Brief consulting advice for the A-B wholesaler
Many A-B houses are in a unique position (for them) of facing margin pressure, exploding operating costs, and a tough selling environment. Most of your multi-brand competitors have already had their baptism under fire, now it is your turn. Some of you will be thinking, “hell, I’ve had my turn for the last five years!” Sorry, but I predict it’s probably going to get worse before it gets any better.
Many of your competitor survivors have had the experience of operating as a Coors/multi-brand or Miller/multi-brand house. Now they are most likely combined into a Coors/Miller/multi-brand house. They have had to live with much lower market share (which equates to less gross profit dollars) and learned to operate leaner simply out of necessity. Those that didn’t aren’t here any longer. In addition, they generally have most of the imports and specialty products, a growing category with higher margins which helps make up for the flat to down margins on their main stream brands.
This day was postponed for the typical A-B wholesaler – guess who’s at the door.
The first thing an A-B wholesaler should do is to look at return on payroll dollars on all managerial and supervisory positions (anyone that isn’t directly delivering, selling or merchandising beer). In far too many cases you are wasting money. Money that could be put to better use by putting more merchandisers on the street, building a stronger sales and delivery force, or simply driving it to the bottom-line. You need to demand a stronger ROI for every position in your organization.
In addition, why send an expensive, well-trained sales rep into a chain account if there are absolutely no selling opportunities? Why not instead hire 1.5 (or whatever) more merchandisers if that’s what the marketplace demands? By sending in over-qualified employees you waste money and demoralize the sales rep. Bad for your company from all perspectives.
Across all industries, businesses have gone to much flatter organizations; less managerial and staff positions. Pushing decision making as low in the organization as is possible (this has a tremendous positive impact on improving service but that’s another piece).
Don’t simply cut a couple of supervisory positions, look at your company anew and re-build it from the ground up. Don’t build your organization based on yesterday, it is long gone. Build it for today and tomorrow.
As you go through this process look at your type of service and frequency of service provided to your retail account base. In far too many cases you are over-servicing accounts – remember that ROI thinking? It needs to be demanded in every action you take. Service is not determined by how many times a week your truck is parked in front of a retail account. A leaner organization doesn’t equate to one with poorer performance – this either/or thinking is simply not true. But a leaner organization does require better planning, performance, and coordination.
A-B wholesalers have tremendously powerful and strong organizations, backed by one of the finest companies in the world. Now that you are enduring your baptism of fire, use your strengths to your advantage. Don’t run from these changes, embrace them. Make them yours. Grab the future and shape it to your will. It can be done; you simply have to have the courage and vision to do so. Quite using your supplier as an excuse, no one knows your accounts and their needs better than you. Build the right organization and let its performance prove your wisdom.