The Craft Beer Boom: How to Satisfy Changing Consumer Tastes

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Analyst Insight: Consumers’ changing tastes have heralded the rise of many small breweries in the U.S. As a result, the quantity of SKUs used by food and beverage distributors has risen. In working to address SKU proliferation and enable the storage and picking of a greater variety of product, distributors are avoiding the purchase of warehouse space or adding on to existing distribution centers. Instead, they’re maximizing existing space to increase efficiency, product density and availability. The U.S. craft brew industry has grown to incorporate thousands of SKUs. Increased choice and quantity are great news for consumers and distributors who desire a broader portfolio of brands and packages. But it also introduces the need to store and move more cases and barrels of beer, while optimizing piece picking and managing fluctuating demand for individual SKUs. Companies undertake warehouse and DC optimization by analyzing product mix. Such assessments require the complex statistical analysis of case-picking volume for each SKU. The results are translated into optimal storage, pick area, staging, cleanliness, material handling equipment, vehicle parking, congestion, product slotting, replenishment and vehicle flow. Issues to be addressed include: Conventional case selection requires product profiling, calculating not only annual demand based on case picking volume (excluding full pallet volume), but also yearly peak periods, and understanding seasonal SKUs for pick optimization. Single customer pallet picking usually means the pick path through the warehouse impacts the order of SKUs built on the pallet. As the SKU count increases, managing the pick path and accounting for these frequently lower-volume sales becomes an ongoing challenge. If overall customer volume is relatively stable and distributed across more SKUs, the impact on this type of truck loading is not too significant. With multiple customers on a pallet, it makes sense to move from chimney stacking to building […]