The Beverage Business Gets A Boost From Embracing New Technology Opportunities
If the past eight months spent slogging through the COVID-19 pandemic has taught the beverage business anything, it is that technology is the partner it needs to succeed.
March saw on-premise consumption – from coffee to cocktails – grind to a screeching halt. And even with a slow reopening nationwide beverage sales numbers remain depressed. Early on a craft distiller study revealed that the Distilled Spirits Council of the United States estimated 41% of craft distillery sales would disappear; creating a loss of $700 million and 31% of distillery employees laid off.
Very quickly every aspect of the beverage business recognized that for business to continue they must rethink customer engagement and find new tools to connect customers they’d normally see face to face. Enter technology to save the day.
Classic cocktail delivery service Sourced Craft Cocktails quickly embraced technology as back end support in revamping its business model from B2B to homebound consumers. Doing so resulted in a 792% increase in business.
Sourced founder Tim Angelillo reflects how his new technology partnerships made this possible while maintaining quality standards and staffing levels, “We are still delivering a proper craft cocktail experience, but now we are delivering it to the non-premise… your front door.
Without the tech stack this pivot would not be scalable. No amount of hard work alone could allow us to grow at almost 800%.”
He continues, “We built a completely new e-commerce platform on Shopify and new ERP to manage inventory on Katana.
The difference maker that allowed us to grow seven times faster was Onfleet. Without them we couldn’t route that many deliveries and enable customers to know when drinks would arrive.
They make a really good experience for the consumer and our back office where the technology allows us to see everything in a very customized dashboard. Onfleet enables us to pass through our middleware all the consumer order information and it allows the mixologist network to reach an app via 1 click to put the software onto their phone while optimizing all the orders in the market.
It also lets us know what bartenders have completed so we know how to pay them. Without Onfleet there’s no way we’d be able to crunch the math, much less export it and pay them all the next day at noon.
Its API integrates great with Shopify, and because of that, companies like ours who are a consumer experience business that must be tech enabled will thrive.
Thriving is a state of being that East Harlem and Upper Manhattan community-based coffee shop Dear Mama wasn’t so sure about when NY shut down.
Based in neighborhoods where they’ve developed a reputation as being welcoming gathering spots, Dear Mama founder/CEO Zach Sharaga immediately noticed that he was left with little to no in-store foot traffic his business had relied upon and his plans underway to explore delivery were accelerated.
“When the pandemic hit, we wanted to offer some consistency, and comfort for our neighbors’ bellies, by making sure we got to them,” Sharaga explained.
“Our original intent on undertaking delivery was to build the Dear Mama profile wider than before and balance out the fees that result in a net zero profit by utilizing the platforms for their marketing power.
So, we signed up for many of these delivery services to get as many eyes on us as possible. In addition to connecting with our local customer base in a new way that felt safe, adopting these apps allowed us to open a line of communication with people we didn’t already reach.
It is bringing our brand to people who haven’t heard of us; 51% of people coming to us via these platforms are first time Dear Mama customers.”
Sharaga also harnessed technology with a proprietary app and offers coupons when pick-up and delivery items go out, hoping people will navigate to the Dear Mama app on their next order.
Utilizing all this technology has enabled him to expand his delivery zone and positively impacts his bottom line as he shares, “I see these apps bringing in more money on a margin per item basis than we saw when it was just in-store sales. “
In Jackson Heights, NY, two and a half year old restaurant The Queensboro quickly reopened by utilizing QR Codes via their POS system Toast to reimagine the business of serving their regulars’ favorite beverages.
Viewing the pandemic as a good chance to evaluate and refine operations, owner Michael Fuquay says, “Our POS company came up with a remote ordering widget that creates a unique QR code for every table, enabling drinks to be ordered straight from the guests’ phone.
Transitioning to this cut down on the amount of face to face time our staff spends at the table.”
Before 2020, liquor brands that landed on someone’s cocktail table at home did so via retail channels.
The rise of third-party apps enabling direct to consumer bottle sales has changed all that as consumers are eagerly having spirits delivered to their door in order to replicate their favorite bar’s cocktail experience.
Peter Nevenglosky, founder of Drifter Spirits, notes that the evolution of direct to consumer sales technology is crucial to the survival of liquor brands big and small and comments, “Brands are now working with third party providers who partner with individual local retailers that can provide product to consumers in any state in the country within a day or so.
This technology has evolved so that it is easy to get up and running and have the full spectrum of data that allows us to work through the supply chain.
Tony Matchus, COO of Caravedo Pisco, is pleased to see this sales channel newly open and robustly supported by enhanced backend technology. As the leading producer of a spirits category found primarily in the on-premise before the pandemic, Matchus relishes that technology has provided both a lifeline and fresh opportunities for growth.
He concludes, “It equalizes you as a liquor brand and puts you on equal footing with other consumer goods that you can buy on the internet.”
SIPS TO SAMPLE
We are warming up with whiskey again this month.
And, since great American whiskey can come from anywhere, but we Americans aren’t likely to be traveling much of anywhere this month, despite the Thanksgiving holiday, it seemed fitting to take a trip to Texas and see what’s happening there.
Introducing Milam and Greene Triple Cask Straight Bourbon Whiskey. From the team of Texas entrepreneur Marsha Milam, Michigan-born renowned whiskey expert, author and Master Blender Heather Greene, Kentucky veteran Master Distiller Marlene Holmes, and Texan bred Chief Brewer Jordan Osborne, who have 55 years of whiskey expertise between them, comes this bourbon made from 70% Texas corn, 22% Pacific Northwest malted rye from Oregon & Washington, 8% Wyoming barley and a proprietary yeast recipe from Kentucky and Texas.
Each bottle is a batch of three hand selected straight bourbon whiskies: their 2-year-old premium Texas bourbon for a pop of spice married with 3 to 4-year-old Tennessee whiskey for vanillas and fruits and 10 to 11-year old Tennessee whiskey for structure and tannins. It is then proofed to taste and bottled on site.
Know that old saying, necessity is the mother of invention?
Sure sounds trite when you say it out loud, but the impact of the pandemic that bars, restaurants and liquor brands are currently struggling with couldn’t make it ring truer. In 2020 this old adage is getting a new lease on life!
And it’s not just that everything old is new again; in an era when persevere or perish mean embracing technology and new ways of doing business there are new solutions available.
These technologies provide innovative ways for brands and bars can tap to get drinks into consumers’ hands in ways they couldn’t before. Coupled with eased local liquor laws technology is enhancing and opening new sales channels, to make profitability possible once again.
Adoption of behind the scenes tech – like Barcart and OnFleet enables brands and bar owners to right their ships during this treacherous sales environment that doesn’t seem like it’s going back to normal anytime soon.
In July, a survey by PYMNTS found that nearly 36% of US customers were shopping online.
That’s more than they saw shopping online in April at the earliest peak of the pandemic when most stores were closed. And nothing since then has indicated consumers are abandoning their online habits anytime soon.
That’s great news for brands working with Adi Pal, Founder/CEO of Barcart, the e-commerce and marketing platform designed to allow alcohol brands to sell directly from their own website.
While keeping the existing regulatory framework in place by processing all orders through licensed retailers who procure the supplier’s products via the normal three tier channel, Barcart’s technology makes the customer experience simple. And enhances the relationship between brands and consumers.
Pal explains, “By enabling e-commerce on a supplier’s website, Barcart creates a whole new sales channel – in addition to on-premise and off-premise channels that exist – which translates into increased revenue and expanded reach, with the supplier firmly in control.
Since all sales are fulfilled via the three-tier channel, every participant in the supply chain benefits from this new sales channel coming to life.”
He continues, “The platform provides commerce and marketing tools – a plugin which allows any website to enable e-commerce in a few simple steps and marketing automation tools which help reach new and existing customers and increase purchases.
By improving the shopping experience for the customer, Barcart increases the purchase frequency and that translates into increased revenue for all participants.
And finally, by leveraging our marketing automation tools, suppliers are able to reach more customers and increase the lifetime value of each customer they acquire through this channel.”
While Barcart is focused on acquiring and delighting consumers shopping for their favorite bottles, OnFleet is all about keeping consumers informed. Even though they may never realize they’re utilizing OnFleet technology.
Ignorance is bliss, as long as the drinks show up on time. OnFleet, with its intuitive routing and dispatch platform that enables real-time communications and proactive delivery management, makes that possible.
The company’s founder, Khaled Naim shares how they’ve helped beverage businesses satisfy during the recent surge in delivery demand, “As on-demand, instant delivery quickly proliferates, customers have come to expect lightning-fast deliveries with real-time status updates and will take their business elsewhere if last mile delivery services don’t meet their high expectations.
If businesses want to not only survive but use this time to increase their revenue and market reach, they need to find a way to step up their delivery capabilities. Onfleet is the solution. guaranteeing fast, seamlessly executed deliveries, taking the hassle out of the delivery process and ensuring elated and loyal delivery recipients.”
That level of loyalty bars and brands want from their consumers is similarly reflected in Onfleet’s customer relationships after clients see increased operational efficiencies and consistent cost savings of 50% and Naim notes, “All new customers, ranging from those brand-new to those running a vast operation, such as Onfleet customer Drizly (North America’s biggest online alcohol distributor), experience immediate efficiencies.
These translate into measurable improvements in fuel savings, route optimization, and streamlined analytics.”
Pal finds similar successes for his client partners like Caravedo Pisco and Drifter Spirits.
He remarks, “We were able to help many brands launch during the pandemic and they found success despite the overwhelming odds against it. On the other end, we have numerous retail partners for whom the increased order flow from the online sales channel has supplanted lost revenue.
We have also been able to partner up with brands to do exclusive releases where a part of the profits has benefited industry associations and charities.”
In an industry that was decimated by the pandemic, bar owners, like Michael Neff of The Cottonmouth Club also benefitted from technology that not only helped them get actual drinks to customers, but also the whole bar experience.
Neff took his bar to the airwaves, so to speak, turning his nightly shift behind the stick into a virtual nightly experience of integrated programming on YouTube, Instagram and Facebook.
This meant learning new skills like audio engineering and podcast editing and marketing; skills he turned to programs like Auphonic, Lumafusion, and Buzzsprout to help with. Neff admits that technology has been a saving grace during the pandemic, “ Ask me a year ago about my virtual bar and I would have thought you were nuts. I would have said, don’t stay home and watch me, come and watch me here at the bar. But that’s all changed.
The work comes because everything produced has to be marketed and anything from making and optimizing websites – everything has some sort of service you pay for or wish you could pay for. And you have to build it. It takes hours of learning how to do what you’re paying for.
The blessing of the early part of the pandemic was that we didn’t have options to open, so if we wanted to stay afloat we had to do something and there’s no way on earth I would have had the time, inclination and inner fortitude to do all I had to do to learn this if it hadn’t been for the pandemic.”
He concludes, “The existence of technology has allowed me to maintain business presence and allowed me a public sphere when we didn’t have an actual public sphere. It has substantially altered our presence in the city of Houston for sure.
Technology allowed me to bring other people on to advocate at the same time, to rail at the governor, to let other places around the country know they were not alone and to say I’m doing it at this bar in Houston.
A bar that, thanks to technology, will hopefully still be sliding drinks across the bar to guests seated there once the pandemic is behind us.
SIPS TO SAMPLE
While the trade finds new life in technology, the end of 2020 warrants a whole new way to look at what’s in our glass. Hence, Proteau.
Made in New York by renowned bartender and hospitality expert John deBary, Proteau is a botanical non-alcoholic aperitif.
Ludlow Red is perfect for a cold winter night by balancing notes of blackberry, chrysanthemum, black pepper and dandelion in just 30 calories per serving.
It pairs beautifully with a savory meal or all on its own. Drink proteau Website.
