Make alcohol a thoughtful purchase
Whether it is visible or not, most businesses buy alcoholic beverages every year. Look hard enough (or not too hard) and it plays a role in gifts, incentives or entertainment. Depending on your organisation, the amount of money spent can add up. What most do not consider is making it a conscious choice like other consumables. After all, if it is not controlled, it can become thoughtless, expensive and increase risk.
Conscious or not, buying alcohol is part of an engagement strategy. Engagement with clients, staff, suppliers or communities. By choosing to make it a conscious choice, consumption becomes thoughtful and with intention. And, it makes buying a considered choice.
This method also extends its purpose beyond consumption to a broader role. Where does it fit? How much is appropriate? What does it say about our business and our values?
If you can’t measure it. You can’t control it.
Disparate suppliers make the tracking of alcoholic purchases difficult. Cafes. Restaurants. The local bottle shop. Gifts purchased on P Cards. Petty Cash and staff reimbursements. Very few organisations utilise formal purchasing controls in this area. And even fewer would be able to report on their alcoholic beverage spend let alone control it. Through our supplier, your organisations spend is visible via your member portal
How you can control it?
You could spend a whole lot of time (and money) doing it yourself. Checking through P Card’s and staff expense reimbursements is painful. Separating it out from food or other beverages. Or, think outside the box and consider where and how you buy it.
Where can you save?
The first question to ask is should we ban spend in this category? This is the easiest way to reduce spend. In many businesses, this is not possible or may not even be desirable. So thought needs to go to strategies which will ensure that every dollar spent counts.
Supplier consolidation makes complete sense here. Reduce the local purchases to one supplier. One who can supply data. This provides exposure to total spend which you can manage. Once you understand the spend, you can control and optimise.
This should also allow you to take advantage of best in market price strategies. This alone could provide a cost benefit of 5-10% of your total spend.
Another move is to shift to on-premise functions. These cost about 25-50% less than off-premise functions. Where you cannot do this across the board, a shift of only 40% of spend could reduce total expenditure by 10-15%.
Mistakes Businesses Make (and how to avoid them)
Being sucked into the special mentality.
Retailers use aggressive pricing on high visibility products. Then grab margin on impulse or complementary products. Beware of the margin grab on other products offered alongside the special offer. Whether it is the wine that goes with the beer order, the mixers or $5 gift bags that should only cost $1 at the supermarket. Retailers and sellers will always find a way to reap back margin where they can. This can translate into a 4-6% increase in your total spend.
Paying excess FBT
Events, catering and alcoholic beverages on-site do not attract fringe benefits tax (FBT). Staff or client events at external premises generally do. While there are costs associated with having a space for entertaining clients on-site, you should budget this as part of expenditure on engagement purposes.
Lack of range in traditional retail model
You want your choice of beverage to reflect a little on what makes your business unique. You want it to stand out from the same old, same old traditional drinks that you can get everywhere. As a gift – thoughtful, unique products say a lot about how you value the recipient rather than an everyday product. An average bottle shop may contain as little as 10% of the range of an online alternative.
Choosing a wine by its label
Many of the brand labels are owned by major winemakers and retailers. They invest in promoting labels to look like quality brands to catch the unaware buyer. With limited knowledge, consumers may often be tricked into buying wines that provide a higher margin to the seller. Often the price paid does not match the quality the customer assumes they are purchasing.
Not making it part of an engagement strategy
Prohibition never worked. Not talking about it does not either. Open up a conversation about alcohol as part of a well-considered engagement strategy. This way you remove the taboo from the workplace and the resulting temptation to hide it. Make it a cost like any other for managers to manage. This will help you control it, manage it and optimise it.
Supply Clusters Offer
Supply Clusters partner with Boozebud who provide a nationwide solution for business. They have over 4500 stocked products available for speedy delivery. And, offer a range that suits everything from gifting through to entertainment
Members receive the following benefits from Boozebud:
- Best pricing in market
- Free delivery on all orders over $100
- Rebates on all spend over and above best in market pricing*
- Access to all of your expense data with Boozebud through the Supply Clusters member portal
- Rebates for premium members