In the cutthroat beverage market, shelf space is at a premium and companies are willing to do what it takes to stay within eyesight and arms reach of customers. Many up-and-coming brands and their distributors know this all too well and are constantly trying to stay ahead of the market, in the good graces of retailers, and fresh in customer’s minds.
Chuck Noll of Arizona’s Crescent Crown Distributing knows this dance well.
“Paramount to us is the quality of the product,” he says. “After that, we look at marketability and several key indicators of success.” Being in the craft beer business, Noll says he looks at the reputation of the brewery, the support available from its staff and its expectations. The same is true for beverages of all styles, say other distributors.
Then, when it comes to the retailers the key is to not over promise. Getting a case of beer on the shelf is only a small part, he says. If the consumer does not buy the beer, then there is no re-order and eventually it will be gone, never to return.
“It is mostly up to [the retailers] to make sure it comes off the shelf and into the consumer’s house,” he notes. “This is why we make so certain to send in the right stuff and aggressively monitor performance.”
Bob Mack of Indianapolis-based World Class Beverages echoes those comments, but notes that education of retailers and shaking off past business practices are keys to success. He says wholesalers should avoid the “one size fits all” mentality when it comes to creating shelf sets.
“Part of the end product for the retailer in this case is that many sets look alike from store to store and that does little to provide much overall variety or differentiation for retailers,” explains Mack.
Mack and others note that it is important to treat retailers individually and get products that suit them and not just another repeat of top-selling SKUs.
“Pushing a product that does not fit the retailer’s needs, but fulfills an incentive or supplier commitment will only lead to a loss of confidence in that salesperson,” offers Frank Politano, vice president of sales and marketing at Kohler Distributing (Hawthorne, N.J.). “Understanding what a retailer’s needs are and understanding his consumer base is the foundation of the sell. Then introducing the brands and packages that fit leads to a good sales partnership.”
This is particularly helpful for specialty beverages. In areas where a population might be geared toward an outdoor lifestyle or organic ingredients, having the right product on the right shelves mean success or failure for new brands.
When she launched SIPP Eco Beverage last year, Beth Parentice did not yet have a distributor. Still, she set up a booth at the Natural Products Expo in Boston to showcase her organic cocktail mixers. Parentice attracted a lot of attention from retailers and dutifully copied down the information of each vendor who came by the booth and expressed interest in carrying the SIPP line.
After the conference, Parentice and her team compiled a list and went to distributors with proof that their product could do well in stores. Soon enough they had contracts and were able to get SIPP on shelves within about four months. Now she is onto the next challenge: finding investors to help the brand grow even larger.
One beverage executive who knows the struggles and ultimate rewards of fighting for shelf space is Seth Goldman, the co-founder and TeaEO of Honest Tea. When the brand was launched in 1998 he said the landscape was different but still tough to break into. At first Honest Tea focused on the health food market, and reached out to different distributors to get onto the shelves of stores with potential.
“Cheeses, corned beef, charcoal distributors, we had to find other ways to get onto the shelf,” he recalls. “Rarely did we turn a distributor down.”
Eventually he knew that if Honest Tea wanted to succeed on a larger scale it would need beverage distributors. The company started small, focusing on the areas in Maryland where they were based and saturated the market. From there it grew into the New York City market and out to Colorado. Its distribution picked up, and larger companies took notice. In 2008, The Coca-Cola Company purchased a minority stake in the business and earlier this year acquired the rest of the business. Honest Tea is now found in more than 75,000 locations throughout the United States.
Ultimately, says Noll, there is no magic formula.
“Hard work, integrity and outstanding service, featuring the best products, is always the optimal combination,” he says. “Anytime a competitor ventures down a different avenue it only leads to short-term success.”