Impact Retailer Panel Tackles Consolidation, Craft, Delivery And Other Hot TopicsMarch 14, 2016
With a number of powerful cross-currents—including the craft movement, distributor consolidation, home-delivery and the fickle tastes of younger consumers—increasingly influencing the drinks retail landscape in the U.S, the Impact Seminar convened a panel of the market’s leading players to weigh in on current conditions.
The group included Chris Adams, CEO of New York’s Sherry-Lehmann; Michael Binstein, owner of Chicago-based Binny’s Beverage Depot; Christian Navarro, a partner in Los Angeles-based Wally’s Wine & Spirits; and John Rydman, CEO of Houston-based Spec’s Wines, Spirits and Finer Foods.
Moderated by SND and Impact executive editor David Fleming, the conversation kicked off with comments on the consolidation wave in progress in the middle tier, led by the creation of Southern Glazer’s and Breakthru Beverage. Spec’s Rydman noted that while it’s too early to tell what the ultimate effects of the recent distributor mergers will be, he spoke out against any potential initiatives that would winnow the number of products available and result in an overemphasis on top brands. Sherry-Lehmann’s Adams added that he’s hoping the current phase of consolidation can be accomplished with minimal market disruption, and Navarro opined that we could see “a renaissance of microdistributors,” which would be geared toward handling handcrafted products. Binstein, meanwhile, said he was “not an alarmist” about consolidation at the middle tier. But he described the current state of beer distribution as oppressive for the 4,000 U.S. breweries now trying to get their wares to market. “It’s easier to get an annulment from the Vatican than to divorce an A-B or MillerCoors distributor,” he quipped.
The retail power-players generally agreed that the Millennial segment is the key driver of craft category growth across the market, and Adams and Navarro emphasized the importance of providing “bespoke events” for the younger set, which is particularly receptive to experiential marketing. Navarro said Wally’s has had success engaging Millennials at events like the Coachella music festival, which enable the brand to “get out into the community beyond our brick and mortar space.” Binny’s is striving to create a “melting pot” at its stores, said Binstein, with a focus on collecting customer info and then micro-marketing to address specific needs. The marketing approach used to be the equivalent of “carpet-bombing (through newspaper ads),” he explained. “Now it’s more like a series of surgical strikes.”
With the discussion shifting to the rise of e-commerce and drinks delivery, Rydman said that Spec’s partnership with delivery provider Instacart remains a small percentage of the business for now, but “it’s getting some legs.” One challenge in this era of instant gratification is getting consumers to accept that in many cases such deliveries may take a couple hours to arrive, Rydman cautioned. At Wally’s, Internet sales are growing quickly, Navarro noted, and the company is investing in the space to stay ahead of the curve. Binny’s too is participating in the growth in the delivery segment—recently forging its own agreement with Instacart—but Binstein said he still regards it as a missed opportunity if customers eschew an actual trip to one of his stores. Speaking more broadly on industry-wide dynamics, Binstein called for a renewed commitment to communication among the tiers, heralding “a new era of engagement,” which would enable all players to more effectively key in on specific opportunities in local markets, rather than applying a blanket approach.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.