Being able to accurately track inventory is an important part of business in many industries. Beverage alcohol presents its own challenges, especially considering the current state of the industry.
Organizations that increased inventory to compensate for world events were left with too much stock when consumer buying habits shifted and supply returned to normal. Here’s where the industry stands as a whole, and how data can help your organization get a more accurate read of inventory.
The state of the industry
According to data from IWSR, total beverage alcohol (TBA) volumes in the United States decreased in 2023, with declines in spirit sales for the first time in nearly 30 years, as well as declines in wine and beer. Among the factors IWSR says are contributing to the decline are economic pressures on consumers, an increased focus on health and moderation by consumers, and imbalanced inventories.
“High inventory levels are expected to persist into 2024 and potentially beyond, with normalization now not expected until 2025 or early 2026,” said Marten Lodewijks, President of the U.S. Division at IWSR. “Consumer demand will have to increase in order to facilitate the movement of stock through the distribution chain.”
From late 2019 through 2023, the pandemic followed by supply chain disruptions led to inventory surges that have beverage alcohol companies scrambling to correct.
Data’s role in inventory management
The IWSR report sees opportunity for growth in the coming years. In order for organizations to take advantage of that growth, they will need to rely on data. When it comes to maintaining appropriate inventory, data is an important part of that decision-making process as well.
In Utah, a recent audit was presented to lawmakers showing that the state could save millions of dollars in waste by updating the inventory management system at state-owned liquor stores. That’s because inaccurate forecasts can lead to:
- Lost sales
- Increased holding costs
- Potential product spoilage
Utah is discovering what many other businesses have known: inventory management and forecasting can be an overwhelming task without data analytics.
How Dimensional Insight can help
The best analytics solutions provide real-time data to the people who need it so that accurate information is being used at all times to improve inventory turns. Dimensional Insight’s Inventory Advisor allows distributors to track data such as:
- Inventory: If inventory levels are inaccurate, customers could be ordering items that are not in stock that they think are stocked, or being told items are not in stock that actually are there. Either way, a customer is left unhappy, and the inaccurate data affects other numbers in the system.
- Carrying costs: Tracking carrying costs, the cost of holding goods in stock, can help balance inventory levels, ensuring that orders can be filled without paying too much in storage costs. An organization needs to decide what an acceptable level is for them, and the carrying cost percentage is available at the click of a button in Inventory Advisor.
- Dead stock: Keeping dead stock—merchandise removed from a sale before it could be sold—increases carrying cost because it isn’t going anywhere unless action is taken. Inventory Advisor provides a percentage of dead stock that allows decision-makers to figure out how they want to move these products so they can replace them with items that will sell.
Dimensional Insight allows customers to dive into the numbers on these charts and others to get even more detail. Up-to-the-minute information allows organizations not only to stay on top of existing inventory, but to also make informed decisions about trends and what may happen in the future to make sure they are not overstocking, and paying too much for storage, or having too little product to satisfy customers.
With the fluctuations in consumer demand, it is imperative that organizations incorporate real-time inventory visibility into their decision-making. Any discrepancies can be costly, whether that’s knowing what’s in stock or in planning for the future.
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