Josh McKinney
Sit down class, the business side of cider school is now in session.
Fortunately this class’s teacher, Josh McKinney, CEO and co-founder of Ekos, a US-based craft beverage software provider, doesn’t remind anyone of a high-school algebra teacher lofting a pointer at mind-numbing slides. Instead, he wants to see cider businesses grow and expand by doing things better, smarter and easier.
“We exist to help you all run your craft business better,” he said in his workshop. “We are well aware you don’t want to spend 10 hours behind your computer, so we try to make that easier for you.”
Unfortunately, craft cideries in the US haven’t been making things easier for themselves, according to a recent Ekos survey.
“In terms of tech adoption, craft beverage producers put themselves at B+,” he says. “Cideries, specifically, scored themselves as a C average.”
Marks like that aren’t going to get a cidery in with the cool kids. Although the data is US-based, it doesn’t take a psychology professor to see that Canadian producers are bound to be quite similar.
Fit is what makes the grade
Ekos offers software solutions, but there are plenty of options available including Canadian CraftMetrics and BC-based QUALO for domestic choices. However, choosing software based on whether it’s north or south of the 49th parallel is unwise. The right software is all about fit, flexibility and function, so comparing needs to options is essential.
“You need to find the best technology for you,” says McKinney. “Different software solutions that connect to all the parts of the business. We’re not talking about a cell phone, we’re not talking about a laptop… we’re talking about software.”
Business management software was seen as the top technology cideries couldn’t live without. Where this varied was in how software was viewed. Some felt using a spreadsheet was doing the trick.
Unfortunately, spreadsheets can’t integrate with payment systems, assist with quality control or make supply management easier. In a COVID-rattled world, people are purchasing cider differently and the right software solution can make sales and distribution a whole lot easier.
Know your sales channels
Direct-to-consumer sales increased exponentially during the pandemic, causing many cider operations to explore delivery, distribution and other ways to get product into hands and mouths. McKinney says, of survey respondents with an ecommerce platform, 81 per cent sell cider and 52 per cent sell merchandise; 72 per cent offer pickup and 72 per cent offer shipping. The majority (82 per cent) use a third-party distributor and 45 per cent do their own distribution.
It all points to complex interactions within many operations. If a third-party distributor is at the loading dock for pick-up, a team member is loading a direct delivery, a number of online customers are coming in for product pick-up and there’s walk-in traffic… well, it’s easy to see how things can get lost if data isn’t collectively captured.
“Please, please, please, keep track of all the people buying from you to get a feel for how you’re selling over time,” he says. “Most craft makers are still using manual methods. It gives me anxiety.”
If sales people have orders in their phones, the tasting room tracks orders on a pad by the phone and distributor orders are in emails, what happens if phones go missing or the notepad is accidentally thrown out? These aren’t good methods to record sales. Not only do you want to track all sales within one centralized tool for convenience, the aggregate data results in better decisions.
“Have all the information in one place,” he says. “Something you can track over time.”
Tracking permits a view of SKU trends: where they sell, how they sell and their future potential. For example, if a dry cherry flavour is selling by the keg, but individual bottle sales are falling off, you might remove it from the bottling line. A dry heritage apple blend is very popular in the tasting room but not at third-party liquor stores, so it may be something offered only to club members.
“It’s digging into your sales information,” says McKinney. “Data is your friend. What’s selling well, what’s not selling well, maybe even helps you be more efficient in the business.”
Staying competitive
Consumers are a fickle bunch. Like teenagers picking a prom date, they can’t stay consistent. They want something new. Cideries and other alcohol producers are up against numerous market offerings. Therefore, having an excellent product is just the start. There has to be a strategy to keep customers interested.
“Gen Z is getting a lot of disposable income,” he says. “How do you get that product in front of them?”
He recommends social media, but advises that the strategy that worked a year or two ago may not work today. Trends change regularly and need to be monitored and modified. Hiring someone, or bringing in a consultant or freelancer for online channels can help create some buzz while also improving a direct-to-consumer strategy.
Pricing plays a part in ongoing sales as well and this links back to the business software. One aspect of pricing is ensuring competitiveness, but understanding the costs of each SKU is definitely a pass/fail element. Without this information it’s impossible to know if money is coming in or trickling out. Understanding business margins gives the comfort to purchase a new tank or accept the need to make do for another year.
“Technology should be used to drive efficiencies in the business,” McKinney says. “You want to know what’s happening real time and know what’s happening in all the different parts of the organization.”
Class dismissed!