Nov 272012
 

 

 

 

Over the years many parts of the beer business have changed, but one area that didn’t even exist when I first started in this industry is the area of category management, which has been created partly due to the changing retail landscape. Other drivers in the creation of category management have been the number of new brands and packages, which continue to grow even as I write. Remember in 1980 when there were less then 50 breweries in the US?

Up until the late 1980’s, a brand’s shelf space was allocated on market share. There were not that many brands as compared to today, but in addition, most cold boxes were 12 feet or less, too! At Schlitz in Louisiana in the mid 70’s we used statewide shipments showing our share (48%), however, off premise stores were mostly mom and pop’s, drug stores, and some c-stores. At Coors in San Antonio we had state shipments, but we could figure shipments out by market. Again, off premise was mostly c-stores, ice houses, package stores, and one grocery chain. Later at Coors of Kansas, we sold on state shipments, however, we published our own newsletter every quarter and we graphed shipments (Coors was at 61%). This worked well if you were the market leader or had a “hot” brand which was growing. We had three Kroger’s in the Valley which did 5% of our total business. Their boxes were set by each store manager, so relationships went a long way in what space (and ads) one was able to obtain. Due to a strike, however, Kroger eventually closed and was taken over by HEB.

Last summer while sharing dinner with friends at a local burger joint, I learned one of the guys had worked at the AB corporate offices in St. Louis during the 80’s. As it turns out, my friend was the one behind AB’s drive to create “fact based selling” and category mangement for chains! A man by the name of Jack Lewis (MRIC) had “sold” AB III on how to set cold boxes using a “plan-o-gram.” MRIC didn’t work out, but AB III pulled the process, MRIC into St Louis and had his team develop the concept. It was called ACCUSpace and was under National Accounts. At the time, National Accounts focus was on new distribution and promotions, not on space management. Then using Nielsen and shipment numbers as a base, AB started this new focus which evolved into “fact based selling.” Soon the retailers were asking for facts. My friend bought the first IBM PC and wrote the first PC based shelf management program for wholesalers, then called “ShelfSet PC.” After getting the information from the wholesalers into the PC, retailers could see how the boxes could be set to benefit them. Then the retailers started asking for pictures of the sets. Figures. My friend found a machine used in Hollywood that could take pictures of beer packages and transfer them to 35mm film.  My friend then processed the images and sent back to the wholesalers. And the rest is history.

In the last 20 years or so we have moved to “eignevectors,” which is the concept of finding out how the consumer interlates in their buying. My friend stated with “demand shaping” or how do you shape consumer behavior, vectors shape such things as pricing, social networking, promotions, etc. So the question becomes these days, how does a vector move a brand? New technology is moving to understanding consumer behavior by videoing and tracking consumers (imaging) in stores and recording what the consumer purchases and how long they spend doing so. The top two products which the consumer spends time with? Ice cream and beer!! No surprise.

Relationships to shipments to fact based selling…. to todays observed behavior at the “zero moment of truth” in our industry over hamburgers and beer with the man who change it all…six degrees of separation.

 Posted by at 8:17 am

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