Case Study | National Beer Manufacturer

Out of Stock Reduction – Finding and Fixing the Root Causes of OOS in Adult Beverages

Thanks to Market6, this top national beer manufacturer and its retail category managers were able to work together to:

  • Analyze every OOS during a pilot project
  • Switch from ordering to forecasting where appropriate
  • Fix wholesaler ordering issues
  • Retrain store clerks

Challenge

Reducing out-of-stocks for beer items in grocery stores is especially challenging because of differing distribution regulations across geographies, limited cold case space, and dependence on distributors and store staff to implement frequent on-shelf restocking.

With over a million out of stocks annually for its products, this top national beer manufacturer launched an initiative to reduce out-of-stocks in stores for its single-largest national grocery customer. The manufacturer estimated a 5% cut in its out-of-stocks would equate to $1.5 million in added revenue for the grocer.

Solution

Using Market6 reports and analytics, built on daily store-level data for both sales and forecast daily demand, the beer supplier identified the most frequent out-of-stock problems. The supplier quantified the potential lost sales of each situation, prioritized the most costly issues and highlighted “repeat offender” situations. It also identified the underlying causes and implemented fixes for different types of problems, including:

  • Switched from ordering to forecasting on some items
  • Fixed wholesaler ordering issues
  • Retrained store clerks

Store by store, the beer supplier fixed problems to improve on-shelf availability for shoppers.

Impact

Using Market6 to identify, quantify, research and solve out-of-stock problems over one particularly important holiday weekend during the pilot test, the beer supplier was able to reduce the frequency of out-of-stock events by 81%. The supplier was also able to drive $172 in incremental sales per store, per day, during the pilot test through better in-store display execution.