Competitive Market Data: The What, Why, and YTD Trends

Speaker 1 [00:25] Good morning everyone and welcome to our first sponsored session of Brewbound Live 2022 Winter edition. Sorry, I left, uh, left two years behind. I think we all did. Um, we are gonna be joined this morning by Brian Dillon of Fintech, and one thing that's super interesting about Brian is he joined this company which actually. Has a vertical named after it, um, from the supplier side, he had a multi-year career at Odell, did some distributor management, has launched products, and now he's here to share some of the, uh, The leverage that you can get from competitive market analysis, to gain a competitive advantage, and after all, what is the beer business, if not a massive competition to grind your enemies into dust. Um, Fintech recently did a year to date trends report, and he's gonna deliver some findings from that and really give you guys, uh, give everyone, pardon me, give everyone a, uh, an overview on the way this kind of of, of analysis, uh, can help you grow your, your beer businesses. So please, you're here to see him, not me, Brian Dillon from Fintech. So here's your, you know, green Instagram.

Speaker 2 [01:58] Awesome. Thanks, Jeff. All right, good morning everyone, and uh, to Jeff's point, welcome to Santa Monica Brewbound Live 2022. Uh, this is my first Brewbound Live experience and so I'm quite excited and honored to be on the stage speaking today. Um, I will tell you I'm a little bit nervous, so no worries, uh, but also thank you for your time. I really appreciate you guys taking the time out of your day to come and and listen about Fintech. Um, so we'll get going here in a minute, but I wanted to, although we do deliver insights and Fintech is known for IRI category insights and among other solutions. We're not gonna get too deep in the weeds today on that. There's an industry rag up later at 9 o'clock or 11 o'clock rather, that is gonna deliver a lot of those insights, so we don't need to bog into that, but I, I will give a kind of a very high level broad overview, um, and then we'll leave the industry updates to our peers later today. So, um, Jeff mentioned my bio a little bit, and yeah, I mean, I was with Odell Brewing for over 12 years running national account management on and off premise. We launched a hard kombucha company, we also launched a canned wine company, all of this right in the peak of COVID, right? So we learned a ton. There's a lot of challenges from a supply chain and just really just building the brand story during a very challenging time in our, in our history. Uh I'll go ahead to the agenda. There's me, my beautiful mug. So today we're gonna really talk about the complexities of the three tier system really evolving and how Fintech is driving the evolution of data. We'll go into a very brief IRI category insights and then I'm gonna share a little bit of cross category. Obviously it's a beer audience today, but as many of us know, the suppliers are dabbling into some cross category regardless if you're a brewery or a winery and producing cross categgory ideas. So, um, moving right along into the complexities of the three tier system, I'll be covering 4 primary areas today. The first is vendor consolidation, right? When I say vendor, I'm speaking supplier as well as distributor, so vendor holistically, but consolidation, merging operations, merging their sales teams, merging their brand families, and having to navigate that out in the marketplace. And lastly is a lot of Bev Elk and non-Bev Elk companies are actually partnering to again take a bite out of the beer category potentially. Second is a very crowded market space, right? Everyone out there is vying to Jeff's point. Everyone's vying for that shelf space, uh, fighting for that market share or consumer engagement. And so another thing to keep in mind is RTDs are really taking a big chunk out of the beer. Category and we'll look at that in a little bit later. And then thirdly, innovation, innovation R&D challenges. How do we grow the business, right? It's a, it's a, it's a crowded marketplace out there. There's new items coming up daily. How do we grow? What style? What pack type? What price point? What market are we going to win in? Lastly, it's very challenging to navigate the single UPC multi-vendor conundrum, right? One pack type, one UPC, however, you get into different distributor houses and you have multiple numbers. You get into retailers, they have their own set of numbers, so very disparate data sets, and the nice thing about using category data is it allows to tie all those in together. So how do we as an industry adapt to these changes? We need to be adapting to the consumer preferences or pressures. And there's 3 primary consumer preferences or pressures that are affecting the business as we speak today, uh, changing consumer, a diverse culture, we've got sober curious, we have an aging drinking population that's going for alternative. We've had a lot of chats about NA and low, low ABV, um, and then obviously the better for you in the health conscious category as well. And so second consumers values affecting purchasing patterns, um, supporting local tying to their own values whether it's women owned black or Hispanic owned or even just jumping into the organic and the health conscious, uh, and then as I mentioned the lower non elk. Lastly, digitization of the Bev E space. e-commerce has exploded. We've seen eCom was emerging slowly pre-COVID, but it has accelerated through COVID and it's not going anywhere, right? Each state has a little bit different law, but we are able to navigate those via e-commerce or DTC. The solution to the challenges and the noise I've mentioned is competitive data. Why competitive data allows vendors to go beyond the broad national and regional trends, understand consumer behavior and buying preference, and lastly navigate that supply chain demand and inventory channels to appease our retailers but ultimately to appease the consumer. We at FinTech are evolving and changing the way data is being leveraged and utilized. We are a data company, not a beverage company, so we don't have a horse in this race. We can deliver unbiased info to the vendors, which is, uh, sets us apart, and then, uh, we are trusted with 1 in 3 Bevva transactions in the US, so we can stack, as I mentioned, multiple data sets, um, depletions, our internal transaction data, as well as, uh, syndicated data via IRI. So FinTech is uniquely positioned, as I mentioned, we're sitting on loads of data and it allows us to pretty much stack those and then deliver that insight to the end user as opposed to an analyst approach where the field team is fully dependent upon those insights being flown from the analyst to the team. So you can imagine having something at your fingertips for your field team out in the market that allows the insight to bubble up while they're speaking right there to the retailer or prior to as they position themselves for that meeting. Um, so category insights now onto a quick look of what Fintech does deliver, and this is just really high level summary of some of the items that we're able to deliver currently. This is a beer. It's simply looking at category and, uh, performance and development metrics. You can see on the left, it's a segment analysis. You're looking at how is your brand. Um, positioned or competing against other segments within the beer category and then overall certain trends whether it's volume or dollars or um market availability for that matter, and then on the right it's actually showing um development so dollar share again by segment within the beer category. It's all IRI powered is what we delivered. We are the exclusive partner of IRI and currently we deliver off-premise insights, but we are working towards, uh, delivering on-prem in 2023. So a little bit more about the IRI insights I mentioned the performance and development metrics. In addition to that, uh, we can take a look at market availability or what IRI would call CWD categorical weighted distribution. Another metric that's found is velocity and productivity, dollar sales per point is the actual measure. And then lastly we provide a summary of columns and rows which has a host of measures specific to retailer or geography that you're looking at. The granularity of the data allows us to go, I kind of use an umbrella analogy. Umbrella is the total US coming down the handle you're into a region view down into the market view, and then certainly all the way down into the retail, so we're getting right into the retail scans. And then lastly is a CRMA which is a, it's a rest of market, so you have your competing, uh, retailers within that data set. A quick year over year comparison is another way you can kind of take a look at 2021 versus 2022, and you can see the vast differences in performance based on the actual segment. And then revisiting that supply chain and inventory and consumer preference, competitive data helps vendors, uh, you know, carry proper inventory levels of the right items that are going to be moving the dollars and ultimately drive productivity and profitability. Quick cross category. And this I just wanted to throw in, as I mentioned at the beginning, is simply we're here for a beer audience. However, there is a lot of cross category suppliers in the room, perhaps, and all in all we've seen a lot of stabilization in Q4, which has been quite good. 2022 has been very, very challenging for all, um, and what's happening is we are seeing stabilization. We're seeing beer finally grow in Q4. And then spirits are actually, uh, they're also growing as well, but a note on spirits is if you were to back out the RTDs, spirits are actually down about 3%, uh, year to date, uh, which is kind of a, you know, it's kind of peel the curtain back and you'll see what's really happening there. So what does that really leave for 2023, um, and that's kind of a question for the audience and, and certainly something to, to look forward to. So to recap very quickly, um, you know, the current dynamic of the three-tier system is very challenging and quite noisy, uh, you know, we're adapting to the new consumer preference that I mentioned. Um, leveraging competitive data helps vendors stay on top of the consumer trends and ensure supply and demand alignment. And then lastly, uh, uh, Fintech is now leading the charge as I mentioned, we're, we're kind of evolving the way we can take data and provide it to our vendors, um, and we do, we do adhere to all three tiers there supplier, retailer, and the consumer. Um, in closing, this is a quote that I read. It was actually from Scott Scanlon of IRI, and I found it to be quite, uh, quite impactful. Through 11/13 we've seen 19 straight weeks of growth in the Bev Elk space. Um, it's a bright end to a challenging year and again a sneak peek into what 2023 holds. Thank you all for your time and you enjoy Brewbound Live. Any questions?

Speaker 3 [11:29] I have a technical question. I still am a little unclear how Fintech takes supplier data and sort of like you're just like integrating it with the IRI data and spitting out. Just like basic basic comparisons on how they're performing versus how IRIs. Well, so

Speaker 2 [11:46] we IRI, right, so we ingest the feed from, from IRI and then we deliver it into the UI I showed and then it's a, a broad view of the category and then you can dive into competitive sets as well so we can look at down to the SKU level so you could look at all of your competitors by geography or drilling into the retail level. Does that answer your question? yeah, um, uh, yeah. I mean, the other, the other piece of it is our transactional data because we, as I mentioned, we do 1 in 3 Bevel transactions in the country and so it does allow us to kind of overlay some of those. Now keep in mind we're not like we have data governance as well, so we need to keep things masked, so we can't show the comp on that end of the transaction, but we could show internally for sure. Any other questions? Jeff, just,

Speaker 1 [12:38] just to confirm, you said a 3.2% year to date decline in the spirits category.

Speaker 2 [12:46] Spirits is showing growth overall as a category. However, if you back out RTDs, pre-mix cocktails in the spirits category, it's actually in decline.

Speaker 1 [12:55] OK, yeah. And do you, do you have any data on how much the RTD space is growing?

Speaker 2 [13:02] Uh, we do. I don't have it in this presentation, but we absolutely do, yeah, yeah, yeah. 11 note to look at his beer category is beer, um, seltzer specific. FMBs in the beer category are growing, seltzers are waning, we all know that, to a tune of about 300 million year to date. The odd thing of that is there's a delta of about 450 million because the seltz spirit centric seltzers are driving the growth in this direction. So you've got seltzer's hemorrhaging out this direction in the beer category, spirit's driving that, even though they're all lumped into kind of that RTD brand family if you will. Thank you very much for your time.