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Allied
Domecq Makes Full Use of Available Data to Gain Better Business
Insights
John
Petch
Director, Category Development
Allied Domecq
Marianne
Frasco
SVP, Strategic Market Development
TDLinx
Facing stiff competition, beverage alcohol suppliers need
to make use of all available data to draw actionable insights
about their business. However, just determining total sales
alone from off- and on-premise channels is a complicated and
cumbersome process. Disparate data that help compile sales
information— shipments to, distributors, depletions
to stores, and sales from control state agencies—come
from a variety of sources.
Once pieced together, these data elements comprise the total
sales picture; however, to analyze what is happening in the
marketplace beyond just raw sales data, one needs to add in
retail measurement data. This becomes an almost insurmountable
task when bringing all the pieces to analyze in aggregate.
A solution to this industry challenge is to link the disparate
data sources through a common standard. TDLinx, an ACNielsen
brand, provides that solution [See chart 1].
Challenges for the Beverage Alcohol
Industry
An underlying challenge for the industry is the three-tier
distribution process for spirits and wine marketers. It is
made up of manufacturers (suppliers), who ship product to
wholesalers, who then distribute product to off-premise (retail)
and on-premise outlets. Complicating this system are individual
state laws that govern the sale of alcohol.
"Control states," comprised of 18 states plus Montgomery
County, MD, use government agencies at the wholesale level
to control the sale of distilled spirits and wine [See chart
2]. Twelve of these jurisdictions also exercise control over
retail sales through government operated package stores or
designated outlets.
Control state sales data is compiled by the National Alcohol
Beverage Control Association (NABCA), which serves as a data
clearinghouse for account and depletion level data for their
members.
Wholesaler depletion data for open states is collected and
made available by Beverage Data Network (BDN), the primary
source of depletion and retail account data collection in
the wine and spirits industry. Complementing retail depletion
data from BDN is the syndicated POS data from ACNielsen's
Scantrack service. The POS information generally covers about
50% of off-premise retail volume (or 35% of the total volume),
as scanning markets for the sale of alcohol are limited to
"open states" and to selected markets and accounts
[See chart 3].
"Rocky"—A Case
Study
For Allied Domecq, the need was to better understand their
marketplace to boost sales beyond traditional methods as traditional
methods were not providing enough data to analyze the consumer
attitude of the brand nor quantify specific marketing targeting
changes. To do this, the company needed to use all the data
and tools available to make sure they understood shipments
and depletions—connecting the raw data to find nuances
and trends. Allied Domecq demonstrated how they used these
tools in a case study. The brand is masked here under the
name "Rocky."
Allied Domecq used ACNielsen Scantrack services to identify
the market or markets that represented the biggest issue.
By drilling into market- and account-level information, they
were able to identify the problem areas. Florida market and
accounts emerged as an issue.
The next step was to identify their Rocky consumers and where
they shopped. Traditionally, Allied Domecq had relied on their
own consumer research and ACNielsen Homescan consumer panel
data to understand the consumer demographic profiles on a
national level. However, as is often the case with beverage/alcohol
accounts, samples can be small on a regional or state level.
Using distributor depletion data as fuel for Spectra's Localizer
system, the stores and neighborhoods where Rocky was selling
exceptionally were identified. With the help of TDLinx, Allied
Domecq had confidence that their depletion data—linked
to actual stores through TDLinx Codes—was correct, and
that they could drill down into the marketplace. This allowed
for more precise targeting to project same store sales, volume
and profits.
After looking at depletion movement information over the current
two-year period, Allied Domecq identified over 3,000 stores,
of which 578 stores were found to have sufficient movement
to create a local Rocky Florida profile.
Allied Domecq then looked at Florida designated market areas
(DMAs) to create the local Rocky Florida profiles. Out of
the ten DMAs, there were five with a sufficient sample: Miami,
Orlando, Jacksonville, Fort Myers and Tampa. The national
profile for Rocky showed that Rocky skewed toward the younger
households with no kids. Allied Domecq's advertising message
was going out to "Party People."
However, for Rocky in Florida, they discovered there were
differences among the markets. The market profiles skewed
toward younger households with kids, as well as an older empty
nester skew. This made sense because of Florida's high concentration
of aging consumers and Hispanic families with kids.
By gaining these new insights into how to reach consumers
in Florida, the decision was made to market to people within
each DMA, getting out the right message by DMA. Allied Domecq
was able to identify stores that fit the high opportunity
Rocky profile but were under-performing. They then were able
to calculate the potential upside for targeting and converting
those shoppers. The end result was an upside potential opportunity
of an incremental 15% increase.
By combining several information sources—depletion data,
ACNielsen Scantrack and Homescan information, targeted with
Spectra information, all combined via TDLinx—Allied
Domecq had the key to uncovering untapped consumer opportunities
within local markets as never before. Allied Domecq was able
to establish a better picture of local consumers, so their
marketing dollars could be used to more effectively target
stores with the right consumer message. These are opportunities
that, if only partially realized, could represent millions
of dollars to the bottom line.
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