Posted: Aug 14, 2020
In part one of this two-part segment "Greatness Begins With a Humble Journey we discussed the core skills learned by our top industry professionals as he learned how to navigate the wine industry.
In this final segment Mark Cervellero provides some insight and thoughtful solutions to support our industry as we navigate through the new reality we all face. If you missed yesterday's introduction to Mark's story, you will find it here.
LT: Which areas in the adult beverage market place are presenting the greatest opportunities?
MC: Hard Seltzers are the Red Bull analogues of today. IRI Nielsen shows the great opportunity. In the wine category, Prosecco is still demonstrating powerful growth in the 52 weeks trend analysis, and in an unusual turn of events, Cabernet Sauvignon is now outperforming Chardonnay.
The Canned wine category is thriving as well. It offers a maximum margin.
LT: What does the future of the three tier system look like in your opinion?
MC: The consolidation of the 10 largest distributors which control 73% of the market place will continue, with the 3 tier system now controlling 64% of the total market share.
Last year the TTB approved 125,000 new. The sheer number of new SKU's is causing an enormous amount of SKU rationalization. Particularly in the current environment we are in. In 2018 DTC 6 MILLION in case sales was responsible for 3% of the total wine volume sold. Now DTC is responsible for 16% market share.
LT: What are the greatest sales obstacles for the adult beverage industry?
MC: One of the greatest obstacles is that in order to achieve some sort of normalcy in our new economy, discounting will drive the industry's largest brands. This will create pressure on the whole marketplace. The fourth quarter presents a potential fire sale. We will experience quite the "sales hangover" going into 2021 and beyond.
LT: What solutions would you recommend for the on-premise channel to improve their businesses?
MC: Digital marketing and sales is one of the key solutions to drive business to their doors. The on-premise channel needs to move beyond their own web pages, beyond Uber Eats etc. A coordinating Facebook, Instagram or Twitter leads Ad for one week has a minor cost in comparison to the cost of a poor or no digital marketing and sales. Everyone is now officially in the retail space.Due to the change in the operational and strategic landscape for brand suppliers during COVID, investments are going directly to innovative ways to drive sales through the individual accounts vs. spending on the winemaker, marketing, travel-related costs. It is time for manufacturers to invest in carryout or on-site dining (where safe, legal, and possible) in order to keep the cash flow moving through the accounts.
LT: Will the future of sales and marketing be virtual/in-person, or a hybrid of all the above?
MC: In the short term to midterm, virtual is king. One year from now. if and when treatments and vaccines are approved and deployed effectively, perhaps more in-person meetings will begin to occur. Interestingly, what I can see is that virtual meetings can double the amount of meetings/sales calls we are able to accomplish due to the lack of time spent traveling from market to market and from client to client.
LT: Is the luxury market growing due to greater demand or steeper discounting?
MC: Definitely discounting is impacting luxury growth.
LT: Personally, what words of encouragement can you provide our industry professionals in order to bridge the gap until sufficient treatments and vaccines are available to come into the new normal.
Mark, thank you for allowing us to share your story and for the timely information. Your willingness to share solutions and knowledge for the industry will help the gap to the new normal. Time and time and again you have proven that there is no obstacle too great. It is an honor to call you a colleague and friend.
By Luis Torres
August 13, 2020
Go-Wine's mission is to organize food and beverage information and make it universally accessible and beneficial. These are the benefits of sharing your article in Go-Wine.com
Professional consulting to the Food and Beverage industry.www.winebusinessacademy.com
The Wine Thief Bistro & Specialty Wines is a locally owned small business in downtown Frankfort, IL offering world class wines in a relaxed, casual gathering spot for friends and family. Offering world class virtual tastings and touchless carryout.https://www.twtwineclub.com/aboutus
Go-Wine 25 Great Wineries in US selection prioritizes quality, value and availability.www.go-wine.com/great-wineries-in-america
Tasting wine is a nice experience, but visiting the places in which wine is made is a magic moment. Available in New York City for touchless pickup.