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Tamarron results are in, but we don’t have any big winners to single out this go ’round.

Nope, instead of conducting the typical survey, in which distributors rank suppliers on a variety of topics, Tamarron changed things up this year to “focus on supplier/brewer adaptation and execution during the Covid-19 era.”

The survey was conducted over June 2020, and received responses from 132 distributors, many of those being “top/mega distributors.” 

The questions to distribs focused on a “reduced set” of six key suppliers – Anheuser-Busch, Boston Beer, Constellation, Heineken USA, Molson Coors and Sierra Nevada – and asked them to rate the suppliers with each query a scale of “Consistently, Often, Sometimes, Rarely, Never” to “better identify the consistency with which brewer leadership, sales and supply chain teams demonstrate the desired business traits.”

We’re not going to dive into all the results, but we’ll bring you the highs and lows, and other interesting tidbits from the other side of the aisle (more on the supplier side in story below).

WHERE BREWERS HAVE BEEN CONSISTENT. The most consistent behavior seen from suppliers over the COVID era, according to distribs, were “policies for anticipated out-of-code on-premise kegs” – i.e. the suppliers have “clearly communicated policies for handling anticipated out-of-code kegs, including extended code dates on kegs, collecting out-of-code packages from on premise/venues, recommended decanting procedures, keg return logistics, etc.”

The survey notes that distributors also handed out favorable tallies to brewers for their management of “brewer organizational changes” as well as “marketing & media re-allocation” – “a nod to quick re-tooling of advertising & social media campaigns, messaging and spending,” per survey. 

WHERE THEY HAVE WORK TO DO. The “least consistent” behavior demonstrated by suppliers over the COVID time frame dealt with “enhancing revenue/offsetting losses” meaning there have been little “discussions to generate ideas to help distributors enhance revenue streams/margins and offset losses.”

Distributors also “looked less favorably upon brewers for their ability to ‘capitalize on E- commerce trends,’” according to the results.

Communication to distributors “remains a big opportunity/area of concern,” per results. Then “supply chain transparency, production and flexibility,” were listed as other opportunity areas for suppliers as well.

AND THE MOST FASCINATING FINDINGS. But perhaps, some of the most fascinating takeaways from this year’s survey came when Tamarron asked distributors about their various responses to COVID, and what kind of lasting damage they foresee to some of their on-premise accounts.
When asked about organizational changes in response to COVID…
 

• A little over 80% (108 distribs) indicated that they re-purposed their on-premise team.
• More than half (70 distribs) said they “implemented or increased usage of online ordering”
• A little under a half (58 distribs) said they started “retail customer automate payments” 
• A third (44 distribs) said they enforced “mandatory temperature checks”
• And just under 20% (24 distribs) said they had to make a “reduction” to their workforce

• 40% of distributors said they expect less than 10% of their on-premise clients to close for good
• 35% of distributors believed it to be somewhere in the 11%-20% range
• 21% of distributors thought it could end up being between 21%-30%
• And 4% of distributors anticipated more than 30% of their on-premise accounts closing 

Continuing the previous story on Tamarron’s COVID-time survey: they also conducted a suppliers-side rating of distributors’ performance and “adaptability” during COVID. 

The main consensus here: “Overall, distributors have done a phenomenal job of adapting to the COVID 19 challenges in the following areas: establishing and adhering to safety protocols for their employees and customers; adapting service levels for off premise customers; and staying up to date on the evolving regulations, restrictions and re opening strategies of their local territories.”

Distributors’ strongest suit, it seemed, was “on public health and safety precautions,” where they scored “overwhelmingly” and “extremely high.”

Notably, 94% of suppliers also said the vast majority of their network was adapting service levels admirably for off-premise customers, by things like shifting personnel and efforts to keep high velocity skus (and shelves) stocked. 

Distributors also largely scored well in certain types of communication, particularly sales and operations communication, with “nearly 80% of supplier responses acknowledging that more than 75% of their networks were consistently performing well” there. 

Wholesalers scored just slightly lower than that on their ability to “[re-establish] service to on premise, making temporary organization changes and adjusting short term objectives.” 

“The least consistent behavior related to servicing accounts on E commerce platforms.”

ALIGNMENTS/MISALIGNMENTS. The survey then cross-referenced the distributor and supplier responses to determine where both parties could do better, and where they seemed to be “misaligned” in efforts. 

ALIGNED “OPPORTUNITIES” where both could do better:
-“Enhancing revenue / offsetting losses,” or how the tiers are working together to develop plans to make up for lost revenue or increased costs. 
“Keg reimbursements and co-op funds may be considered here.”
-“Capitalizing on E-Commerce trends was the 2nd lowest scoring question for brewers and the lowest for distributors.”
And “last, but certainly not least, is the opportunity around inventory management – production, forecasting, ordering, etc.”
Both also scored in the lower levels for re-establishing the on premise. 

MISALIGNMENTS. As for areas where performance is misaligned: 
Regarding handling out-of-code on premise kegs: “Brewers received their highest score, while the distributor score was ranked 13th with only 65% of responses indicating that 75% of the networks were doing this consistently.”
“Relative to strategy & support communication at the leadership levels, brewers also outscored distributors – the brewer score ranked 4th among all questions, while the distributor score ranked 12th.”
Finally, “while distributors excelled at adapting off-premise service levels, brewers were slower to adapt their priorities in the off-premise. This question ranked 2nd for distributors and 9th for brewers.”

While distribs gave top supplier partners – AB, MC, Constellation, HUSA, Boston Beer, Sierra Nevada – top marks for proactive approach toward out-of-code beer reimbursement, many still felt suppliers could be doing more to help enhance revs and offset losses due to temporary closures of on-premise, latest Tamarron Survey on Covid-19 period shows. Part of offsetting losses also has to do with “ongoing” evaluation of keg reimbursements, as “many” distribs indicated reimbursements were “insufficient to cover their costs,” also asking for “reduce[d] co-op spending and inefficient marketing spending.”  At same time, brewers also received best grades on making accommodations for temporary workforce reductions and ability to shift marketing messages “to be relevant to consumers in COVID-19 era.” But communication “across most supplier functions,” supply chain “transparency,” production and “flexibility” and “understand[ing] and adapt[ing] to the new normal at local levels” were other oppys for improvement. Among lengthy list of recommendations, distribs seek better communication from both senior leadership and local teams on adapted 2020 and 2021 plans as well as supply availability, learnings from other mkts and more.

Tamarron surveyed 132 distribs of all shapes and sizes. About half of ’em were under $75 mil in annual revs and the other half over $75 mil, including 25% between $25-50 mil and 21% between $75-$150 mil, 17% less than $25 mil, 15% between $150-300 mil, 13% over $300 mil, and 9% between $50 and $75 mil.

E-Commerce is Biggest Oppy for Improvement, Sez Suppliers; Inventory Mgmt a Two-Way Street Suppliers highlighted ability to service e-commerce platforms as biggest area for improvement among distrib networks, via separate Tamarron survey of suppliers conducted in Jun. Just 29% of suppliers felt their distrib networks were mostly (75+%) “aware of accounts that participate in their own or third-party e-Commerce applications and has ramped up efforts to ensure accounts have sufficient service and inventory to accommodate growth of e-Commerce during the COVID-19.” Separately, just 38% of suppliers felt most of their distrib networks adequately “increased usage of automated services with customers without impacting their overall service to customers (e.g. automated payments, online ordering, remote/video sales calls, etc.)” And suppliers rated distribs’ inventory forecasting among one of the lower-scored areas as well, with just 56% of suppliers saying that “at least 75% of their networks” have “effectively adjusted and clearly communicated…forecasting and logistics strategy to account for” Covid-19 impact.

Over Half of Distribs Expect Anywhere from 11-30+% of On-Prem Accounts to “Permanently” Close While 40% of 132 distribs expect less than 10% of on-premise accounts in their mkts to close permanently, remaining 60% expect anywhere from 11-30+%, Tamarron showed. About 35% of distrib respondents expect between 11-20% accounts to close permanently, 21% of distribs expect 21-30% permanently closed and just a handful of distribs (4%) expect over 30% of on-premise accounts in their mkt to permanently close.