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.