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    April 13, 2022

    5 Beverage Industry Key Performance Indicators for Growth

    Identifying the most critical KPIs to measure performance in your industry – and then leveraging the best tools to monitor, understand and act on those KPIs – isn’t cut-and-dry. The answers to these questions can vary greatly from business to business, even within industries.  

    First, you must determine which KPIs are most informative and useful in terms of your business goals and industry expectations. Then, determine if you’d benefit from industry-specific tools versus only using as-is, out-of-the-box enterprise resource planning (ERP) software and a general business intelligence (BI) tool.  

    For beverage business today, a great deal of manual management, tracking and reporting still happens outside of the system if software doesn’t simplify and automate processes, offer their specific container inventory levels or allow them to track varietals. Beverage is an industry with such a high level of variety and complexity that it warrants an industry-specific treatment.  

    The good news is: Industry-specific offerings are now more accessible and affordable to beverage businesses than ever before thanks to Cloud-based subscription models for small- and mid-sized companies. Not only that, but today’s tools offer greater functionality and more capabilities that resonate with the industries they’re built for.   

    To position yourself for success, you need to be aware of several critical metrics to track in the beverage industry, the benefits of tracking them, and how a beverage industry-specific offering amplifies the impact of your efforts.   

    What Metrics are Important in the Beverage Industry? 

    Some metrics are important to all businesses, such as gross profit margin, revenue trends and operating expenses. Others are either unique to or of greater importance in the beverage industry. Some are even specific to categories in the industry, such as varietals for wineries and kegs for breweries.    

    To add to complexity, there are hundreds of potential metrics to track and not all of them provide value in terms of strategic planning, optimization and growth. If you can only choose a handful to keep a finger on and pull into your daily or weekly view, which should they be?  

    1. Production KPIs 

    KPIs related to production processes are top of the list for the beverage industry. Critical production KPIs include:  

    Throughput: The amount of product coming off your line or lines.   

    Yield: The amount or percentage of product made that is to quality and doesn’t require rework.   

    Reject Ratio: The amount of product made incorrectly that becomes waste versus the throughput.   

    Understanding how much you produce, what percentage is useable and what percentage is a loss will help you maintain control of an efficient process, improve an inefficient one, catch costly productivity interruptions and strategize to increase production overall.  

    2. Unplanned Downtime  

    Downtime ties directly to your ability to be productive. If one machine in your line is down, the whole line is down and your productivity plummets. What you learn from your downtime can help you strategize for preventative maintenance on your production assets. Tracking your machinery’s performance helps you take care of problems before they arise.   

    It also means you can schedule the needed downtime strategically so your business can still meet the forecasted needs of your customers with less equipment. Doing so will reduce your risk of unplanned downtime if a component breaks in the midst of producing the season’s most popular brew.  

    3. Distribution Cost as a Percent of Revenue 

    Beverage industry leaders know that the cost of distribution is a significant part of the overall budget, and this cost continues to climb. Embrace tighter controls and a real-time view of data related to distribution costs.   

    You want to monitor the distribution cost as a percent of revenue, identify a reasonable threshold and look for opportunities to improve. Look at options such as packaging materials, which carrier you are using and how to adjust delivery schedules to cut down on costs.  

    4. Fill Rate 

    The fill rate is the number of orders out of your total orders that reach their ultimate destination in full and on time. This is a critical measurement for understanding whether you’re fulfilling the expectations of your customers and where you might need to make improvements. You want this metric to be as close to perfect as possible, though not at the sacrifice of your own profitability.   

    5. Tasting Room and Restaurant Metrics   

    Tasting rooms and restaurants have become greater sources of revenue for beverage industry businesses. Brewers with tasting rooms saw 12% faster growth in their revenue from 2015 to 2016, and has since grown into a significant source of income for beverage businesses.    

    Tracking KPIs related to this point-of-use consumption is critical for many, including:  

    • Seasonality  
    • Staffing costs   
    • Food costs versus sales and menu prices  
    • Trends over time  

    These metrics help beverage industry professionals discover inefficiencies, opportunities and risks in the most pivotal processes of their business. They represent critical areas of operations: production, equipment uptime, distribution, fulfillment and tasting room and restaurant metrics.   

    Businesses can act on their discoveries, finding ways to reduce inefficiencies, pursue growth and optimize profitability. They can use data to understand where and why waste occurs to reduce it, better forecast inventory to further reduce waste, and achieve more consistency in production.   

    How do Industry-Specific Offerings Amplify Success with KPIs?

    Industry-specific tools mean you can monitor the metrics that are most important – and often unique – to your business. They’ll help you reduce the clutter of hundreds of potential metrics to the most critical KPIs, and they’ll deliver data to you and other users in convenient, easy-to-use, repeatable formats. You can then use those KPIs to monitor and optimize your operations and profitability.   

    It’s much the same as any ERP and BI combination would provide – but having an industry-specific package reduces customization and manual data entry for those metrics, processes and regulatory activities that are unique to the beverage industry. You’ll be able to spend more time on your products, customers and growth goals, and less time on administrative and regulatory work.  

    For example, Enavation Cloud: DRINK-IT by NORRIQ is an industry-specific, turnkey offering for the beverage industry. It is a powerhouse, Cloud-based combination of three solutions in one offering:  

    1. Microsoft Dynamics 365 Business Central, with its advanced financial capabilities  
    2. Microsoft Power BI, with its analytics and KPI-tracking capabilities   
    3. DRINK-IT by NORRIQ, which fuels the combination with its industry-specific functionality   

    With this offering, you can manage everything from production to distribution and logistics, finances and taxation, rules and regulations, and more – all in one platform. You gain visibility over your supply chain and realize consistent tracking of empty goods.    

    Another example is Enavation Cloud: VinPoint Wine Management, a turnkey offering for wineries. It also combines the capabilities of Business Central and Power BI, fueled by VinPoint Wine Management and its industry-specific functionality. VinPoint tracks and delivers data points that are unique to the wine industry, from bottling to shipment.   

    With this offering, you can:  

    • Track inventory movement against excise tax class and code  
    • Report financials by brand varietal and vintage  
    • Analyze inventory levels by varietals, brands, vintages, etc.  
    • Manage product allocation of noteworthy vintages and identify where they’re more profitable  

    No matter what type of beverage your business is producing, you cannot afford to run it blind without monitoring KPIs. With the right technology upgrade and Cloud-based offering, you can integrate these analytics into your daily routine without disrupting the time spent on perfecting your craft. Contact an Enavate beverage industry expert to discuss which offering is right for your business.   

    Diane Fox

    Diane Fox is the Beverage Industry Program Leader within the Product Pod at Enavate. Her focus is to bring industry experience and technical leadership to our beverage offerings. Diane has actively worked in the Dynamics NAV/BC channel for more than 20 years and in the wine industry for 14 years. Outside of work, you’ll find her and her husband traveling in their fifth wheel and enjoying all of the amazing and varied regions the U.S. has to offer.

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