One Blog |November 2, 2017 | POS Tracking Software
OnTrak Software's Long-Term Commitment to the NBWA – 2007 to 2017
2017 NBWA – Standing Up for the Independent System
We just returned from the 80th NBWA Convention and Trade Show held again in Las Vegas. This is our 11th consecutive year of participation.
This year's outgoing Chairman of the Board, Paul Bertucci of F.E.B. Distributing Company in Mississippi, opened the convention. According to Bertucci, he has witnessed changes coming faster than ever before. As if on cue, he noted Amazon’s new status as a “Brick and mortar retailer with a license to sell beverage alcohol.”
Next, NBWA CEO Purser assured convention attendees that: “When others attempt to uproot this effective, independent system, we're working together to stand tall and stand firm."
According to Purser, the NBWA and its members are working closer than ever with state associations. Purser echoed the theme that over the past year there had been remarkable and unprecedented changes, including macro breweries buying more craft breweries and an attempt by non-traditional retailers to broaden their retail footprints.
The talk often circled back to Amazon. Purser noted: “Amazon now has nearly 400 retail licenses to sell alcohol.”
Overall, Purser was upbeat, noting that: “We’ve seen challenges to beer and the three-tier system before.” Costco attempted to undo state alcohol regulations and of course there was the takeover of Anheuser-Busch nearly 10-years ago with the concern being AB InBev would try to buy up distributors and attempt to self-distribute their products.
Purser added, "Disruption and change are nothing new to this industry." He summarized and finished with a few observations:
- We need more solid data and better information to better understand the opportunities in the industry;
- We need to fiercely protect our marketplace position; we need to market and sell against wine and spirits; and,
- We need for the breweries to stop giving their distributors busy-work that doesn’t help sell more beer. (This line garnered the loudest applause of the session).
Other General Session speakers offered their observations on the beer category.
Heineken USA’s top man noted that, “Beer is losing 11,000,000,000 servings to wine and spirits annually". In response to the implied question, “What are we to do?,” one answer given was to focus on beer marketing to be more inclusive of women, for example. Other speakers cited lack of shopper insights.
When people talk about the need for more data, or a more effective way to market and sell beer, we light up. We also know that as the number of beer brands explodes distributors are challanged to represent those brands cost effectively.
To our ears, this means implementing systems that give beer distributors the capability to track, measure and manage POS marketing data – which just happens to be our core competency and strength.
This year’s NBWA convention, our 11th, was the most “exciting and excited” meeting yet. We’re looking forward to what the next 10-years has in store – here’s to “never a dull moment.”
If you’re looking for shopper insights, at-retail marketing efficiency, cost tracking, supplier compliance measurement, and point-of-sale bill-back recovery improvements, “who ya gonna call?” Call OnTrak!
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If you’re interested in learning more about how OnTrak Software helps beer distributors, please call
513-936-4041, or click the following button:
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An NBWA Historical Perspective
We hope that you will enjoy and benefit from the following historical perspective. We think our long-term involvement makes us better as a software provider to the beer distribution industry.
The things we have experienced and learned we look forward to sharing with you.
Rick Flagg is OnTrak’s Chief Technology Officer. With 10 years of experience leading OnTrak software product development team, and implementing and supporting our software at hundreds of beer, wine and spirits distributors, he has a unique perspective on the beverage alcohol distribution marketplace.
According to Rick, “Over the past 10 years, I’ve seen beer distributors – especially small and medium-sized distributors – much more rapidly embrace new technologies, including smart conference rooms, warehouse management, green energy, and, of course, both state-of-the-art back-office and point-of-sale tracking and management systems.
He adds, “Now, most distributors, regardless of size, innovate new technologies at the same pace – it’s not just the big distributors who do this.”
Rick and our team reflect back on some key NBWA milestones over the previous 10 conventions.
2007 – The Great Recession and Consolidation
OnTrak Software (known as SignTrak, LLC in 2007) first exhibited at the annual NBWA convention in the fall of 2007.
Back then we had one product – also called SignTrak – and perhaps a half-dozen customers. We attended as many NBWA breakout sessions as we could, and set up our booth in the trade show pavilion to introduce ourselves to America’s Beer Wholesalers.
At that time, the US was months away from entering what became known as The Great Recession.
Also, the Great Consolidation of beer distributors had started paring the number of Anheuser-Busch and MillerCoors wholesalers as larger distributors acquired smaller distributors.
Over the next few years it became known that beer sales, previously thought to be virtually immune to economic downturns were no longer immune.
The Great Recession, like all economic upheavals, was the best and worst of times for many in the middle-tier.
On the one hand, many previously viable small and medium-sized distributors found themselves facing a choice of almost certain failure or “consolidation”. What that really meant was they would sell their family-owned businesses for the highest possible dollar they could get during perhaps beer sales first-ever negative sales growth periods.
On the flip side, medium, large and very large beer distributors were able to acquire territory at somewhat of a discount and grow their sales by acquisition rather than organically.
All beer distributors, or so it seemed, began taking long, hard looks at their processes and systems in an attempt to do things previously thought to be unnecessary. Beer distributors, prior to the recession, were sometimes slow to implement technology innovation to gain operational efficiencies. The reason? For decades they had not needed to, until a dose of economic reality rocked their world.
New policies and practices were adopted and new spending on infrastructure and systems were undertaken with the goals of increasing the top-line, decreasing the expense line, and improving the bottom line.
2009 – Growth in Distributors and Breweries
By early 2009, the NBWA was celebrating “over 2,850 licensed beer distributors” and they were also welcoming and celebrating more than 1,400 breweries to Craft Beer Week.
Brewing and distributing were still changing in response to the Great Recession, despite the fact that by June, 2009, the recession was “officially” declared over. Through first quarter of 2010, nearly 9 million jobs were lost.
2009 was a year for a victory for the NBWA and beer distributors, when: “In a clear and convincing win for the 21st Amendment and for state-based alcohol regulation, the Second District Court of Appeals ruled in favor of the existing, effective laws of New York State in Buy Rite, Inc. v. Boyle. Buy Rite was an Indiana-based retailer seeking to ship alcohol direct to residents of New York. The Court ruled that New York’s laws “Do not discriminate against out-of-state producers in violation of the Commerce Clause."
At the 72nd NBWA convention in 2009, NBWA President Craig Purser talked about the impact of the economic downturn and the political changes had on the beer distribution industry. “While corporate America has used the economy and their challenges to make significant cuts, beer distributors have sustained the 95,000 quality jobs across this great country. Why is that? I think it is because beer distributors know that employees are their strongest asset, and because distributors understand the importance of doing the right things during difficult times,” said Purser.
Over the next few years and the associated NBWA Conventions, Trade Shows, and Product Demonstration Showcases, wholesale beer distributors, mirroring the larger US economy, began a protracted period of recovery, and in some cases rebuilt entirely.
2012 – Turning the Corner
By the time the 75th NBWA convention rolled around in 2012, the NBWA’s mood had brightened considerably but there were still areas of concern as noted during the general session, October 14th:
“Current challenges facing the beer distribution industry, including supplier deregulatory efforts, preemption of state law in favor of federal law, franchise law issues, branch expansion, forced consolidation and self-distribution were identified.”
Additionally, then Chairman Steve Lytle observed:
“Unintended or not, actions by our largest brewers that confuse and blur the lines between the three tiers of our system, like in Illinois, or seek to preempt state franchise law, like in Virginia, serve to weaken confidence in our long-term partnerships and undermine the distributor’s independence that is central to our mutual long-term health.”
By the end of 2012, the number of “licensed beer wholesalers” had grown to 3,300 and the number employed had grown from 95,000 in 2009 to over 130,000.
2013 – NBWA Surges Ahead
One year later, at the 76th NBWA convention, one of OnTrak’s largest customers, DeCrescente Distributing Company, was named “2013 Craft Beer Distributor of the Year.” 2013 was the beginning of a “surge” in NBWA Annual Convention participation when a record audience of nearly 4,000 Convention attendees was welcomed to the General Session by NBWA CEO, Craig Purser, who said: “Your presence here shows the great energy that is fueling the beer distribution industry right now!”
2015 – Open and Independent Distribution System
By 2015, at the 78th convention, NBWA President and CEO Purser highlighted how distributors can prepare for the future, especially in a dynamic industry operating in a marketplace “evolving right before our eyes.”
From our perspective, Purser pointed to the successes of the open and independent distribution system, citing that, in the 1980s, there were fewer than 50 breweries operating in the United States. Now there are now 4,000 breweries in operation across the country. Little did he know what would happen over the next 24-months.