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August 2018

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« Part 5 - The Evolution of Beer Wholesaling | Main | The Evolution of Beer Wholesaling... continued »

Part 6 - The Evolution of Beer Wholesaling

Creating a Consumer Brand via Distribution

When most people think of a brand, they think of a product.  Bud, or Coors Light, or Miller Lite are not just products, they are also brands.  But a brand does not remotely need to even be a product.  Here are two definitions of a brand which where plagiarized from the web…

In marketing, a brand is the symbolic embodiment of all the information connected with a product or service. A brand typically includes a name, logo, and other visual elements such as images or symbols. It also encompasses the set of expectations associated with a product or service which typically arise in the minds of people.

A unique and identifiable symbol, association, name or trademark which serves to differentiate competing products or services. Both a physical and emotional trigger to create a relationship between consumers and the product/service.

I believe a unique opportunity presents itself in the beverage business today.   With the explosion of products in all beverage categories, the need for a “guide” for the end consumer is greater than ever, especially in the premium/super-premium categories.  How do the trend setters who start these brand successes find them in the first place?  What are their sources of information and support?  Of course there are publications, web sites, and that most valuable of all, word-of-mouth.  But can a wholesaler also play in this arena and more directly impact a product’s success?

Historically wholesalers didn’t attempt to “brand” and sell themselves to the end consumer.  They might push their company name (distributed by XYZ Distributing) but for the most part they took their product to retail and almost all of their focus was on solely selling the products they carried to the retailer and the consumer.  If they attempted to “brand” themselves to anyone, it was to the retailer, not the end consumer.  A few exceptions exist; some high-end specialty food wholesalers have made the leap.  For the consumer trend setters in the know, just the knowledge that this wholesaler carries this product is a badge of approval (some boutique wine/spirits houses have also achieved this).  These consumers then impart this approval to their circle of friends, etc. etc. and if lucky, the product takes hold and spreads.

There is great value for the distributor of any product who can effectively brand themselves to the end consumer.  This is the opportunity and challenge that confronts you.  The marketplace is ripe for this attempt at branding, especially as the beer wholesaler expands into wine, spirits, trend setting beverages of all types… areas where the end consumer is looking for an honest, trustworthy guide…  areas where past successful guidance draws the end consumer to those other brands which are also under the ‘approved by” seal of branded distribution.

Who You Are

Wholesalers around the country are struggling with defining who they are.  In many markets, my own choice for most is that they define themselves as distributors of premium beverages.  Limiting your corporate mission to any one beverage category is too restrictive, and expanding beyond beverages carries substantial risk.  Therefore, for at least the near-term I think the typical “beer” distributor needs to transform themselves into a distributor of premium beverages (supplementing their “normal” full-line beer business).  As I have mention in earlier articles in this series, if you are to enter new categories, from a distribution view-point it makes the most sense to always initially target the high-end.

Goal – Create a consumer identifiable brand so that when someone walks into an off-premise account (and on-premise where we can execute) and sees an XYZ Premium Beverages product(s), the product automatically goes up in stature.  The consumer is more likely to give our product a trial.  If they’re looking for something new (and we’ve met their needs in the past), they are more likely to go to our products – i.e. we create a brand, and those products that we wrap under this brand are given an automatic boast in stature.  This can help us sell both within a category and across categories.  The same person who drinks expensive whiskey drinks (or purchases) expensive gin, wine, beer, waters, NAs etc.  From a marketing perspective this is very likely the same person.  This branding gives us an opportunity to target this person.  They are looking for guidance and branded distribution becomes one source of this guidance, right in the purchasing environment.  We become a piece of that decision making process.  The impact could be minor or it could be huge – but it most assuredly won’t happen if we don’t try – and trying is relatively simple and low-cost. 

Not every product a wholesaler carries needs to be included as part of this branded distribution – in fact you wouldn’t want to.  Not every product will fit the strategic vision of this branded distribution – but many will.  You will want to carefully manage the branded distribution in the consumer’s mind.  Consistency.  Quality.  Stature.  A seal of approval.  You can probably roll many of your present craft/import beers - other products - into branded distribution, but not A-B or Coors or Miller or the mainstream stuff – this destroys the entire brand image, and instead takes you back to the “distributed by” which IS NOT a brand, and in most consumers minds get a response of “big freaking deal”.  You and your team must understand this – you are creating a brand – an image, stature, a seal of approval - not just telling the consumer who distributes the product.  If you don’t understand this, don’t waste your time trying to create branded distribution.

If you are successful, your suppliers will want to be carried as a branded distribution product – this gives you leverage with them that can be turned into extra marketing dollars, lower FOBs, more media support, etc.  In addition, if you get traction you can even take it to TV and radio.  In most situations I don’t think you’d have any legal issues since you aren’t selling any specific wine or liquor or beer or whatever, but rather the name of your branded distribution enterprise (the brand) – look for it – it’s a seal of approval.  This branding can be state-wide via the state-wide associations of which I’ve written, or just for a local market.  Since the vast, majority of your consumers live and shop in the local market, state-wide branding is not a requirement.

On launch you might be able to get a fair amount of PR in the local newspapers (perhaps TV).  Ideally, you wrap it around something – some type of expert, some “big deal”.

Only One Question

Only question is whether in your off-premise accounts, they will allow you to present a standard look and feel on all (most) of the marketing material – since you need to let the consumer know this is an XYZ product.  This can be in addition to the retailer’s look and feel, but you must have the means to convey the brand image to the end consumer.  And remember, a whisper often gets much more attention than a scream – a subdued, subtle approach may prove to be much more effective, especially with high-end, status products. 

If you can physically do this, then it is worth the minor cost of production of these XYZ materials.  You can advertise and create the brand through shelf talkers, display material, price cards, etc. Of course you can also execute in on-premise with various POS materials – that’s a given, the off-premise world is the only question mark.

Risk and Probability of Success

The only risk I envision is the loss of investment in the production of marketing materials and the personnel time used in attempting to create the brand – both planning and execution.  Neither of these is substantial.  The probability of success is difficult to ascertain.  There are simply too many unknowns at this time, the primary one being the end consumer.  Can we create a cohesive brand image which will resonate with the consumer and help influence their product choices?  I know it can be done, what I don’t know is whether you will be able to accomplish it – there are a lot of variables outside your control.  Other than attempting it, I see no method to further quantify this risk.  Considering the small amount of money required, this might be a justifiable expenditure.

I also don’t envision any product risk if this is attempted and fails.  If the XYZ materials simply stop being seen at retail, I don’t think there will be any product repercussions. If the consumers were paying that much attention, then we would not have failed in the first place!

Next Steps

If this is something you wish to investigate, the first step is to talk to your sales team.  Will retailers allow us to use our branded POS materials?  We don’t need 100% participation but we need a majority.  If they will, my vote would be to proceed with the attempt to create the brand (logo design, generic marketing materials, web site, etc.).  If not, I don’t see how you will be able to reach out and touch consumers – something you must be able to do if you are to build this brand.

Outside the box?  On yeah.  Out in left field?  Heck, we are out of the ball park.  Odds of success?  Couldn’t say.  Worth trying?  If you have the right product line or are expanding into more categories (especially wine and spirits), it might be worth at least a little time with the management team over a beer or three.



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