Happy 2022! As we roll into the new year, the LibDib team has begun to implement our latest plans which always includes a focus on the trends for the upcoming year. In the same tone as 2021, Tequila, RTD’s and Whiskey will continue to be the category winners. Champagne supplies will be short. These are the trends that everyone is talking about.
What else is the beverage alcohol industry, and more importantly wholesale distribution, going to see in 2022? Here are the LibDib predictions for 2022 challenges and opportunities.
Supply Chain shortages will continue.
The Challenge: This past OND, LibDib had a number of wine and spirits Makers with out of stocks. Unfortunately, no end is in sight. Bottles wouldn’t show up. Labels were three weeks late. Boxes. Corks. Foils. Everything was late. If you know anything about bottling as a small Maker, it’s very challenging if all the materials are not there on time. Labor is scheduled for the day. Sometimes there is a mobile bottling line involved (which is booked months in advance). If just one piece of the package does not show up for the bottling date, the whole thing gets pushed back and it can be weeks or months to reschedule.
The Opportunity: If you have inventory, now is a good time to be out there selling. There are a lot of “holes” on shelves and wine list placements have out of stocks. Go talk to buyers and see if you can help get some bottles to their customers in the short term. You might make a sale and a friend for life.
Logistics costs will increase through Spring, but it will get better in time for OND.
The Challenge: Gas prices are at an all time high. It takes fuel to get a 20-40 lb box of liquid in glass, cans, plastic, pouches, or boxes somewhere. The labor market is also challenged, especially in January as Omicron continues to burn through the globe and workers are sick or taking care of loved ones. However, all signs are pointing to a hopeful Q2 (pandemic wise). And gas production should catch up with demand by the end of Q3. Until then, expect fuel surcharges and increased prices all around.
The Opportunity: Don’t raise your prices. Take a little hit with extra fuel charges and logistics fees. All signs are pointing to it being temporary. Everyone else is raising prices. If you stay the same, tell your Buyers you are taking a small hit now. It will be appreciated.
E-Premise will be part of every Maker’s marketing mix.
The Challenge: There’s really no challenge here other than for Makers to think differently about their distribution. We talk a lot about E-Premise here at LibDib. The question every Maker should be asking themselves is “what is my digital strategy to engage and obtain customers and how are those orders fulfilled?” For all new brands, I have said it before and I will continue saying it. START HERE. It’s such a massive time, effort and cost savings to go to consumers first, then the trade next.
Before E-Premise existed, a brand had four levels of sales before ever getting to the final end consumer including:
- Find and pitch a distributor.
- IF the distributor takes your brand (10% or less shot, most distributors turn down 9 out of 10 supplier pitches), you need to pitch the sales force to sell it. This usually means an in-person meeting (one of multiple suppliers that day and some in market work with reps (if you can get it).
- If you can get a sales rep to take a liking to your brand and introduce it to their customers, then you need to sell it in there as well.
- Finally, many retailers require tastings or some kind of promotion to make their customers aware of your products. So plan to stand behind a table for a few hours and tell people why your wine or whiskey is the best ever…..even though you are surrounded by hundreds of other bottles that the shopper probably came in for. And if the customer tastes or buys something in this scenario, you do not necessarily own their contact info to stay in touch.
That’s a lot of time, effort and spend. For a one time sale.
Fast forward to the world of E-Premise. Add a “Buy it Now Button” to your website, invest in some snazzy digital ads, and add a link to your socials. Think about influencer partners who have targeted follwers. Sales via an E-premise platform are three-tier compliant (Maker to Distributor to Retailer). But the bonus is that every single one of those customers you now own the communications channel. With LibDib and an E-premise partner you skip the distribution (all Makers are welcome on our platform) and retailer search. It’s a no brainer. Once you have customers, you can take that data to find other sales opportunities. The entire ‘Go To Market’ strategy has been completely reverse engineered, and it’s kind of amazing because it’s easier, takes less time and A LOT less money.
The Opportunity: 2021 proved that E-Premise was a powerhouse. Read these Q and A’s with our E-Prem partners to sign up for one of them. Now. By the end of 2022 you’ll be happy that you did.
With that said, e-commerce will continue to grow, and grow and grow.
The Challenge: We believe that e-commerce sales, both at the B2C level and the B2B level (distributor to retailer/restaurant) are still only in their infancy, and therefore Makers are not currently utilizing the capabilities to their full potential…yet.
Let’s start with B2C: Globally, IWSR is saying that e-comm for alcohol is going to be 66% of all purchases by 2025. It was 2% in 2018. Prior to Covid, the US was behind compared to other countries. But now US e-commerce for alcohol is growing about 20% per year. So it’s been HUGE what has happened thus far. And more is coming.
The Opportunity: Learn more about all the e-commerce opportunities out there. E-Premise, retailers with their fourth party apps (Like City Hive or Bottlecapps…KNOW those names) and programs (are there marketing opportunities like ads or programming within?) available. Are you on Caskers? Wine.com? ReserveBar? You should be. And we can help. Sign up on LibDib or shoot us an email makers@libdib.com.
When it comes to B2B beverage sales, we’ve seen the largest wholesalers start their own e-commerce (after LibDib launched ours in 2017...first!) sites, including our partner RNDC with the incredible and amazing eRNDC. What we will start seeing in 2022 is more and more mid-sized wholesalers with their own sites, whether they build it themselves or white label via SevenFifty Storefronts. Wholesalers know they need e-commerce "books" as their customer base changes over the next decade. And the smart ones know they need to control the experience for as many of their customers as possible vs. just listing their products on a wholesaler consolidation site. Some wholesalers will probably have an omni-channel approach at first; however, the data and insights about what their customer is doing on the site is more valuable than the sale.
The Opportunity: Ask your wholesaler if there are marketing opportunities (advertising, search boosting, banner ads) on their e-commerce site. LibDib is launching these (and more) in Q1, so email makers@libdib.com and be the first to know!