New and emerging suppliers of alcoholic beverages can relate to David in the parable of David and Goliath. Trying to break through in an industry dominated by a handful of immense and growing conglomerates can sometimes feel like an insurmountable challenge. However, there is one segment of the beverage alcohol industry that is exhibiting a meteoric rise. This one booming slice of the market is like David in the old tale of the little guy besting the behemoth. And in this allegory, mobile sales execution platform is the trusty slingshot.
The “Megabrew” global suppliers have been on a buyout bender in recent years, sucking all the oxygen out of the room for smaller breweries. As noted in this fascinating article by Derek Thompson of CityLab.com, mid-size breweries like Blue Moon, Pilsner Urquell, Boddingtons and others have all been absorbed into the vast portfolios of two companies. In fact, according to the article, the AB/MC duopoly controlled nearly 90 percent of beer production in 2012 – a condition that is proven to squash innovation and entrepreneurial opportunity in any industry.
Enter the “David” in our allegory – the craft brew segment – which has been running hard against the grain (HA! a distiller pun), and has been chalking up win after win. Thompson notes that between 2008 and 2016 the number of new breweries has sextupled, driving growth in beer industry employment by 120%. This was accomplished, despite the overall consumption of beer has declined in America. Interestingly, although less beer is consumed, the quality and variety of new brews has increased, resulting in more specialty focus and greater numbers of breweries producing less volume of product.
Thompson suggests the drivers behind the counter-intuitive growth of craft brew include consumers’ embrace of locally-produced products, increasing sophistication in consumer tastes (not well accommodated by bland macrobrews), rising entrepreneurial activity among workers displaced by the Great Recession in 2009, and changes to regulatory structures. But to understand how these entrepreneurial “Davids” are able to thrive despite the overwhelming disadvantage they suffer in terms of capital, budget and resources overall, industry watchers must consider the impact of sales and trade marketing automation tools built specifically for selling through the 3-tier structure in the US.
When you have so much less to invest in trade marketing, branding, sales outreach, brand activation and other key beverage selling activities, it becomes imperative to find ways to punch above your weight class as a small- or mid-size producer competing against marketing juggernauts. You simply have no margin for the error portion of the “trial and error” approach. Sales automation technologies like GreatVines, coupled with data analytics powered by industry data sources and others give emerging breweries a leg up and help to level the playing field to some degree.
Of course, it is still a daunting fight pitting any craft producer against the industry Goliaths. The effort required to achieve success is indeed herculean. However, we all know that an unlikely scrappy youngster with a sharp and targeted tool was able to find the hole in his adversary’s oversized armor and plant a shot right between the eyes of his gigantic adversary. Craft brewers already understand the value of fostering connections with their audience on a more personal level. Tools like GreatVines are perfectly suited to helping these suppliers work with surgical precision to get in front of the right markets and optimize their impact.
Do you have a powerful secret weapon at your disposal to compete against the Goliaths? Start here if you wish to find out more about our version of the slingshot here.