CM Profit Group: Suppliers Need to Work on the Fundamentals


Alcoholic beverage suppliers don’t have to reinvent the wheel to provide top tier national account and category development services. On the contrary, emphasizing the fundamentals should be enough to land a supplier in the good graces of their on-premise partners. That’s the takeaway from the latest CM Profit Group survey, in which nearly 70 operators of 150 bars and restaurants responded.

Tom Fox, a partner with the sales consulting firm, cited three important principles survey participants stressed when evaluating supplier partners: communication, execution, and consumer understanding.

“It’s nothing that’s rocket science,” said Fox. “I think, number one, they are going to look at suppliers’ suggestions and they’re going to know immediately if those suggestions align with what they’re trying to get accomplished. If you don’t really know what the account is looking for, it’s going to show pretty transparently in a negative way.”

Despite the conventions being well-known, Fox said less than half the supplier companies ranked in the process — which included nine prominent craft and multinational brewers alongside a number of distilleries and wineries — received positive marks. Of the 23 suppliers assessed, only 7 exceeded their partners’ expectations when it came to recognizing and driving behind opportunities.

Offering advice on how to best avoid making rudimentary mistakes, Fox suggested suppliers devote the resources to building infrastructure around a strong CRM system and underlining the communication process between partners.

“We really recommend that those companies talk about the account’s goals and strategies on every call,” added Fox. “That’s what companies don’t do.”

But the results weren’t all bad. Fox said on-premise retailers reported “significant improvement” in business reviews across the board, as suppliers worked to build and create solutions to solve chain-specific problems. E&J Gallo Winery, to name one, was ranked as the top supplier across all three categories, was cited as “flawlessly” executing these types of programs.

Elsewhere, suppliers are said to have sharpened their objectivity tools and are putting more thought into their own assortment recommendations. This, Fox said, is becoming increasingly important, particularly on the beer side, where segmentation is increasing, often faster than retailers can keep up with (think white and session IPAs within the broader IPA segment, for instance).

To alleviate the burden, Fox said suppliers should help retailers with purchasing decisions, while keeping objectivity at the front of their mind.

“Sam Adams might say, ‘Listen, we think you should carry our Rebel, but we do not carry a White IPA, so you should carry the, ‘name-the-IPA’ competitor,’” said Fox. “We’re seeing companies recognize the power of being objective and trying to help the customer, because it’s not necessarily done very often.”

While it may seem counter-intuitive to promote competition as tap handles dwindle across the country, Fox said doing so, when positioned well, builds a “trust factor” and is part of playing the long game.

Of the beer companies appraised in the survey, Boston Beer was ranked no. 1, ahead of MillerCoors (2) and Anheuser-Busch InBev (3). Fox said the makers of Samuel Adams has taken a leadership position in servicing on-premise chains and had the top score across all three categories in providing industry and consumer insights.

Other beer companies considered included Craft Brew Alliance — which produces and markets the Widmer Brothers, Kona, Red Hook and Omission lines of craft beer — Sierra Nevada, Heineken, Corona, Guinness, and Constellation Beer.

The overall winners were E&J Gallo Wine (1), Constellation Wine (2) and Boston Beer (3).

The top wine suppliers were E&J Gallo(1), Constellation Wine (2) and a tie between Trinchero & Chateau Ste. Michelle (3).

The top spirit suppliers were Pernod-Ricard (1), Beam Suntory (2), and Bacardi (3).

CM Profit also provided a list of core competencies survey participants reported as “extremely valuable,” including:

  • Overall value/support
  • Knowledge of accounts strategies, tactics and goals
  • Business reviews
  • Industry and consumer insights
  • Assortment and menu recommendations
  • Promotion, traffic and check building ideas
  • Training and education
  • Pricing analysis and recommendations
  • Depth of supplier partnering
  • Execution and follow up
  • Post program evaluation