While many industries suffered in 2020, alcohol and spirits had a banner year.
Alcohol sales outside of bars and restaurants grew 24 percent, according to Nielsen. Spirits grew 27 percent over the previous year.
Outside of dramatic demand shifts, alcoholic beverage producers – from cideries and wineries to craft breweries and distilleries – have seen:
- Changes in consumption patterns, such as growing demand for premium products and taking drinks to go. For example, it’s not uncommon to see canned wine and cocktails, hard seltzers and other adult beverages on store shelves and available for carryout from your favorite drinking spot.
- Requests for different types of products, such as 0 percent beer, low ABV (alcohol by volume) beer, CBD-infused beverages, hard seltzer and more.
- Increasing costs for raw materials, utilities and logistics. Rather than pass on costs to consumers, many beverage companies are looking for ways to increase efficiencies internally.
- The addition of e-commerce as a valid sales channel for all sizes of producers. The global e-commerce market for spirits and wine nearly doubled in 2020, according to Forbes.
- Expanding reach to consumers through different go-to-market strategies, including takeout, delivery, retail, shipping, e-commerce and partnerships with other businesses.
As the market grows more competitive and more complex, producers and distributors in the beverage industry need to streamline, simplify and automate their business processes, from receiving raw materials to delivering products to consumers.
This holds true as much for small and midsize players as it does for their regional and national competitors. In fact, it’s even more critical for SMBs to embrace technology. And it’s never too late for businesses to use technology that allows them to scale.
Starting at the ground floor, a craft brewer or distillery can build their processes around best practices and run more efficiently, paving a clearer path to success. Enavate recently announced a partnership with Drink-IT for the U.S. and Canadian markets. Drink-IT is a complete beverage industry enterprise resource planning (ERP) software solution built on Microsoft Dynamics 365 Business Central.
An industry-specific ERP solution such as Drink-IT for the beverage industry can help address some of the common challenges small-to-midsize beverage businesses face.
Disparate Business Systems
A lot of breweries, wineries and distilleries manage their businesses manually using Excel and/or QuickBooks. Frequently, they operate one system for finance and one or more systems for operations, which can result in duplicated data entry and differences between them.
With a fully integrated business management or ERP system, you can manage your entire value chain in one place and share data between applications without jumping from one to the other.
Supply Chain Visibility and Agility
If you can’t see end-to-end in your supply chain – from where you get your raw materials to the retailer or taproom where a beer enthusiast grabs a six-pack – you’ll probably deal with errors, stockouts and disruptions. You also may struggle to meet regulatory and legal requirements. All of that can lead to a poor customer experience and depressed sales.
After the devastating blow of closures in 2020 related to the pandemic, small and midsized breweries, distilleries and wineries can’t afford either situation as established regional and national brands leverage their cash flow for strength in 2021.
A solution with full supply chain visibility for SMBs provides:
- Greater insight into production processes and costs. A solution should capture and allocate these costs so that you have a true picture of product profitability. Real-time data visibility can also drive a demand forecast to build a master production schedule.
- Greater insight into what product is selling and where. You can look at developing a process to scale manufacturing to meet consumer demand and marketing efforts to continue building it.
- Assurance you don’t run out of raw materials (can you brew that next batch?) or packaging to meet demand. Industry-specific dashboards make it easy to check on producing status in real-time in a single view.
- Ability to track a batch through the production process, sales order and delivery to the end consumer.
Different Rules in Different Places
Across the U.S., producers and distributors face different rules and regulations around production, shipping and taxes. Sometimes those rules change monthly.
A smaller business doesn’t have the manpower to keep up with these ever-changing rules on their own. Leaning on a solution that tracks and keeps up with those rules means they can stress less about compliance and focus more on what they do best: make great beverages.
The right partner can place your beverage business in a position to embrace change and use it as an opportunity for continued growth. If you’d like to learn more about how the Drink-IT solution can pave a path to success, reach out to Enavate’s experts today.
