Beverage brands should treat slow-moving inventory like retailers treat unsold seasonal stock. After 180 days with no sales, run tastings or promotions. If nothing sells after a year, dump it and free up your cash instead of paying storage costs forever.
Chapters
I just had an interesting conversation with my friend Wayne Latomski, and we were talking about the uncertainty in the business world right now. But I shared with him a little story about clothes and how it relates to the business in general, but in the beverage business. When do you buy your winter clothes? You buy them in the spring. When do you buy your spring clothes? You buy them in the summer. And when do you buy your summer clothes? You buy them in the fall. And when do you buy your fall clothes? You buy them in the winter. Here's the point. Brands are trying to hold on in the beverage business to things that aren't moving. At some point, you have sunk cost. If that item isn't moving at a certain time frame, I like to call it— you start looking at dead and slow-moving inventory at about 180 days. That's when you either have to take action and put something in place, like a tasting, a couponing event, a bar buyback, or something to get that thing moving. Because at 365 days, you've already sunk your costs in holding that product on the shelf or in the warehouse or distributor. You've already paid for that inventory. So you need to make that cash work for you. You got to let it go. So anyway, I thought it was an interesting conversation about the decisions you have to make on brands that are not moving. And take a lesson from the clothing industry.
