Producers and RetailersCohorts or Competitors?
Main photo courtesy of Tool Shed Brewing
Thanks to lobbying efforts by the Alberta Small Brewers Association, local breweries and distilleries now have the option of selling their products in farmers’ markets, something that wine and mead producers have been able to do for the past nine years. AGLC Acting President & CEO Alain Maisonneuve is on record calling it “a win-win for Alberta’s businesses and consumers”.
Let’s look at the potential impacts this decision will have on liquor retailers in the province. How can retailers maintain and grow strong relationships with these producers who are selling their own products in-house and now also at farmers’ markets province-wide?
It’s important to keep in mind that breweries and distilleries have been able to sell their products out of their own facilities for many years. This is where the vast majority of their products are sold beyond the walls of a traditional liquor retailer. Brewers and distillers love being able to sell out of their own facilities, where they have much more control over their brand, message, and product there.
This increase in brand awareness can be something retailers can harness to further increase the sales of those products.
This can, however, create a somewhat competitive relationship. If producers choose to sell their products at their own respective breweries, taprooms, and distilleries as well as at various farmers’ markets in the province, they theoretically are less reliant on retailers to sell those products on their behalf.
Farmers’ Market Sales
Selling in farmers’ markets is a relatively new opportunity for brewers and distillers, but it’s not an especially lucrative one, and it’s largely seasonal. While some markets are open year-round, they really see significantly less volume during winter months. Although farmers’ markets offer a great opportunity for producers to reach out to customers face-to-face and interact with them, putting a face on their brand and pitching their products, it isn’t where a significant portion of their sales are made.
An Opportunity for Retailers
For these reasons, retailers don’t need to be concerned that this change in legislation will seriously impact their bottom line. Instead, they should find out which products they carry are also being sold at farmers markets, so that they can use it as a talking point with consumers. This increase in brand awareness can be something retailers can harness to further increase the sales of those products.
While a producer might capitalize on the ability to sell their product at their own facility where they can provide customers with a more immersive experience, it is still something that happens on an extremely local scale. Having their products on as many shelves as they can across the province and possibly in other provinces is where they’re likely to see the lion’s share of their sales.
Producers that I’ve spoken with have told me that they must be mindful that their in-house pricing is comparable to that at liquor stores, so that they don’t see a lot of pushback from those retailers. Remember: they want their product on your shelves, and it’s in their best interest to work with you.
With this in mind, let’s look at some ways that retailers can still foster strong relationships with these producers so that they can continue to view you as attractive clients.
Allowing producers to set up inside your store to do tastings is something that you’ve likely been doing already. This is a great opportunity for them because they can speak to end consumers one-on-one and describe their product the way they want to. This is also a great opportunity for you as a retailer to study how they do this, so that you can do the same. Spend time with the representative to learn about how they’re pitching their product. Ask as many questions as you can about the product to broaden your knowledge base. Be sure that you know how the product is made, how it should be stored, and how it should be consumed, according to the producer.
Spend time with the representative to learn about how they’re pitching their product.
Spend time training staff on a continual basis. There’s nothing more important than product knowledge in the service industry. Producers will be more than happy to have their product in your store knowing that it’s in the capable hands of competent staff and sales personnel.
Host Special Events and Encourage Cross-Promotion
Having reps set up for a few hours to do tastings is great, but consider other opportunities or events as well. If you have a growler bar on-site, speak with brewers about hosting a tap takeover, where you tap many of their beers and have reps in store to fill growlers and sell to customers. Promote these events via social media, and have the brewery do the same.
Instead of viewing the new legislation from an angle of competition, look at it as cross-promotion. Customers will likely speak to you about having tried products at a farmers’ market or visiting a specific producer. They might describe how they toured the distillery or brewery. They might talk about the food or ambiance in the taproom. If you have visited those producers, you can share that experience with customers and start to develop a rapport with them. This is just another level of product knowledge, and one that makes the sale feel more personal to a customer.
Collaboration is Profitable
Brewers enjoy collaborating with one another, and from what producers tell me, they actually see their sales increase in farmers’ markets when they have other brewers selling their products alongside them. This spirit of collaboration is one that can be shared with retailers as well.