Recently, several leading beverage and beer brands discussed with me how to excel in the foodservice channel. Previously, their channel coverage was primarily direct-operated, but with shrinking consumer demand and rising labor costs, they now plan to explore a development model leveraging specialty channel distributors. Indeed, channel competitiveness stands out in the alcoholic beverage market as one of the three core competencies (brand product competitiveness, channel competitiveness, and consumer competitiveness). For example, in beer, years of monopolistic practices (buying outlets for exclusivity) have deprived many local brands of survival opportunities. However, a key point here is that while the cost of buying outlets is co-invested by manufacturers and distributors, the negotiation and communication with outlets are almost led or independently completed by distributors, highlighting the channel value of distributors. Especially in the foodservice channel, many restaurants often establish partnerships with specific category suppliers to enjoy the convenience of one-stop shopping and the most favorable prices. These suppliers offer a diverse range of products, including alcoholic beverages, soft drinks, condiments, grains and oils, vegetables, meat, and seafood. In addition to price advantages, some suppliers provide attractive credit terms to their clients. These suppliers have formed close cooperative relationships with outlets, and for manufacturers to intervene, they must break down these barriers. So, for manufacturers, how should they operate in the foodservice channel? AB-Class Restaurants Operate Like Hypermarkets The value of hypermarkets is not only in sales volume and profit but also in brand communication value, and the same applies to AB-class restaurants. AB-class restaurants and hypermarkets operate under nearly identical rules: 1. Contract signing for AB-class restaurants must be reciprocal. AB-class restaurants (including chains) differ from traditional channels in that cooperation terms are specific, there are many fee items, and various contract clauses firmly bind the behavior of manufacturers and distributors. Generally, two types of clients are favored: first, absolute first-tier brands that enhance their business level; second, brands that can offer more price discounts and bring more sales volume. Manufacturers must be well-versed in this, leveraging their brand characteristics to enter such channels with minimal resources and strive to become their popular cooperative brands. 2. Identify key decision-makers and maintain good relationships. Sales personnel accustomed to traditional channels often try to solve problems directly by approaching the boss, with less communication with lower-level employees. However, AB-class restaurants are typically managed by professional managers, with clear division of labor across departments, so every cooperative contact at each step is important (warehouse manager, operations manager, finance manager, cashier, procurement director, sales promoters, etc.). While maintaining relationships at every level, it is still essential to identify key personnel, which requires strong public relations and coordination skills. Common methods for relationship building: birthday gifts, care for children, entertainment vouchers, beauty cards, sauna cards, cash, sales commissions, small gifts, personal preferences, organizing activities, travel, helping solve daily work and life problems, regular and rhythmic visits or phone calls... Through emotional investment, seize opportunities to provide professional training to cooperative partners, frequently organize joint promotional activities with AB-class restaurants, strengthen communication and exchange, and solidify cooperative relationships. 3. Know your competitors; know yourself and know your enemy, and you will never be defeated. It is difficult to achieve exclusivity in AB-class restaurants, so in a multi-brand environment, to develop better, you need to be familiar with competitors. For example, product features, channel prices and profits, promotional activity schedules, etc. 4. Consumer activities and banquet promotion are the operational focus of AB-class restaurants. When sales in high-end hotels decline, manufacturers begin to adjust their operational focus: on one hand, they concentrate on activities, connecting with core consumers through various events; on the other hand, they strengthen sales efforts for hotel banquet orders. The driving effect of the banquet market is the best for creating a drinking atmosphere in the foodservice channel. After determining the operating model, match with distributors. What kind of distributors can effectively operate AB-class restaurants? 1. Match distributor capabilities and willingness. First is capability. Operating AB-class restaurants is not just about issuing a directive and providing a budget; it is essential to understand whether the distributor has the capability to operate such a channel. Professionals do professional work; essentially, it is about matching. If the distributor does not match the channel, there will be no good results. Second is willingness. Without the willingness to operate in this channel, there will also be no good results. 2. Have strong brands in the channel to leverage for implementation. Expanding and maintaining AB-class restaurants is difficult. If brand leverage can be achieved, it will be twice the result with half the effort. For example, if a distributor supplies a certain beer to a high-end restaurant, and that distributor is willing to operate your baijiu, then channel leverage is easily achieved. It is worth noting that brand leverage has underlying logic. For instance: How to achieve product portfolio? How to share grassroots promotion? How to design channel promotions? These require in-depth investigation and research. 3. Have mature organizational, strategic, and tactical systems. At the organizational level, a dedicated team must be formed. AB-class restaurants cannot be handled by part-time personnel; this does not improve efficiency but reduces it. Strategies must be specific and comprehensive, from product strategy to cost strategy to consumer strategy, all with complete implementation processes. Finally, at the tactical level, it should be close to the actual operations of AB-class restaurants, including cuisine types, membership systems, etc. 4. Master core large outlets and have corresponding sales growth strategies. This is an important topic. Not every AB-class restaurant has high sales potential, so the first step is to calculate the product sales capacity (customer acquisition capability and average transaction value). Next are specific implementation steps. This includes product portfolio design, display including stack planning, innovative promotion planning, publicity and momentum planning, scene construction and promoter planning, while also developing internal group buying business and O2O, etc. 5. Have the capability for brand communication and promotion within the foodservice channel. Brand communication in the foodservice channel is divided into two types. One is defined as hard advertising. For example, displaying more brand elements and product displays in restaurants, creating consumption scenes, etc. The other is defined as soft advertising. For example, combining restaurant anniversary events for promotions and experience marketing, and leveraging restaurant live streaming for product brand penetration. Brand communication is an important part of AB-class restaurant operations, and manufacturers must invest more effort here. C-Class Restaurants Operate Like Distribution Outlets C-class restaurants, also known as "fly restaurants" among salespeople, can be fully integrated into the route planning system of distribution salespeople. How to manage these outlets effectively? Just execute the eight characters: outlets, display, visits, and sell-through to the extreme. 1. Outlet Excellence. If you manage outlets well, business will not be poor. Achieving outlet excellence can satisfy both sales volume and brand building. Here's how:
Product strategy: Understand consumer needs, develop products that meet the needs of C-class restaurants, and ensure product differentiation and innovation. The core logic is that products match outlet attributes;
Channel management: Establish a stable distribution network, choose reliable distributors and retail partners, and ensure smooth and stable product flow;
Promotional activities: Regularly hold promotional activities, such as discounts, gifts, etc., to attract customers. Cooperate with C-class restaurants for joint marketing activities to increase product visibility and sales. 2. Display Excellence. Display is a direct way to show product value to consumers, and C-class restaurants also have significant space for display operations. Therefore, it is necessary to think carefully about "what" to display, "how many" , "where" , and "which side" to show customers. Two reminders here: First, design attractive display plans for the cashier counter and wine cabinet to make products easy to find and attract consumer attention in the restaurant. Consider product characteristics, target consumer groups, and the characteristics of the display area, place products reasonably, and use color and lighting effects to enhance product appeal in modern channels. Second, use as many vivid promotional materials as possible. Such as display racks, POP materials, posters, product labels, etc., to increase the attractiveness of product displays and information transmission. These materials can help highlight product features, promote sales, and guide consumer purchasing decisions. 3. Visit Excellence. The core of visit excellence includes two aspects: relationship excellence and service excellence. First, relationship excellence: salespeople can establish close relationships with C-class restaurants and provide personalized support and services. Proactive communication and cooperation help enhance the image and credibility of salespeople at terminal outlets, promote product sales, and increase market share. Second, service excellence: salespeople can provide exceptional service to C-class restaurants, meet customer needs, and enhance customer loyalty and satisfaction. At the same time, quality service helps improve product sales and brand image, gaining a competitive advantage in the market. Relationship and service are core elements of daily visits by frontline staff, and they are essentially complementary. Relationship excellence should emphasize differentiation and personalization, while service excellence should emphasize speed, attitude, and quality. 4. Sell-Through Excellence. To achieve sell-through excellence, the core elements to consider are brand excellence, experience excellence, and shelf-life excellence. First, brand excellence: salespeople can comprehensively enhance brand image and influence. Focusing on product knowledge, building good customer relationships, executing integrated marketing strategies, and providing excellent after-sales service are all important factors in achieving brand excellence. Second, experience excellence: implement excellent tasting and sampling processes, actively listen to consumer feedback and opinions, and continuously innovate and improve. Then, shelf-life excellence: with increasing consumer health awareness, fresh shelf life is gradually becoming one of the core competitiveness of FMCG manufacturers. Shelf life is not just about meeting expiration date constraints; it is more about optimizing the supply chain system to achieve the best product freshness. The above four excellences, some distributors may be able to imitate and apply, but the results vary greatly. What is the reason? This involves the issue of "Dao" and "Shu". "Dao" refers to the implementation path chosen by an enterprise to achieve its marketing goals, including strategic aspects and the matching corporate culture.
"Shu" refers to the specific strategies and techniques adopted in actual operations to achieve the goals of "Dao". Processes and systems are cold, but execution must have warmth. To achieve the four excellences, it is necessary to achieve the interdependence of "Dao" and "Shu". Dao provides guidance and goals for Shu, while Shu is the specific means to realize Dao. Without clear Dao, Shu loses direction and goals; without effective Shu, Dao is just a castle in the air and cannot be realized.