and thoughtful branding, including, in many cases, strategies to activate key influencers as early brand adopters.
Start at Home Highlighting a brand’s relevant differentiation in its home market to focus on a success blueprint that can be replicated in other markets serves as a good starting point. Taking advantage of distributors, retailers, and support in the local market strengthens the home field advantage. Focusing on independent, on-premise retail accounts may not seem worthwhile due to low sales volumes; however, these accounts provide good visibility, a relatively easy starting point, and the ability to establish a mutually beneficial relationship between a bartender’s brand and a supplier’s brand. This lower level of complexity and difficulty is attractive in the early stages of a brand’s lifecycle. From there, working up to big boxchain off-premise retail accounts may prove more multifaceted and difficult; however, these accounts have the highest volume opportunity (after a successful launch) and early traction in the market can be leveraged to help maximize the likelihood of success in penetrating larger accounts. While it is difficult to get listed in big box retailers, it is easy to get delisted. Thus, for an emerging brand, it is crucial to ensure that the one shot with the large players is the right one at the right time. Prior to this, a supplier can sell as a first placement to many retailers, but it is important to consider that reorders are the single most important factor to evaluate the viability of a brand from the perspective of distributors. A retailer who reorders product has experience and confidence that the brand will continue to sell. Following a fine tuning of the micro or test market in the home market, this blueprint can and should be replicated in expansion markets.
Help Your Distributor Help You Even with a differentiated brand and the right distribution partner, there is no silver bullet for distribution. Ultimately, distributors have a certain degree of freedom and power, but are limited by the desires and needs of their customers. Distributors often are critiqued for their performances when this may be confused with lack of consumer demand and/or retailer
rejection. In order to secure a brand’s fair share of attention with the distributor, most often the concept of share of contribution serves as the guiding force. As such, it becomes challenging for distributors to pay attention to small brands for fear of risking large supplier relationships. Therefore, the key becomes one in which smaller suppliers themselves need to create retail demand for their products. This breaks the fair share of attention cycle and can be achieved via supplemental sales efforts. Some examples of how to achieve fair share (or above fair share) of attention with distributors include offering larger margins and incentives, communication in the form of presentations, “ride alongs” and follow ups, as well as in-market sales, brokers, and brand ambassador support. Keep in mind that distributor sales representatives may work with hundreds, if not thousands, of products within a portfolio. For instance, large suppliers pay significantly smaller gross profit percentages (typically 15-22 percent) than small suppliers (25-35 percent). Larger margins can increase a brand’s attractiveness to distributors. Moreover, training and presenting at sales meetings to distributor sales representatives assists in increasing brand awareness within the particular distributor. Sharing milestones during these presentations or “ride alongs” forges personal connections and creates an impact of success with salespeople. Focusing limited resources on particular distributor salespeople and their account universe can help to create success stories that can be relevant to the particular distributor and create winning images for the brand. Understanding the reasons for consolidation by suppliers and wholesalers can help entrepreneurial brands craft an effective approach to the U.S. market that will optimize resource investment and maximize opportunities for success. Using supplemental sales resources, creating relevant differentiation - primarily through badge value - and working effectively with distribution partners are keys to growing a brand within today’s framework and context. If used effectively in a route-to-market approach, these elements help to create a pathway for brands to be successful within today’s alcoholic beverage landscape.
Sarah Nagel Sisisky is the Client Development Director at Park Street in Miami, Florida. For more information visit www.parkstreet.com or call (305) 967-7440.
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