What’s Your BEST, POS Marketing Best Practice?

Categories of Best Practices

Beer distributors fall into two broad categories when it comes to best practices:

1. Beer distributors who want to know what is considered a best practice and then will adopt it and strive to make it work.

2. Beer distributors who seem to barely care or know of best practices, and rarely even gives lip-service to the concept.

This categorization probably applies beyond beer distributors to wine and spirits distributors but for this blog post the focus will be on beer.

Truth be told, there are many shadings of best practice acceptance and rejection between these two categories.

Generally, these are the two dominant categories distributors fall into with respect to best practices based on our working with distributors over the last 10 years.

“Best Practices Are Not for Me”

When we are confronted with a distributor who seems to believe “Best Practices” are for other distributors, I’m reminded of the movie, “Treasure of the Sierra Madre” where this famous quote is uttered:

“Badges? We ain’t got no badges! We don’t need no stinkin’ badges!”

Of course, what I’m hearing is “We don’t need no stinkin’ best practices!”

But if you want to be a leading and profitable beverage alcohol distributor, aren’t best practices something to strive for?

And since it has been shown that effective POS Marketing drives sales, then why not POS Marketing Best Practices?

Makes sense to us. Why not to everyone?

Best Practice Perspective from Those Who Know

Perhaps Beer Business Daily’s Harry Schumacher best sums it up:

“The sharing of Best Practices at the distributor tier is falling behind the type of benchmarking brewers and retailers are doing. Despite innovations like the KEG groups and A-B's Wholesalers of Excellence, there's been precious [little] cross-pollination between distributors of different brands, sizes, market shares, and markets. While you may think a 20 million multi-market case distributor may not have anything to learn from a million-case distributor who operates in one contiguous market, we've surprisingly found the opposite.”

Schumacher continues:

“Saving money in the warehouse, delivery, sales structures, merchandising, draft line cleaning and management, fleet management, cooperage management, POS management, human resources and talent retention, the latest in technology management, allocating resources to the right places to gain the best ROI are just a few of the best practices that need to be discussed and understood by distributors today.”

Harry Schumacher is publisher and owner of Beer Business Daily, an independent, knowledge-based publication that shares information needed to empower effective managers and leaders in the US commercial beer industry.

Every year, Beer Business Daily hosts the Distributor Productivity Summit, an event that helps distributors become strategic and tactical and in their thinking about the business of beer by sharing the everyday events and people that drive the industry.  Attending these kinds of industry events expose you to the best practices that will help you be a better distributor AND save you time and money in the process.  

From Our Long-Term Customers

According to several of our long-term customers (of varying sizes from across the country) speaking generally on the topic of “Why we need to practice Best Practices”:

“Today, virtually all Macro Beer distributors are experiencing margins that are the slimmest they’ve ever been — and even though Craft’s margins (and often growth) are much more robust, Craft represents much lower sales numbers. Recent years have shown an overall decline in Macro sales, but Craft and Imports have seen double-digit growth. 

High End is really doing well but Big Beer brands like Bud and Bud Light, Coors Light and Miller Lite are either flat or in single-digit declines (again). Financial support (for all kinds of distributor programs) from Macro Suppliers, once generous, is increasingly hard to come by — some of the “program features” (support) formerly offered by Big Beer have been reduced or eliminated.

Big Beer is now opting to either co-op less or even charge for some “support programs” that not that long ago were offered free of charge. When incentives are offered they are increasingly difficult to “earn” — we distributors can no longer count on “cost sharing” for any number of programs (or requirements) we need to participate in with our suppliers.”

Our customers continue:

“The number of SKU’s we carry has exploded — years ago there may have been dozens of brands, then hundreds, now there are more and more SKU’s and more vendors every year than the previous year.

We are no longer single-supplier companies — many of us haven’t been for much of the ‘two-thousands’ — we’re opting instead to deal with numerous suppliers increasingly offering non-alcohol brands.

Competition — both here now and looming — is exploding; and, Amazon, not even on any beer distributor’s radar all that long ago may actually turn out to be a distributor’s fiercest competitor and then may seriously threaten distributors in some markets. Many of us are under siege, most of us are beleaguered.”

Why Are Best Practice Are So Important?

When we ask our customers what they consider to be of the utmost value to them, we will often hear “Linking business goals with technology goals,” or “Investing in a technology that yields an ROI that exceeds the investment made in adopting the technology.”

Other examples include making sure every sales person in the company has technology that will help them drive business.

Recently, we’ve heard this “leaky pipe, burst pipe explanation” from one of our relatively new customers — a distributor that we’ve been working with to become our customer for years:

“We’ve been losing money in our POS operations (both printed and permanent) for years — decades probably —  but because that ‘lost money’ is simply a trickle, not a flood, we never considered it a priority.

One day we added up what we estimated to be just our permanent POS losses for just one year and the number was both shocking and embarrassing — we came to the conclusion it doesn’t matter how quickly we were losing money, it’s a huge loss all the same!”

The "Same Old Way" Is Not Enough

From the perspective of POS, there are still distributors that say they have spent decades doing it the “same old way” and somehow, someway the POS gets out.

But that's not enough.

Increasingly we’re finding the skinnier the margins get the more distributors want to learn about “what works.”  

These companies are working hard to cultivate and develop better and better business acumen.

These are the companies who have discovered the “Best Practice of All” — Learning about what their peers are doing to get better.

And learning and knowing the best practices that will help them be the best.

Of course, we believe those who have implemented OnTrak are those that have a better business acumen about POS Marketing and really want to be a POS Marketing “best practices” distributor.

But you knew we’d say that, didn’t you?  

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