Technology and the Adult Beverage World

Sad to say that as I age I see more things change in our business. The change is not sad, but rather that I am aging. I distinctly remember the times when, in our off premise world, a phone would ring, we would pick up that rotary black box, hand write an order on a note pad, fill that order from the triplicate copied paper and call master card for approval or worse, slide the metal card copier right to left for a record. That was retail alcohol selling as recently as 1994.

When I went from seller of beverages to consultant for the industry, we were taking orders on iPads, our customers were tweeting their desires to our various departments, and some iPhone App would deliver the goods within one hour.

Technology has a way of really advancing our business for better or for worse, and our adult beverage industry is always slow to respond and adapt.

Being a part of a business that has roots in prohibition and is notorious for having 2+ generations in management means that change is slow, trust is hard to come by, and adaptation of technology is rare.

I want to share three concepts that I am aware of that will impact both on and off premise retail and should be on your radar. Only you can decide your adoption timeline, but it is always critical to be aware of the world and change that is around and en route.

Restaurant wine/beer/spirits list on tablet

Uncorkd is a company that is changing the way we educate ourselves at a restaurant or winery.

Historically when dining out we were handed two menus; one food and one drink. The associated, behind the scenes costs, are rather high. There is constant printing of the menus depending on 86’d items, the cost of time taken, vintage changes or the mixologist desires.

There is still a major diner intimidation of wine lists, and studies show that they continually order the 3^rd item from the top for a glass pour. Not too expensive and shows minimal thought.

This App, developed in Chicago, arguably a restaurant hot bed, is showing incredible adoption from the restaurant community. What they are seeing is a 20% increase in glass sales, and an increase in bottle sales for restaurants using the application.

The diner is less intimidated and with the app showing reviews, and ratings, the diner feels more empowered to make good wine decisions. Adoption is quickly becoming the norm, and I am seeing this product and others like it in white table cloth restaurants all over America.

Square and other credit card readers

Again, I need to harken back to my old retail days of separating carbons on Sunday’s as my father and I watched football. The hard copies went to the bank for charging and the soft copies went to our back office at Sam’s Wines in Chicago. The carbon ended up all over our floor at home and on my hands.

Smart credit card readers are such a wonderful idea and continue to neuter the big interchange fees that hinder small business and lock the retailer into crazy agreements. Further to that point, the adult beverage business, being so regulated, has given master card, visa, amex, etc. the leg room to charge more than a non alcohol transaction because, (their words), the high propensity of fraud charging and stolen credit card numbers.

So if our guest is charging $20.00 for a bottle of vodka and we have a 20% gross margin to be competitive, then the credit card companies will take an additional 3.5% from our gross margin in fees.

Hardly seems fair, and Square and others like them, fix the fee, make the whole transaction electronic, make record keeping easy, and it can all be done from your phone! Now that is progress with a bottom line benefit for us all.

Smartphone Apps

Alcohoot is a company that has created a best in class smartphone (iPhone/ Android) Breathalyzer. The reach is broad and relevancy is large in our adult beverage world. If we are in the supplier and distribution world, our job in part is to entertain and use what we are selling. If we work for Chandon then it is our role to be on the street selling, marketing, and promoting our wine. What better way to ensure social responsibility and safety by always knowing our levels of sobriety?

As a CEO I would think and promote that my employees were always smart and safe while also enjoying the wines we were producing. If I were a restaurateur or bar owner I would always want to know that customers leaving my establishment were always in proper mindset to be on the streets. That is the same for any retailer that wants to sell safety to the client base. Having an easy way to know your awareness level is critical to good selling and being a responsible steward of the adult beverage business.

Those are three technologies that 10 years ago did not exist and now are changing the way we buy, sell, and consume adult beverages. And it shows that our industry is top notch in technology adoption, and that we have moved past the stone ages in how we face the consumer market.