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Depletions: The Activity That Should Matter The Most


I wanted to write about the subject of Depletion and why that is the most important metric a brand owner needs to keep in mind.

I was new to the drinks business when I started my own wine brand around 2006. At that time while I was cold calling bottle shops around the Delaware, Maryland, and New Jersey area, and at that time I understood how important it was to have a sell thru, aka depletion from retail.

You can love your brand and create all the hype of getting press coverage, fundraising, and new placements - but if the brand is not moving from the shelf, you have a problem. And that is the business we are in. A lot of entrepreneurs shy away from that problem. By all means, even though I loved my brand and believed in it but when I sold it to a bottle shop, for them it was just another SKU from their 4000 SKUs that needed to move and move fast.

While I was working with mainly small distributors, they did not have a system to measure depletion ratios from their retail customers. They also could not send me depletion reports. But when I started working with big distributors like Glazers, RNDC, and Budweiser distributors, I got some professional reports and one of the reports was called the monthly depletion report.

The report told you how many cases got depleted from the wholesaler's inventory to which retailers and how the repeat business of retailers was going. Which SKUs were moving and which were not moving at retail and wholesale?

The report tells you retailers where your products are not moving so you can go and help them move, the top retail customers that you need to go and visit and say thank you and discuss a floor stack deal. Basically, it's an important set of data on your retail customer's performance on your brands. What you do with it is important.


So let's break all this for you here. 

What Is Depletion?

In this context, we define depletion as units sold at retail to the end consumer, e.g. how much of your wine, beer or spirits was actually sold from the retailer to its customer. Depletions can be calculated in total cases, full bottles, and depletion rate (quantity vs days), depletion unit breakdowns. 

How to Approach Depletion

Your strategy should be focused on the depletion of your stock from the retailer – not from your importer, not from your distributor, but from the retailer.

Some actions you can take to achieve this goal are:

- I would encourage suppliers to step out of the office (winery/brewery/distillery) and spend as much time as they can to make sure that their brand is moving at the retail level. Support your distributor to ensure that the brand moves well during the launch phase. Build a follow-up program to ensure that the numbers are going up (for at least the first 6 months).

- If you focus on how your brands are performing at the retail level and work with your distributor and import partners in your launch months, it will help you build your brand more effectively. The market feedback that you will gather will help you educate your own team and prepare you for your next distributor call when you can show them why your brand works.

- New suppliers often see their distributors as one-time customers and do not care much after the first PO. What is important is to be long-sighted and see the 3rd PO from your wholesaler. In the real world, most brands only get one chance to be in front of a retailer or on a retailer’s shelves. As a brand owner, you want to make sure that chance is fully capitalized.

- An effective way to deplete your brand at the retail level is to host in-store tastings.

- Point of Sale: You may feel that this is an overhead, but selling never stops. Once your brands are in stores, you have to worry about how you can move them. Your retailers must sell through. Small things like case cards and shelf talkers help and colored cartons go a long way. It also makes it easy for retailers to locate your brand in their storage stockpiles.

- Creating secondary displays is an important profit center for small companies. For example, find new spots like the refrigerator. If you have whites, put them there.

- Floor Displays: Creating secondary displays is essential to profit centers for small companies. Floor Displays are one of the most effective retail merchandising strategies available for showcasing your brand.

- Ask your distributor for a depletion report. Analyse this report and pick out some non-performing stores to understand why the product is not working for them, and if you can hold tastings to help them push sales. Ask top-performing retailers for store displays to maximize sales opportunities here.

- Signage and Guiding the Customer Journey: Use floor decals if retailers allow you. The best signage, of course, doesn’t just help customers find what they’re looking for but also inspires them to want something they never knew they needed.

- Creating urgency: Create incentives around the sales reps, retailers, and retailers’ sales staff. Create incentives on depletion rates. For example, reward them if they move x number of wine cases in y days.

- Say Hello to the retailer in person: Go out on the road alone and say to the retailer “I wanted to thank you for stocking my wine.” This does go a long way. If they had a choice, they would always recommend your wine as you are the likable supplier.

I would like to end by reiterating that nothing will happen if you don’t have a culture of depletion. Focus on depletion at retail, with your distributors, with your sales reps, and you will build long-term repeat business for your wine, beer, or spirits brand.