The industry’s official answer this month is that it got too hot outside.
I get it. Worst week since April. Down 8.6% on volume, down 5% on dollars, third bad week in a row. And yeah, it was hot. There’s a real thing where it gets too hot to drink beer, and Lester Jones has been talking about it for years.
But nobody needs another weather report. If you’re sitting in front of your ownership group in September trying to explain August, “it was hot” is not a plan. So let’s talk about what is.
Here’s what we’re actually seeing on client calls right now. Routes running down 10, down 11, down 15 on volume. And a good number of those same operators are still flat or growing on GP and GP per CE.
That gap is the whole conversation. Same market. Same consumer. Same heat. Different outcome.
Mike said it better than I would have on the show. It’s so easy to tell my boss that’s what the market did to me. It’s not as easy to tell my boss this is what I did with the market I was given.
So here are three places we’re finding the dollars when the cases aren’t coming.
1. The rest of the truck
We call ourselves total beverage distributors and then we laser focus on bev alc. That’s where all the attention goes, all the objectives, all the incentives, all the conversation on the Monday morning meeting.
Brian Rosen at InvestBev keeps making a point I think about a lot. Beverage alcohol is struggling. Packaged CPG beverage as a whole is still growing four to four and a half percent annualized. That growth is out there. It’s on your truck. Some of you are hauling salty snacks around.
So what are you doing to capture part of it? Are your reps being asked about it? Is any of it on the incentive? Because if it’s not, your reps are doing exactly what you asked them to do, and what you asked them to do is chase the one segment that’s bleeding.
2. The accounts nobody has time for
This is the one that stopped me cold this month, and it was news to me when Mike brought it up.
A client took about 160 high-end accounts that were not being serviced all that well, pulled them out, and built a dedicated team. Three people and a team lead. That team is projecting 145% of target.
You look at that number and think, man, that team is killing it. Then you dig in. It’s not a better team. It’s not a better market. Same market, same consumer, basically the same products. New attention.
Mike lived a smaller version of this when we were at Atlas together. It wasn’t 160 accounts for us, it was about nine. We dissected the market and found that some accounts are just accounts, and some accounts are more than accounts. They needed somebody to talk to them. They needed somebody to actually sell to them. So we made a couple routes smaller in terms of stops and gave those accounts the time they deserved. It worked.
Ross frames it as success happening at the margin, and I think that’s exactly right. You are not going to build a big enough display at your biggest account to fix this. Adding 80 cases there changes nothing. But you can move the needle 40% at a small influential account. Do that across 160 of them and now you’ve got a real number.
Here’s a question worth asking yourself today. Do you have a list of your most influential on-premise and off-premise accounts? Not your biggest. Your most influential. The place where everybody goes, where a tap handle turns into a hundred people trying it. I’m still surprised how many distributors don’t have that list built anywhere.
3. The route you think is covered
We hit this hard on the previous episode and it belongs on this list. When a rep is out and nobody really covers that route, it runs down 20 to 25%. Two out of ten routes doing that puts the whole company down 5% for the month.
Everybody says “well, Johnny was out” and moves on. That’s a 5% you’re leaving on the table while you’re in a conference room trying to find 5%.
Now the warning
Volume is down, so the first instinct is to cut routes. That’s just where the brain goes.
Be careful there. You can see the payroll savings on a P&L the day you cut a sales position. There is no accounting line for the value of the attention that person was giving those accounts. You find out what it was worth later, when the volume follows it out the door and the GP catches up to it.
If you have costs to cut, cut them. I’m not against efficiency. But as Ross has said to me a hundred times, cutting 5% and growing 5% are two completely different numbers. They’re also two completely different outcomes. One is painful and one is fun. And you can walk and chew gum. Charlie Brown did both at the same time, reorganized his route to market and grew the business in the same year.
That’s the word I keep coming back to. Sustainable. It’s gotten hijacked to mean solar panels and wind, but the real meaning is the ability to do what you’re doing today next year, and the year after that, and for decades after that.
We make our money in pennies and nickels and dimes. Always have. Six distributor deals have been announced since the start of summer, in under two months, during peak selling season. Families are making decisions right now. The ones who come out the other side of this are the ones squeezing out the pennies instead of waiting for the weather to change.
What to do Monday
Pull your list of influential accounts. If you don’t have one, that’s the assignment.
Then ask two questions about it. Who’s actually calling on these, and how much time are they really getting?
If the answer is “they’re buried at the bottom of a big route,” you just found your 160 accounts. You don’t need a better market. You need to point attention at the places where attention pays
Want the full conversation?
We got into all of it on Episode 123 of the Tapped In Sales Podcast, “Three Places to Find GP When Volume Falls Apart.” The August numbers, the PPI problem your suppliers are about to hand you, the RTD run, and a prediction I tried to change mid-season.
▶️ Mike walks through the 160 accounts at the 11:40 mark: https://youtu.be/h1yfcSLlo-c?t=700
If your volume is down and you’re trying to figure out where the profit is hiding, let’s talk. vxptech.com
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