Rethinking Channel Strategy Post-Pandemic

Aug 19, 2022 | , | Featured Content, Park Street University |

The pandemic and ongoing economic uncertainty have altered how and where consumers purchase spirits with shifts taking place on-premise, off-premise, and via e-commerce. At Bar Convent Brooklyn, Marc de Kuyper, Founder and CEO of Overproof, discussed refining the approach to on-premise sales. He explained how menu data trends can be used to determine whether a particular establishment is the right fit for a brand.

“Post-pandemic, the entire industry went digital,” said de Kuyper. “Menus are found everywhere. There are QR codes now and there are all the e-commerce platforms that have data that you can use and find for your strategy to really understand where you should focus with your brand.”

 

Tim Angelillo, CEO of Sourced Craft Cocktails, followed Marc by introducing the concept of the ‘non-premise’: the legal distribution opportunity that mobile devices have created for spirits brands. He discussed the importance of utilizing e-commerce to connect with generations that primarily spend their shopping occasions in this channel.  Angelillo also spoke on the importance of capturing consumer data and understanding different demographics.

“Gen Z is a little bit of a hybrid,” explained Angelillo. “They’re going to want an experience, but they are only going to want to invest their time and money in experiences associated to causes they support. So if you’re a bourbon brand and you support the replanting of oak trees so that you have a barrel 20 years from now, that’s something you want to communicate in an e-commerce format.”

 

Nick Buzzell, CEO of the Spirits Network, finished off the discussion by breaking down his key tenants of driving direct to consumer sales. Buzzell emphasized the potential that video commerce has to be a viable sales channel for the entire industry. Buzzell wants brands to understand the data behind consumer preferences so that it can translate to personalized storytelling opportunities that can increase influence in the demographics where it matters most.

Buzzell revealed, “I don’t come from the beverage alcohol space, but I can tell you as a consumer that the beverage alcohol space has so many fantastics stories and so many ways to engage customers that they are leaving on the table.”

 

How to Improve On-Premise Sales Using Menu Trends

Marc de Kuyper 0:09

I’m taking a little different angle today: we’re going to talk about menu data. Overproof is a company that focuses on the collection of data that can help you optimize your brand strategy for any market on a very localized level. It’s an old-fashioned way of thinking that California as a whole is purely a margarita market. That is still the case in San Diego, but looking at the data, Los Angeles is absolutely not—it’s the fourth-largest cocktail category there. San Francisco isn’t even close; it’s a spritz, negroni, and martini market. So what we’re going to talk about is how to look differently at menu data.

Marc de Kuyper 1:05

Post-pandemic, the entire industry went digital. Menus are found everywhere via QR codes, and e-commerce platforms have data you can use for your strategy to really understand where you should focus your brand. How do we look at a menu to decide if it’s a bar to target? First, we look at the composition and categories: is there a beer section, a cocktail list, or a wine section? Next, we look at callouts and formatting—are there specific featured cocktails, boxed-out sections, or stars indicating drinks they are actively pushing?

Marc de Kuyper 2:12

We also look at cocktail styles: is it a classic cocktail list, a twist on a classic, or modern-style cocktails? You can cross-reference your sales data with menu data to see what types of bars you’re currently selling to, identify whether they feature modern drinks or specific classic families (like mules or old fashioneds), and align your brand strategy accordingly. We index these cocktail families and count the featured brands directly. For example, if a menu lists Espolòn and Aperol in a cocktail, our database identifies both spirits, recognizes that Aperol is a liqueur and Espolòn is an agave spirit, notes that both are owned by Campari, and sees that both are distributed by Southern Glazer’s.

Marc de Kuyper 3:21

By counting brands and cocktail styles, we can profile a specific bar. If Southern Glazer’s is the dominant distributor on a menu and you’re distributed by them, that account might be a great target. Conversely, if you face heavy pushback in Southern-dominated accounts, you might strategically avoid that bar because your conversion rate will be lower. Taking this a step further, you can define your ideal menu profile—for example, asking for accounts featuring martinis—and filter for a targeted list of compliant bars and restaurants in any given market.

Marc de Kuyper 4:44

Visualizing menu representation in Brooklyn today shows an amaro-heavy market with strong tequila and bourbon presence, where the largest brand names dominate the menus. By analyzing a specific account—like Cecconi’s in Dumbo—we can see heavy representation from Bacardi brands. Depending on your portfolio and strategy, you may choose to target or avoid accounts heavily supported by specific competitors. Looking at cocktail categories across Brooklyn, classic margaritas and old fashioneds dominate, followed closely by negronis and spritzes.

Marc de Kuyper 5:51

Zoning in on specific brands helps you understand what the competition is doing and whether to target or avoid those accounts. Cross-referencing menu ownership periodically with your sales data allows you to analyze reorders, account loyalty, and brand performance. Isolating your top 50 performing accounts, analyzing their menus, and finding similar menu profiles across the market creates a focused sales strategy. We see customers achieve 30% to nearly 40% higher sales conversion rates in the same timeframe when incorporating menu data into their strategy.

Marc de Kuyper 6:44

By tracking brand counts across specific categories—like amari—you can map market demand down to the exact product. That covers the core ways menu data can transform your localized strategy. Thank you!

How E-Commerce is Shaping the Spirits Industry

Tim Angelillo 0:09

By a show of hands, how many people have a remote control to life? Raise your hand if you have an iPhone or an Android device in your pocket. Everyone has one of those, right? It’s a remote control to life, and it drives what we refer to as the “non-premise.” So what is the non-premise? Everyone in this room knows the on-premise—a bar—and the off-premise—a liquor store. The non-premise is every single doorknob that is not a bar or a liquor store. In the New York City area across all five boroughs, 98% of doors are not a bar or a liquor store. Yet we all have this remote control to life that gets us an Uber, an Airbnb, or Rent the Runway. We’ve invented a legal distribution channel called the non-premise that brings a bottle of alcohol to the unlicensed front door.

Tim Angelillo 2:02

When you think about the non-premise and e-commerce, remember that you still have three major demographics that use this opportunity differently:

  • Boomers: They invest their time and money in things. When they think about e-commerce alcohol, they are primarily looking for gifting.
  • Millennials: They invest their time and money in experiences. A vodka soda no longer cuts it because their real persona lives on social media platforms. You need to serve them an experience—a fully curated cocktail, the right bar tools, and the brand story—giving them bragging rights on TikTok, Instagram, and Facebook.
  • Gen Z: They want an experience, but they only want to invest in experiences associated with a cause they support. If you are a bourbon brand supporting the replanting of oak trees, communicate that in an e-commerce format. They will spend 20% more than Boomers if they believe in the cause.

Tim Angelillo 3:56

Where has the alcohol marketplace been historically? Traditional retail was built in an era to service a specific demographic—not the demographic that controls 85% of household spending power in America today. We refer to her as the CEO: the Chief Entertainment Officer. She controls 85% of spending, and traditional alcohol retail was not built to serve her in a proper format. What she wants is the ability to order from her phone to her front door and look cool on Instagram. This is where the consumer is today.

Tim Angelillo 4:59

Does any of this matter? According to Forbes, e-commerce alcohol is projected to grow from $1 billion in 2019 to $45 billion. This is a massive shift. The main takeaway is that this is an entire channel—it’s not just Instacart, Drizly, or Sourced. Just as you wouldn’t build a brand strategy or packaging exclusively for Applebee’s or Fleming’s, you should build for the entirety of the channel. When considering demographics, keep shopping occasions in mind: the older demographic is okay with convenience taking a bit longer, while the younger demographic is not willing to wait at all. If it doesn’t exist on Uber Eats, you don’t exist in their world.

Tim Angelillo 6:32

A massive advantage of e-commerce is the data opportunity. Capturing first-party consumer data is critical to your marketing campaigns. With Facebook ad performance changing and Google phasing out third-party cookies, capturing your customers’ data—knowing who buys tequila every Thursday—helps drive those algorithms effectively. Furthermore, third-party delivery platforms like Uber Eats, DoorDash, Grubhub, and Postmates function as search engines for the food and beverage industry. Their algorithms prioritize metrics like Order Defective Rate (ODR) rather than traditional keywords, making it crucial to understand how these platforms rank products to reach Gen Z.

Tim Angelillo 8:52

The transition era has arrived through third-party providers, to-go cocktails on-premise, and regulatory shifts. In February, the TTB noted that states should allow direct-to-consumer (DTC) shipping, with Kentucky taking the lead. Consider the wine DTC shipping business—it’s a $4.4 billion market, and the three-tier system still exists alongside it. That is what the future of spirits shipping looks like.

Tim Angelillo 9:37

E-commerce is an entire channel worth $45 billion over the next three years. Each platform serves a slightly different use case. Your marketing campaign should focus on serving the channel, capturing data, and using those insights to inform the rest of your business. The US alcohol industry overall is a $254 billion market—we aren’t trying to replace the bar, but rather make the bar a better experience by using consumer data to understand their preferences everywhere they go.

How Video Drives Direct to Consumer Sales

Nick Buzzell 0:09

Thank you. We’ve heard a lot about data, and we’ve seen a lot of different trends emerge through the years, but more importantly, through the pandemic period, there’s been a lot of change in consumer behavior. Spirits Network was born out of the idea that we could actually do for beverage alcohol what Food Network did for culinary. My entire career has been as a television producer, filmmaker, and storyteller, and the power of storytelling has never changed—in fact, it’s become more important now than ever. Spirits Network was created so that not only could we show and tell, but we could also allow consumers to actually purchase what they see from any device, including their television.

Nick Buzzell 1:34

We built this really for the industry and the community to have a forum to stream their content, tell their story, and sell their product. People in the ad space have called this the holy grail of advertising because it can attribute an ad dollar directly to a sale. It’s shoppable entertainment and direct-to-consumer. We work with all the door-to-door and last-mile delivery companies, and we’ve built our own retail network to get products to consumers. During the pandemic, we saw a huge increase in traffic and engagement time—our average site duration is 14 minutes, and our average cart size is $250.

Nick Buzzell 3:15

Our key touchpoints involve collaboration with industry partners, major liquor producers, emerging brands, and community tastemakers. The revolutionary component here is video commerce: whether you are on your mobile phone, Apple TV, or a desktop, you can watch programming that’s anywhere from two to twenty minutes long, learn, engage, and purchase—or just lean back and enjoy. Getting liquid to lips, getting people to try the product, and owning the home bar is key. In fact, our audience is 54% female, with major key markets in New York, Texas, Ohio, Florida, and California.

Nick Buzzell 5:54

We act as an accessible resource distributing content at a global level—we recently launched in the UK and are expanding into Canada and the rest of Europe. Now brands can think globally and act locally. We have content packages for every level: concepts that start around $10,000 to $15,000, as well as multi-million-dollar productions. One key piece of advice we give brands is to stop renting their audience from Facebook or Google and start owning their audience with us across the broader audience universe.

Nick Buzzell 8:16

To give you an example, we did an exclusive drop for Cardi B’s Whipshots in December and sold over 15,000 units. We used a “drop zone” concept—similar to the sneaker world—where we opened the store every day at noon and sold out in a couple of seconds. In another instance during the pandemic, we launched Whiskey Wednesdays, reviewing three whiskeys averaging $80 to $100 per bottle, and sold thousands of bottles across 23 original episodes working with both emerging and global brands.

Nick Buzzell 9:55

Instead of collecting data in a way consumers find invasive, we use it to help them discover products through curated, personalized video shopping. When you sign up for free at spiritsnetwork.com, you can fill out a profile. If you tell us you like tequila, vanilla, golf, and fishing, we produce a personalized profile on your Discover page featuring tequila and golf or fishing-related content. Once a customer makes a purchase, we can re-engage them continuously rather than spending tens of millions of dollars reacquiring them every year.

Nick Buzzell 11:45

We also offer a Bottle of the Month program, and based on our data showing that nearly 80% of our audience likes golf, we are launching Golf Nation with former PGA President Suzie Whaley. Video gives brands the power to show, tell, and convert directly to a sale. Check out Spirits Network, and if you’re interested in working with us or have ideas, please reach out to me directly. Thank you so much!

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