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2020 Was the Best Year for the Adult Beverage Industry

2020 Was the Best Year for the Adult Beverage Industry

2020 Was the Best Year for the Adult Beverage Industry I’m not crazy. I had no illusions. I don’t expect much from my own actions. I’m a 35-year veteran of the alcohol industry. I ran beverage companies on all three levels. I sold two liquor companies to private equity and invested millions of my own money in adult brands. So yes, 2020 (although it’s a shitty year for all of us personally and on many fronts) has been a great year for the beverage industry.

Tens of thousands of you have read my column, and I assume you like the content. Don’t think for a second that I am covering the health and safety risks of the last 9 months or mocking the thousands of suppliers, operating accounts and dealers/importers that have evolved during that time.

The year 2020 was a great start for our industry. 2020 is the year in which another sales channel, application or web portal took root. 2020 is the year in which DTC doubled or tripled its growth rate. 2020 was the year of the launch or reintroduction of canned wine, RTD cocktails, organic, eco, etc. The year 2020 was the year in which wine could be sold on the basis of framework conditions. The year 2020 was the year in which GM left the golf course and the offices of the large distribution companies and actually went to the accounting department to sell the goods because the local department was closed. The year 2020 was the year in which GM would be what it was. 2020 was the year in which very ambitious single brands disappeared from the landscape because there was no market for them. 2020 was the year in which brands learned to hold virtual tastings, to invest in marketing and design and/or to take a break to revive the business model.

As a company selling national brands for an independent supplier to Bevstrat, and as someone who personally invests in brands, 2020 was the year that made sense for our industry. As painful and disturbing as it was, it was a big leap in the hierarchy of the adult beverage industry.

Just to cover a few important points:

  • The advent of the era of portals, web sales and a third new channel
    • For years, the permanent joke was the only person making money on wine.com, the man who sold the wine.com URL for $10 million. It’s been like this for years. Portals such as Thirst, Reserve Bar, Minibar and others are in the spotlight. All these applications were good ideas in the beginning, but customer acceptance was slow at best. At Covid the consumer did not want to go to a wine or liquor store. Business traffic dropped by 70% between April and June. These applications were well positioned and sufficiently authorized to make the purchase easy and worry-free. In addition, the new brands needed a way to sell in the stores because the shelf space was linear and definitive – time was long and there was a need for it.
  • Thinning out the herd
    • Nobody wants other people to have business problems. We’ve all had them, and they’re terrible, but 2020 was the year in which dreamers had to become schemers to make their personal mark. Consumers are attracted by the best brands. Many of these brands (Jack Daniels, I believe) are nominal brands that have sold themselves. The problem with this category of brands is that they don’t win at all, they take stock. It is good for traders and consumers / bad for those who have sold them. We had no choice but to keep the lights on. The independent marks are the marks that have been violated. Historically, the shelves of liquor stores or wine shops throughout the country have been dotted with racks and then (on the shelves) surrounded by independent brands. The reason it works is that a consumer can walk into a shop, look through, talk to a salesperson and try out a new brand. Or they go to a bar and the mixologist recommends a new cocktail. This will not happen, and it will not happen regularly until the middle of the second month. This will take place at the end of the third quarter of 2021. The result is that the small postage stamp did not get a part of the wallet or the spirit for a few months. A small distribution company that sells these products as its main product suffers and closes down. A small shop or specialty store that sells unique items suffers. Brands that don’t belong to Tito or something like that. The herd is rotten.
    • Moreover, the average consumer is not aware that the trade in drinks for adults is very frontal. The development, creation, formulation, packaging, registration, etc. of a trademark – all this costs a lot of money and takes a lot of time. All this before the first bottle was sold. Brands launched in 2019/20, hoping that sales by 2020 will cover the debt for 2019, have been trying to survive since mid-March.
    • 2020 was a truly Darwinian year, with picking brands and small distributors/importers as the most important.
  • Year of maintenance
    • Often considered too sweet or too cheap to be competitive, RTD was born. The scenario is quite simple. The perfect storm of not wanting to shop and sail, not having people in the apartment and not having the urge to make drinks with countless ingredients marked the end of the RTD era.
    • The drinks are good, the packaging is perfect and consumer acceptance is about to enter a perfect storm of the supply and demand curve. We’ve sold dozens of brands over the years, and we’ve never seen a demand curve like this.
  • The continued growth and spread of 3PLs such as MHW and others are being improved, redefined and redesigned as vendor options. When the major distributors retreated during the Covid, the 3PLs withdrew from the model and moved on. When you enter the market this way, you turn your own rally of success into a cry for brands desperate for more sales. If 3PL’s were in the vocabulary, the power they could possess was in full flexion while Covid was in full flexion.

In fact, it seems that Kovid will run out of steam in 2021 and normalize to some extent. I feel like we’re all going to take a deep breath together and put it in the rearview mirror. The year 2021 will be a new beginning for our industry and the emergence of new unique brands in the wake of this pandemic.

At BevStrat and as a personal investor in the brand, there seems to be an end to this era, which is trying to end. Our beloved industry will survive and flourish in a different way in the future.

The year 2020 will be considered a great year for the adult beverage industry if we look back in time.

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2020 Was the Best Year for the Adult Beverage Industry

2020 Was the Best Year for the Adult Beverage Industry

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