenance and upgrade support as well as device operating systems upgrades which may impact the operability of your application.

There’s An Easier Way - The OnTrak Way!

A third, and perhaps a better option, would be to subscribe to an already developed software application or “App” that can execute in any environment, on virtually any device you might adopt.

As luck would have it, OnTrak is currently developing a new application called LineTrak™ based on the requirements collected from a wide variety of beer distributors across the nation.

We are still seeking additional input to determine if there are any other “universal” features and functions you may come up with. You can submit your requirements by commenting on this blog.

We welcome your feedback. Perhaps it will lead us to deliver that “app” to you!

The next blog topic will discuss “Draught Line Cleaning – Part 3 – The LineTrak™ Solution”: An “App” that will help you track and manage the process of keeping great beer, tasting great.

To learn more about OnTrak and the current solutions we have developed for companies that distribute beer, please click this button.


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