#1 Tip For How to Get Your Brewery or Distillery to Successfully Start a Smart Buying Program
October 3, 2024
How do I get started?
It’s the #1 question the Beverage Federation gets asked when we start talking to a brewery or distillery about Smart Buying. Our response is sometimes met with one of surprise or a shrug on stating the obvious, but it’s so often where small businesses fail to act.
YOU READY?
The biggest tip we provide is to start by segmenting out some TIME in your week to work on smart buying. Diving into purchasing is complicated and takes a quiet space and time to get started. It isn’t something you should try to multitask on while jumping back and forth to the brewing floor to check on staff or on a brewing day.
TIME!
It’s not groundbreaking, but best practices are usually not something that is going to make you fall off your chair. It helps set expectations. This is going to be something new for many brewery owners and because it’s new, it’s going to take time and it’s going to be challenging. So, we recommend eating the elephant one day at a time and not all at once. Start with an hour a week that you set aside for smart buying or purchasing strategy. This is different than when you sit down to order malt or call your representative for more tap handles. This is creating a playbook that you can use to improve your business purchasing operations. It is critical to creating repeatable cost savings measures.
The First Hour of Smart Buying:
Find a quiet place to get started.
Week 1 Outline: I.e. Monday 1PM - 2PM,Focus on your smart buying strategy NOT each tasks right now.
Create a excel sheet or google sheet and label it “Purchasing Playbook”
Outline a ‘Top 3’ list for suppliers by spend annually in each category
3 Largest ( i.e. cans/malt/hops)
3 Middle (no wrong answers - just pick 3 that make up a significant amount of spend throughout the year)
3 Lower (again, no wrong answer - just start somewhere)
Create a list of purchasing activities, most likely things you are not doing today or you could improve upon. Start with 1 - 2 for this month.
For example:
Request 3 quotes on next order over $5K
Run our first ‘Request for Proposal' (RFP), or suggest a barter with a local supply partner vs payment.
Ask your accountant what is entered into your books from an invoice, is it the total sum or is shipping broken out. This gives you areas to focus on in the future.
Start a tab in your excel sheet that identifies “procurement unknowns”. This is a category of things you pay for, but don’t have a lot of insight into and/or feel like you don't have a lot of control over. You can come back to this in the future as areas to find efficiencies/savings, but it all starts with a list of what you are diving into and when. For example: lease, utilities, POS fees, etc.
Ok, get it on the calendar and you have just created 52 hours of Smart Buying for the year!
It won't happen overnight - but it's the best first step in creating a new process to track your progress.
This will help you start to work on a playbook, develop reports to help you understand where you are, and then where you want to go. Most importantly it will help you track the impact month over month so you can see that with effort, your costs in certain categories will go down over time. All while maintaining or increasing production levels. Most importantly, you don’t need to sacrifice quality in order to save money.
Good luck, keep at it, and always feel free to reach out with questions or if you are in need of resources. We have low cost/no costs resources we are always happy to share and hopefully it will help you run leaner in 2025. For best contact email: dan@beveragefederation.com or if you are looking to become a Beverage Federation member and start saving annually today, request a demo with Dan and we can quickly walk through how are volume contracts could be a tool to use when it comes time to purchase.
