Using Analytics to Manage Beverage Alcohol SKU Proliferation

by | Sep 10, 2024 | Wine & Spirits

Reading Time: 4 minutes

When you offer more products, your business becomes more complex. That may be putting it too simply, but the general idea is true for businesses in many industries. For beverage alcohol distributors, there is a unique level of complexity that comes along with the rapid growth of SKUs.

Just because the business becomes more complex, though, doesn’t mean all of your work has to along with it. The right analytics solution can help you keep pace with the increasing number of products an organization needs to offer to be competitive. Here’s where the beverage alcohol industry stands, and how data can help.

The state of the industry

There are many factors contributing to the proliferation of SKUs. One of the main reasons is changing consumer preferences. According to IWSR data, there is an increased focus on health and moderation by consumers. This has led to imbalanced inventories featuring the beverages that are being sold less, such as spirits, wine, and beer, and the products like RTDs that are becoming increasingly popular.

“Consumer behavior in the U.S. is shifting in a way unseen in previous generations,” the IWSR reports. “Younger [legal drinking age] adults are increasingly prioritizing health and wellness, moderating their consumption of alcohol or abstaining altogether. While this is driving down alcohol consumption, it is also fueling interest in certain segments, and particularly those aligned with moderation and wellness trends, such as no- and low-alcohol, low-sugar, and low-calorie.”

 

 

Data’s role

The rapid growth of SKUs has certainly increased complexity for beverage alcohol distributors. The vast array of products would be a challenge by itself, but when you factor in other considerations like the different packaging, storing, and handling requirements, the difficulties begin to layer on top of one another. Warehouse capacity and inventory management are among the areas that require an increased focus to make sure nothing is overlooked.

As is usually the case, analytics can play a role in decision-making. Operations executives have to figure out how to optimize warehouse layouts and handling systems to maximize efficiency, space utilization, and throughput. Using pertinent data can make all of this much easier.

How Dimensional Insight can help

Dimensional Insight has the right technology combined with industry expertise to allow organizations to manage SKU proliferation and complexity. As the analytics leader in the beverage alcohol industry, Dimensional Insight offers a variety of products that can give your business insights to turn the challenge into opportunity:

  • Distributor Advisor has warehouse optimization features that provide advanced analytics to optimize warehouse layout, slotting, and picking paths based on product characteristics and velocity. This allows for improved efficiency and throughput.
  • Inventory Advisor helps manage the complexity of diverse SKUs by optimizing stock levels and avoiding overstocking.
  • Diver Gateway Platform can flag potential issues such as inventory discrepancies with real-time alerts, allowing for quick corrective action.

 

 

In order to keep pace with the changing beverage landscape, it is imperative for businesses to offer a more diverse array of products. While in theory this makes some aspects of inventory management more difficult, taking the right approach to data can actually make it easier.

One of the most important aspects of an analytics solution is its flexibility. Organizations don’t want to limit themselves to a product geared towards solving just one operational problem. Others will crop up, and when that happens it is too costly to go out and find another solution. The best analytics solutions aren’t just geared for the problems your organization might be experiencing right now. Dimensional Insight can provide the information you need to make decisions about the issues you are facing today, and its products are designed so that they are ready for the next challenge your organization may face.

John Sucich
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