WHAT’S BREWING: KEY ACCOUNT MANAGEMENT - SELLING NEW ITEMS

Just like that, summer is over and the holidays are approaching. That can mean only one thing…Spring 2018 resets are just around the corner!

With a new Craft Brewery opening about every 11 minutes the flow of new items is never ending. New styles, new packaging, new pricing and large system migrations within large, national grocery chains in 2018 will keep Category Managers and Analysts very busy.

New and established breweries need to continually innovate as retailers demand new offerings for a Craft consumer base that is constantly exploring what is next.

In order to maintain their share of shelf space, the large, established Craft Breweries continue to maintain a steady flow of innovative brands, styles and packages. New items are heavily supported by these breweries with creative social media, consumer promotions, retail events, special pricing, large sales teams and distributor incentives.

Local or Regional Craft Breweries with limited budgets may only be able to support their great liquid with basic social media messages, a handful of sampling events and possibly a sales rep and a great tap room experience where consumers can sample and become part of the culture of the brand.

Are they at a disadvantage without the large sales and marketing budgets the established brewers have? Yes, in fact they are now more than ever.

I recently organized several meeting days where over 30 Breweries presented their 2018 new items to Category Managers for the largest grocery chains in the market. Brewery representatives from large and small companies had 15-30 minutes to present their new items to buyers that are driving over 70% of the grocery business in Chicago.

In the off premise world, this is the Super Bowl. Getting in front of these buyers and making a great sales pitch can make or break a new item and even a brand. This is the biggest meeting of the year for any brewery, period.

When I was a National Account Manager for a large Craft Brewery I would spend hours and hours preparing for meetings like these and I always had butterflies in my stomach waiting in the lobby at the buyers’ office for my turn to present.

For most of the smaller breweries, including the locals, their reps have little or no experience making a sales call to chain buyers or Distributor Brand Managers.

With buyers and distributors having to choose from several hundred new items for 2018, making an effective presentation is essential.

Do you have the right new item for the retailer and the distributor in 2018?

At a minimum every new item presentation should include
* good story

* great liquid

* right package at the right price

* promotional plan

* what’s in it for the retailer and distributor

Here are some general guidelines for any new item presentation:

New Item Presentation Guidelines:

1. Prepare a brief presentation (10 pages maximum):
   *Brewery Facts/annual production/awards/tap room/team
   *YTD sales and distribution review
   *Results vs. goals from ABP
   *Brand Marketing including advertising, social media, press coverage, awards
   *Market data including chain distribution, key program results, on premise distribution, success stories, syndicated data etc. Need to create “what is in it for me”
   *Recommended items to delete with supporting data
   *Competitive Price Survey

   *Support plan (pricing, post-offs, margins, samplings, meet the brewer events, consumer sweepstakes, incentives, coupons, tap takeovers etc.)
   *Estimated annual case sales for new item
   *Estimated annual dollar sales and gross margins for new item
   *New Item Cover Sheet and New Item Form
   *SKU priority ranking

2. Bring cold samples and cups for tasting

3. Bring live package samples for leave behind 

As you might expect the larger breweries with the most experienced reps made effective and thorough presentations during those chain buyer meetings I mentioned.

As you also might expect, smaller and more local or regional breweries had the smallest presentation decks, less new items, less data, less retail support plans, less brand marketing and lower dollar sales and margin projections.

What some reps lacked in their presentation materials they made up with in their passion and love of their product.

But in 2018 and beyond, in my opinion, being local or having passion and love for the brand will not get as many new item placements in large, grocery chains as it recently did.

Less is more these days.

In 2017 Wal Mart made a statement when they reduced their Craft assortment in favor of adding more space on their shelves for high volume packages that were out of stock on weekends and costing the retailer lost sales and profits. This was at a point in time of the Craft revolution where consumer and retailer enthusiasm for Craft beer may have hit a peak.

Other retailers took note of this latest tactic from Wal Mart.

We may be starting to see other retailers backing off on adding duplicate packages and “me too” items that will never sell at the level the largest brewery packages do.

I believe we are seeing an increasing strategy in the grocery channel to “swap” items and the total sku count for the Craft Beer segment may not grow as it has in recent years.

A recent IRI study I conducted showed that in most markets, 60-80% of the Craft Beer segment is driven by only 5-7 Brand Families. That’s it.

These are the same statistics I have seen over many years which tells me that there is a lot of churn and not a lot of growth.

My humble prediction for 2018 and beyond is that Craft Beer shelf sets in large grocery chains will see more emphasis on large brands with high volume items that get supported well and less on Regional and Local Craft brands.

I do not see Craft Beer share of total space growing in 2018. And maybe beyond.

Key Account Guidelines:

If have new items in 2018 and want to be a chain brand, understand which chains will generate the most volume and therefore the most success for your brand.

Understand what the movement criteria is and what the margin and promotional requirements are for that retailer. Where will your item get placed on the shelf? Will it get retailer support including ads, displays, feature pricing, cold box placement and email blasts to their loyal customers? What is the role of the Craft Segment for that retailer and what does the competitive set look like?

Will your item be on the shelf one year but deleted the next? What impact will there be on brand health when your items did not make it in “key” chains?

For some brands, the right place to hunt for new distribution in 2018 may also include key independents and large liquor stores that are still growing Craft assortment. These types of retailers have less demands than grocery chains on immediate sku productivity.

Before you know it 2018 will be here. Will your new items get placed in the right stores?