Are you reading article after article about the struggles in the wine and beverage alcohol industry today? Are you wondering how you can possibly compete in such a negative market environment with so many strikes seemingly against you? If so, you may be heartened by this article.
Strong company cultures and excellent overall company leadership, especially at the C-Suite level, can create and sustain a thriving company, regardless of market conditions. The industry has always weathered adverse conditions. We cannot control some of the more macro (social, economic, supply chain, etc.) factors in our world and industry; however, we have total control over how we react day-to-day at the individual company level. The 2GO Advisory Group experience tells us ten factors – in no particular order and not exhaustive — can help individual wineries and other beverage alcohol companies thrive despite worse than normal market realities.
- Create the Chief Operating Officer (COO) role. It is important to have a COO in a growing company to work alongside the company Founder / Chief Executive and to manage day-to-day operations. This position implements the Founder’s vision for the company and helps create and champion that vision. From strategic planning to operational efficiency, talent and financial management, and customer satisfaction, a COO helps ensure company success in a way the company Founder / CEO, trying to wear multiple hats, cannot.
- Be Relentless About Maintaining a Strong Company Culture. We could not agree more with the famous Drucker adage about the pre-eminence of culture over strategy. Although this could be a paper on its own, the thought here includes employee recognition, cross-training, equitable compensation and incentive plans, consistent and positive communication, leadership “by walking around,” focusing on results, employee development and education and having fun.
- Create or Reinforce an Effective Human Resources Strategy. This function is often non-existent or undervalued in many instances. A strong Director of Human Resources should have a seat at the leadership table with appropriate compensation and be tasked with the items described in #2. Too often we see a Founder / CEO or Chief Financial Officer assume this role to cut costs to the company’s significant detriment, not understanding the critical importance of Human Capital in a successful business.
- Accountability Chart. An Accountability or Organizational Chart is a must for any business under the headings of Sales and Marketing, Operations and Finance and Administration. Too often, we see small companies in which all staff thought they reported to the CEO and were not told otherwise. Although this may provide the CEO with an illusion of control, it actually works just the opposite and is a recipe for substantial confusion.
- Cash Flow Management. Although carefully monitoring cash flow at all times would appear self-evident, the best companies are absolutely fanatical in this area, which is perhaps the most important metric in any business. During times of broader market challenges, continuous focus on cash flow sets the best companies apart from their competitors and helps to offset a market downturn.
- Advisory / Formal Board. Good companies have boards that provide valuable insights to the leadership team about strategy and direction.
- Strong Direct to Consumer (DTC) Business. In the beverage alcohol industry, a strong DTC is a must for all but the largest (billion dollar) operations. Those companies that invest in their DTC programs, primarily with marketing and strong leadership, will be able to capture the margins that are necessary to provide support during difficult times.
- Professional Services Relationship. Many smaller companies are reluctant to pay for strong professional services and believe they can do without. Our experience is that audit or review services, at a minimum, are differentiators for the better companies as a check and balance on internal protocols. Such professionals can provide a great barometer for your business given their broad client base.
- Marketing and Sales Plan. Too many companies in our experience do not have clear, documented sales and marketing plans. Often, the visionary founder is the keeper of whatever sales and marketing plans there are. Documentation in this area is vital.
- Stock Keeping Unit (SKU) Rationalization. Although it is important to diversify product offerings for subscription members, too many beverage companies make too many products and fail to monitor SKU margin performance. We often see underperforming beverage companies that have no idea about their margins and how to manage them.
Our team at 2GO Advisory understands what it takes to run a successful business, regardless of market conditions. In fact, we can help your business thrive – not just survive – during tough market conditions, such as during the pandemic and wildfires. With respect to the former, our craft beer experts significantly improved performance from one prominent craft brewer compared to the immediately preceding pre-pandemic years through among other actions, a strong pivot to off-sale, careful and deliberate resource management and re-imagining an already strong DTC program.
Macro market conditions can certainly be challenging; however, we see that well-run and disciplined companies which implement the ideas above thrive in any business climate. We are here to help at any time.
For your Operations or Food & Beverage Talent needs in direct hire, full-time or part-time contract staffing, contact Executive Recruiter, Leesa Meintzer at leesa@2gorecruiting.com.
Jeff Ottoboni is a COO Partner, leading the Food & Beverage Practice at 2GO Advisory Group. He brings to our clients years of deep experience in the beverage alcohol industry, encompassing virtually all business operations and companies large and small. Jeff emphasizes talent development, education, team building, employee recognition, coaching, and encouraging cross-functional participation and viewpoints in critical business decisions. You can contact Jeff at jottoboni@coos2go.com
Leesa Meintzer is an executive recruiter with more than 20 years of experience in talent acquisition. She excels in partnering across various business functions and brings a comprehensive perspective to talent acquisition. She works with Engineering, Healthcare, Product, Finance, Accounting, Business Operations, Sales, Legal, Human Resources, Learning & Development, and Talent Acquisition for corporate and high-growth start-ups.