Back to Business… as Unusual. Big Spirits Brands Adapting.

Some people are saying the post Covid-19 world will have at least 20% fewer businesses. Most agree that this pandemic will result in radical changes in how we conduct business, for sure. Survival and, ultimately, success for spirit brands will be determined by a new set of behaviors that include nimbleness, ingenuity and flexibility.  Many of the big spirits brands have already demonstrated significant and urgent responses to the new situation. What’s next? What do you think? Here are some observations, which we’d like to hear your thoughts on.

KEEPING YOUR SUPPLY CHAIN NIMBLE, TOO.
We hear from our biggest customers that for well-established brands, in particular those with larger sizes (1.75-L), multi-packs and ready-to-drink configurations are doing best now, considering that on-premise selling has all but dried up. Having secondary sources for materials and services ALREADY IN PLACE have enabled bigger brands to keep pace with unexpectedly strong demand in home/grocery/liquor store channels. By contrast, some larger brands that didn’t have these secondary sources in place have had to scramble in order to keep supplies steadily flowing to market. Certainly, smaller brands that don’t have back-up suppliers (either because they don’t have the volume or buying clout) have been challenged to keep up with unprecedented in-home demand.

How will supply chain participants (buyers and sellers) adapt to having secondary sources mitigate risk? Has something changed as a result of the pandemic? Or will we go back to a more typical model of single-source supply?  How might smaller brands take advantage of back-up suppliers, and what will that business model look like?

NEED TO STAND OUT NOW, MORE THAN EVER. We’ve all seen how videoconference meetings with business colleagues, friends and family have helped us maintain social connections and social distancing at the same time. We’re noticing a wonderful opportunity that’s emerging for our industry in two important ways: 

First – The resurgence of the 5pm Cocktail Hour, virtually, from home. We know at-home consumption has grown substantially, and here we see it happening before our eyes. Our products are integral in the SIP (shelter in place) experience. Consumers are not just consuming but they are showing and sharing what they drink with people they love. We know working remotely by ourselves from home can cause us to lose track of time. Before you know it, 8pm rolls around! People are now putting 5pm on their work calendars and scheduling 5pm cocktail celebrations. Part of that is to introduce WHAT they are drinking. What a great way to have consumers be “influencer” for your brand! Can they SAY your brand name, call out the brand name, e.g., “Gray Goose Cosmo”?

Second – The resurgence of the in-home bar.  We observe that many of these situations are not just showing a person holding a glass; we’re seeing a new detail in the video image: THE NEW HOME BAR. Sometimes it’s on a shelf while other times it’s on a tray right next to the host. Rarely is there just one bottle showing. How can brands get the BEST REAL ESTATE? The answer is a highly visible, awesome bottle and label. Right?

Both observations are coming from market-behaviors that are happening right now. How will your brand compete for real estate on the “new home bar”? Who is going to “sponsor” the 5pm virtual cocktail hour? Is your brand/package standing out as heroically as possible today?

JUMP-STARTING ON-PREMISE. On-premise sales died overnight; the big brands with strong, nimble management and well-oiled teams were able to pivot quickly to address SIP orders and keep retail shelves stocked. After three months, we are just now seeing a slow re-opening of on-premise service with new guidelines for thwarting cross contamination with optional mask wearing and social distancing. 

Is there something else that on-premise proprietors could use to jump-start their hospitality business and still maintain some modicum of community safety? Will we revert to bendable plastic straws so patrons can keep masks on while enjoying alcoholic beverages? Will masks just go away, soon, or evolve in interesting ways?

That’s what we’re thinking about; let’s start a conversation.

@5pmclink; @byquestbrands; #leadingspiritsbrands; #spiritsbrands; #postCovid19; #winebrands; #shelterinplacecocktails