SipSource Market Experts Provide Cases for Using SipSource Data

Feb 01, 2024
Leveraging strategic data to help you make critical business decisions.


It’s one thing to have data, but it’s another thing entirely to know how to use it productively. During a breakout session at Access LIVE in Las Vegas, Nevada, SipSource Analysts Danny Brager and Dale Stratton were joined by Kearney’s Michael Ooms for an enlightening tutorial featuring use-case scenarios for SipSource information.


During the session, “SipSource: Strategic Business Applications,” Brager, Stratton and Ooms gave concrete tips that can be used by SipSource subscribers and wholesaler data contributors to help with forecasting and other strategic decision-making.


WSWA’s SipSource is the most reliable source covering the complete three-tier channel of distribution for wine and spirits. The information in SipSource reporting is actual depletion data — not projections or samples —it’s accurate, verified and concrete. The reports track volume for over 70,000 wine items and 46,000 spirits items from wholesalers to retailers across the country. Some of the attributes tracked in the reporting include product class and segments, price tiers, origin (domestic/import), on- and off-premise, chain vs. independent and multiple geographical breakdowns. Moreover, the data is collected, processed, aggregated and reported within a month, so you know it’s not outdated by the time it reaches you.


Some of the most valuable use cases included sizing product segments, assessing growth rates relative to portfolio, and adapting channel strategies to match actual depletions. 


Sizing Product Segments

One big challenge faced by wholesalers and retailers alike is the question of product segmentation. If you’re selling wine to customers, it’s not enough to say you want to buy X cases in the next quarter — you also need to know how many cases by product class, geography and channel.


For example, SipSource breaks down table wine into price tiers that shows how many nine-liter cases were sold last year in the various segments: under $8.00, $8.00–$10.99, $11.00–$14.99, $15.00–$24.99, and $25.00 and above. Similarly, it’s not enough to project how many cases of rum or tequila you need to purchase. Is it traditional (white) rum, spiced or flavored? Is the tequila silver, reposado, añejo, mezcal, or some other variety? What size package do customers prefer in your area? What’s the right price point?


By looking at trends for these granular categories and segments and comparing them to their sales/ordering patterns, SipSource subscribers can make informed decisions about how much of each product type to order.


Assessing Portfolio Growth Rates

SipSource isn’t just about depletion data; it’s also about projections. The analysts at SipSource rely on years of data to show how various products and product segments have done in various regions/markets and channels. This same information allows them to project how those same products and segments will do in the coming year.


Not all retailers buy and sell all categories of wine and/or spirits, and some get different product classes from different distributors. In order to achieve a balanced portfolio for your particular business, the SipSource Analysts recommend a three-step process:


  • Identify product segments/price tiers relevant to your portfolio.
  • Pull relevant SipSource data.
  • Compare your depletion growth rates to the relevant category information.


Using this method, they say, makes it much more likely that the products you stock will also be the products you sell. As Ooms remarked, “Using the forecasting data is great as a gut check. The better you are able to use data to support your gut-check, the more accurate it’s likely to be.” And that’s the whole point, after all.


Adapting Channel Strategies

Not all trade channels are created equally. For example, without SipSource reports, many in the beverage alcohol industry would likely be unaware that the fastest growing on-premise channel for both wine and spirits is transportation. The “other on-premise” channel — which includes concessions at large venues such as stadiums, arenas, airports and convention centers — is also growing. Restaurants, bars and nightclubs are showing far less growth (and in wine, declines).


When creating forecasts for your business, the SipSource Analysts recommend taking channel into consideration. Some important questions to ask include:


  • How big is the channel/sub-channel?
  • How is the channel performing? 
  • What is your portfolio’s channel profile?
  • How does it compare to the overall segment’s channel profile? 


Once you have answers to these questions, they suggest conducting a SWOT analysis of your business portfolio, identifying the Strengths, Weaknesses, Opportunities and Threats that might impact sales in the various channels.


With that done, you can pull your company’s depletion data by channel and subchannel to analyze their relative importance to your business. By comparing your own depletions to what you see in the SipSource reports, you’ll be able to assess any gaps that might need to be addressed in your plan so you have a better idea of what will really happen in the market.


Data Diversity

One important point that came up during the session was that SipSource is not the only source of valuable industry data. As Stratton said, “If you’re using just one source of data, you don’t really understand the market. How do you augment what you’re getting with other data to make sure you have a better picture of what’s happening in the market?”


In the final analysis, Brager, Stratton and Ooms were in agreement on what to look for when assessing data sources. The information you rely on to make decisions for your business should have:


  • A clear understanding of where the data comes from.
  • Transparency in the data processing and logic applied.
  • Alignment with your intuition about the business. (In other words, it needs to pass the “sniff test.”)


By relying on SipSource, data from the Alcohol and Tobacco Tax and Trade Bureau (TTB), and other sources, businesses can make highly informed choices about what to expect in the coming months and quarters. Having the right data is just the first step. Slicing and dicing it until it’s useful will help you outwit and “outbuy” your competitors.