During April 2020, Brand Reveal ran the Day After survey to understand the impact of the C19 crisis on the Marketing Mix of wines and spirits. This fourth article (out of 6) highlights the views of 79 industry professionals on the Distribution evolution in wines & spirits. The key message : brands want it all.
Overall, brands express a high willingness to reinforce presence in all trade channels. This is probably dictated by the sales decline and need to turnover when the years is almost halfway.
Among the big distribution channel types, there is a relatively lower willingness to reinforce presence in On Trade. This is probably driven by the short term social distancing rules and uncertainties of these channel. Off Trade and Online are the channels where brands wish to reinforce presence as they are the gate way to home consumption.
This further highlights On Trade channels as the big losers from the crisis, whereas Off Trade do remain essential to drive volumes and On Line distribution appears as a way to develop new sales. This willingness to reinforce relations with trade partners is a positive sign as it may accelerate the development of joint marketing and sales activities. At the same time, brands remain willing to open up new markets and to look for new distributors.
In other words, brands are willing to improve existing ways of working but have no (less?) scruples when looking for new or additional partners. This illustrates perhaps a change in attitude, where many brands were not at ease with digital channels because they often clashed with classic distribution.
Overall, the sales necessity created by C19 is transforming distribution priorities in the short run with a loss of importance of On Trade to the benefit of Off Trade and Digital channels. If "necessity is the mother invention", it also seems to spur the search for new partners and opportunities. In other words, the C19 is having a double effect on brands when it comes to Distribution : the desire to work closer, but also to be free to look for new distribution partners to work with.