The Importance of Accurate Sales Forecasting in the Beer Industry: Why Sales to Retailers Matter
When it comes to selling more beer, it’s not just about buying more hops. It’s about understanding your future demand. Imagine if you knew exactly how much product you would be selling three months from now. How would your procurement strategy change? Would you adjust your production schedule? Would you increase or decrease the amount of raw materials on your next purchase order?
To take the guesswork out of ordering and create more transparency within your brewery, try forecasting. While it may sound intimidating, forecasting is actually quite simple when you break it down. By combining your knowledge of past sales with your team’s knowledge of upcoming events, you can accurately predict future sales and brew more efficiently, saving time and resources.
By accurately forecasting future sales, you can confidently work backwards to plan your production schedule, purchase the right amount of materials, and procure the necessary ingredients. This will allow you to fulfill more orders, keep your beer fresh, and ultimately, make more sales.
How Raw Material Planning Connects to Your Distributors Out of Stock Rate
Raw material shortages can impact your out of stock rate by causing a misalignment between demand and supply. If you do not have access to the necessary raw materials to meet the demand for your beer, you may run out of stock and be unable to fulfill orders. This can lead to lost sales and decreased profitability for your brewery. To avoid out of stock situations, it is important for you to accurately forecast future demand and plan your production and procurement accordingly. This includes forecasting sales to retailers, as this provides the most accurate data on consumer demand.
Do I Forecast Orders to Distributors or Sales to Retailers?
It is important to base sales forecasting on the sales numbers that are closest to the point of end consumption because this provides the most accurate and relevant data for predicting future demand. This is especially true in the beer industry, where sales to retailers (STRs) are a key indicator of consumer demand.
When forecasting sales, it’s important to consider the entire supply chain, from production to distribution to retail. However, sales numbers at the retail level are the most directly influenced by consumer demand and can provide valuable insights into future sales trends.
For example, if you are a brewery and you are forecasting sales for the next quarter, it is more useful to base your forecasts on actual sales data from retailers rather than, say, orders shipped to distributors. Retailers are the final step in the supply chain before the end consumer, and their sales data will be more reflective of actual demand.
Basing your sales forecasting on sales numbers that are closest to the point of end consumption (in the beer industry, this is STRs) is important because it provides the most accurate and relevant data for predicting future demand. This can help you make informed, data-driven decisions about your production and sales strategies.
How Often Do You Update Your STR Forecasts?
Are you tired of spending countless hours manually creating STR forecasts that are often incomplete and error-prone? Do you find that this time-consuming process takes away from your ability to focus on higher-level, value-added tasks that drive growth and profitability?
Creating your own forecasts manually can be a time-consuming and error-prone process, especially if you are relying on outdated or incomplete data. This can waste valuable time that could be better spent on making value-added decisions that are critical to the success of your business.
Managers are paid to make strategic decisions that drive growth and profitability, and having accurate, up-to-date forecasts is essential for this. When you are spending hours or even days creating your own forecasts, you may not have the time or resources to focus on these higher-level tasks.
In addition to being time-consuming, manually creating forecasts can also lead to a lack of consistency and accuracy. If you are not updating your forecasts often enough, you may be basing your decisions on outdated or incomplete data, which can lead to poor outcomes.
To avoid these issues, it is important to invest in a forecasting system that can automatically generate accurate, up-to-date forecasts based on real-time sales data. This will free up your time and resources to focus on value-added tasks and make more informed, data-driven decisions.
Cost of Being Out of Stock
Many breweries who are not using Craft Portal’s technologies may be experiencing high out-of-stock rates at their distributors, which can impact their sales and profitability. Out-of-stock situations can occur when there is a misalignment between demand and supply, and they can be costly for breweries as they may miss out on sales opportunities.
According to our internal estimates, out-of-stock rates for breweries can range from 10% to 25% or more, depending on various factors such as the stability of demand, the accuracy of forecasting, and the efficiency of the production and distribution processes.
If a brewery is able to reduce its out-of-stock rates by even 50%, it will have a significant impact on its sales and growth. By having the right amount of beer on hand to meet demand, a brewery can ensure that its distributors are able to fulfill orders and keep its retailers stocked. This can help the brewery capture more sales and drive growth, as retailers and consumers are more likely to continue buying from a brewery that is able to consistently meet their needs.
Reducing out-of-stock rates is an achievable goal, and it can be achieved by using technologies like those offered by Craft Portal to optimize production and distribution processes and improve forecasting accuracy. By leveraging data and tools to better align supply and demand, a brewery can increase its sales and drive growth. Every dollar matters in this competitive industry, and every sale counts. By focusing on capturing every sale possible, a brewery manager can drive success and profitability for their business.
Make it Automatic With Craft Portal
Craft Portal offers a range of technologies that can help you keep your forecasts updated on a weekly basis, using actual sales data from your distributors. Here’s how it works:
First, our system integrates with your distributor’s sales reporting system, allowing us to automatically collect sales data from your distributors. This data is then analyzed and used to create weekly forecasts that predict future sales trends.
Using these forecasts, you can make informed decisions about your production schedule, purchasing materials, and procuring ingredients. By staying up-to-date with your distributor sales data, you can ensure that you always have the right amount of beer on hand to meet demand, without overstocking or running out.
In addition to providing you with accurate sales forecasts, Craft Portal also offers tools to help you optimize your production process and streamline your operations. With our system, you can easily track inventory levels at your distributors, schedule orders, and manage your supply chain.
Overall, Craft Portal’s technology is designed to help you make smarter, data-driven decisions about your brewery’s operations. By keeping your forecasts updated weekly with actual sales data from your distributors, you can ensure that you always have the right amount of beer on hand to meet demand and keep your customers happy.
Focus on Selling More Beer
Forecasting demand in the beer industry can be a time-consuming and complex task. By using Craft Portal’s with your distributor sales data, you can leverage your existing data to make more accurate and informed forecasting decisions. This will allow you to focus on what matters most – selling more beer – rather than spending your time creating and analyzing data. Leave the forecasting creation to the professionals at Craft Portal and start reaping the benefits of better, data-driven decision-making today.
Don’t let outdated or incomplete data hold you back. Reach out to Craft Portal today to review your forecasting process and learn more about how their data and insights can help you increase your sales and profitability. By reviewing your current forecasting process with Craft Portal, you can gain a better understanding of your out-of-stock rate and how using Craft Portal data can help grow your profits.