Retailers face growing shortage of leading brands of spirits and wines
Craig Maske can’t seem to keep his shelves full. And he is not alone.
Like many retailers across the country, Maske, partner and general manager of the three Sherlock’s Retail stores in Atlanta, GA are struggling with frequent outages of the top 20 spirits brands. It’s mostly with Crown Royal, Patrón and Hennessy, he reports, but it also has an impact on wine, especially at the start with bagged wine brands like Bota and Black Box.
The shortages started at the onset of the pandemic last spring, improved somewhat over the summer, but have accelerated this fall and this holiday season, and are now also having an increasingly significant impact on people. major brands of champagne.
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“If I wanted to buy 20 cases of Hennessy, my distributor could send me one,” says Michael Bradley, director of Liqueurs from Crazy Bruce outlets in Bristol and West Hartford, Connecticut. “Some clients leave because that’s what they came for. Some of these items like Hennessy and Patrón, they’re almost a category on their own and customers just want that brand name.
An increase in demand is largely the root of supply chain problems: Patrón (up 40%) and Hennessy (up 38%) have exploded since November 1, according to chain data IRI. Nielsen reports an overall increase in tequila of 55.5%, cognac of 56.2% and ready-to-drink cocktails of 131% in September and October.
Corey Bronstein, senior vice president and general manager of New Jersey wholesaler Allied Beverage Group, reports that the exponential growth of his retail customers has made it impossible for his business to restock quickly enough. “We were simply out of stock on key brands. We have never seen increases like this, especially in Cognac which is a bear to keep in stock–mainly Hennessey, Rémy and D’Ussé,He describes. Closures and restrictions on Pennsylvania state-run liquor stores have sent many residents across the border into New Jersey to buy, Bronstein says, which has increased the pressure. on the supply chain Retailers in Ohio and Maryland have also received a flood of buyers from Pennsylvania.
Blackouts come in waves, says Dustin Mitzel, CEO of the four Happy Harry’s Bottle Stores in Grand Forks and Fargo, North Dakota. “At first, we found that wholesalers did not have sufficient inventory to meet the accelerated demand for items, like boxed wines, for a few weeks, but this stabilized throughout the summer.” , he explains. But then, in July, stockouts on a growing number of spirits and ready-to-drink brands escalated.
Now champagne supplies are also getting shorter, Bronstein says, with consumers “celebrating missed moments at home,” he said.
What suppliers say (or don’t say)
Many retailers report chronic outages and short-term disappearances of certain SKUs. Sometimes their distribution partners can warn them what to expect; for example, some learned that the Patrón Distillery focused exclusively on 750ml bottles of tequila blanco for a while, which meant that the producer’s side items like XO Café and Citronage would be out of stock.
However, most retailers say that in general, suppliers have remained largely silent on the cause of the outages or what to expect, leaving retailers to accept the quantities of cases their distributors are able to distribute.
A spokesperson for Patrón said the pandemic is “changing the frequency of traffic jams, causing a shortage of stocks in the United States. “
Likewise, a spokesperson for Diageo responded to requests for comment this way: “With the continued strong demand from Crown Royal in recent months, coupled with the continued impact of COVID-19 on our production in terms of protocols and As a precaution, a handful of our best-selling whiskeys may be temporarily out of stock in certain locations in the United States. We are working to resolve this issue as quickly as possible. ”
Jonathan Yusen, president and CEO, Americas, for William Grant & Sons, says the pandemic has made some outages inevitable but manageable. “During the first few months of the pandemic, we were able to maintain a strong continuity of supply on our most important SKUs, but we experienced periodic stockouts of other SKUs that were lower on the priority list. As the pandemic continued throughout the summer, we were able to increase production capacity and have since improved service levels, even on these lower priority SKUs, ”he said. The supplier relaunched super premium Milagro Select tequila as the agave spirits boom accelerated during the pandemic, putting pressure on the bottle supply that has just eased.
Other suppliers, including Campari, Moët Hennessy and Proximo, declined to respond or did not respond to requests for comment.
It’s not just the liquid that’s causing problems. E. Lloyd Sobel, Commercial Director of Breakthru Beverage, says the increase in domestic consumption has impacted glass and aluminum, which has impacted the beer, seltzer and water categories. of wine. “Many industries are experiencing supply chain disruptions related to COVID. Within alcoholic beverages, a significant shift from on-site retail to off-site retailing and an associated increase in consumer demand for the 750ml and 1.75L formats has resulted in shortages. ”
Retailers pivot to meet demand
“Whatever the reason for the outages, I have to solve the problem as best I can; as a retailer, we need to replace as well as possible, ”says Scott Arndt, COO of the Massachusetts retailer Austin liqueurs to Shrewsbury and Natick, and Dub at Mansfield. For example, she was told to stop expecting Godiva chocolate liqueur during the holidays. “But it’s harder with things like Crown Royal which are a lot more specific,” says Arndt. “If we don’t have them, our customers can just go to another store. ”
The general agave boom, however, has boosted brands beyond Patron, he describes, with a number of tequilas disappearing from the shelves. Arndt claims that ultra-premium brands like Don Julio 1942 and small, high-priced brands including Casa Azul have benefited from the premiumization of its customers.
Maske tried to move Hennessy customers to alternative cognacs, like Tesseron Composition. But when he receives products in limited quantities, he must decide how to store them. “Do I put six on the shelf and let it run out until the next day?” Or store them all at the same time? There is no right way to handle this, ”he shares.
Small brands are also impacted
For emerging brands, the difficulty of converting consumers during the pandemic when sampling opportunities are scarce has been magnified by supply chain shortages. For Roy Danis, President and CEO of Brands Conecuh, getting enough Clyde May’s Alabama Whiskey produced and bottled has been very difficult as bottlers slow down production due to safety concerns related to the pandemic. As a result, Clyde May’s was also forced to handle outages across the country.
Transportation was also problematic. “The items we want may be available, but getting them to our location in the upper Midwest has proven to be a challenge,” says Happy Harry’s Mitzel. “At the end of the summer, dozens of trucks could not reach the market. If we were to get a truck from a California winery group for a promotion, we would normally have it in a matter of weeks, but lately we couldn’t even predict the arrival date. It’s not just “Can I get the product?” It’s “Can I get it and get it here?” “
Bronstein says retailers should continue to expect the unexpected. “I am sure that, like many distributor GMs, I have spent more time in logistics and purchasing in the past nine months than in my entire career. As the holidays approach, the pantry is loading again, ”explains Bronstein.
But retailers are also reporting positive side effects, such as increases in side ingredients in cocktails (vermouth, amaros, bitters and mixers) and experiments with new brands if their product of choice wasn’t available. “Over time, people started to explore and enter niches that they usually wouldn’t have at home. They really explore our selection in a way that I haven’t seen in a while, ”says Mitzel, who also sees a boom in bar accessories.
And sales remain strong in North Dakota, despite periodic product outages, for which Mitzel, like most retailers, feels incredibly lucky. “Every month has been surprising,” he says. “People continue to shop and buy things at a level that I don’t normally see.”
For this reason, Bronstein reminds the trade to keep the headaches associated with out of stock in perspective. Like many wholesalers, the Allied team has devoted considerable energy and resources to supporting troubled restaurant customers and on-site sales representatives with new sales tools and take-out solutions. “It has been heartbreaking to watch this unfold for our customers on site and we are there for our internal and external stakeholders,” he said.
Jack Robertiello, from Brooklyn, New York, worked and wrote about the food and drink world for most of his adult life. He is a frequent speaker at conferences and judging competitions, and works in the industry as a teacher and consultant.