Big Data is a big deal. Part of the reason for this is because the concept lives up to its name. Humans produce 2.5 quintillion bytes' worth of data per day from a wide range of sources, from smartphones to social media, and it's projected that there will be as much as 200 zettabytes' worth of data floating about for people to mine and analyze by 2025. This amount of data may appear to be overwhelming, particularly since a zettabyte equals one ---tillion (1,000,000,000,000,000,000,000) bytes. Yet when utilized properly, data can provide a wealth of valuable hyper-focused insight on everything from customer behavior to ad-campaign strategies.
As the amount of data grows, so has the interest among distilleries to incorporate solid data-analytics strategies into their operational plans. While this may cause some consumers to cringe, under the assumption that their information is being used for nefarious purposes, the practice does make sense. The ability to yield more detailed information on metrics like regional sales and customer demographics such as age and gender can be tremendously useful for distillers seeking out more efficient paths to get their brand and bottles in front of the right customers.
The data can also lead labels in the craft and small-batch sector to use smarter and more efficient marketing techniques that provide leverage against bigger brands and their more expansive marketing budgets. "Data can help build better relationships between the brand and the consumer," says Daniel Yaffe, the chief operating officer at AnyRoad, a San Francisco company specializing in data science. "It can help convert a person from a potential customer into a brand champion, which is the point of using data in the first place."
Despite the benefits of using big data, the distilling industry was slower to tap data's potential power than were other industries like finance and healthcare. Tradition-specifically, traditional methods of getting a product to market-can be blamed for this lag, and it took a paradigm shift caused by online third-party platforms for the industry to pick up the pace. "Things were so locked down in the three-tier system, there hadn't been much of interest in data in distilling," explains Wylie Donaho, the cofounder and chief operating officer at the Austin-based marketing group Big Thirst, Inc. "E-commerce changed that. Now, if you're not gaining insight from where your bottles are being purchased through e-commerce, you're somewhat flying blind."
Of course, there's also a big difference between merely gathering data and obtaining useful data. With the sheer amount of data generated, separating the wheat from the chaff can be a daunting task. In response, distillers are turning to analytics companies like AnyRoad and Big Thirst to help parse the data into actionable insight. Once these agencies collect data from sources such as websites, surveys, and point-of-sale transactions, they use sophisticated tactics like data visualization and predictive analytics to paint a complete picture of consumer behaviors in a manner that makes it easier for distilleries to use.
The data's story is the lone element that truly matters to the distiller in this process; the intricacies behind the actual data collection aren't necessary to build effective strategies. "You don't have to understand how an Aston Martin works to enjoy its speed and performance," says Yaffe. "Same thing with data. You can have a basic knowledge of it, but you don't need to necessarily know what's 'under the hood' to use it effectively."
There are a number of layers to the data distillers receive from their analytics partners. Some of it is rather straightforward, such as which spirits are selling best and what city or state moves the most product. Other forms of data lean heavily into consumer demographics, such as a person's age, gender, salary, and how much they typically spend during a trip to their favorite liquor store. These metrics in particular help distilleries drill past preconceived demographic-based notions to gain a more specific snapshot of their customer.
"The typical aspirational target for a spirit at a specific price point may be a person that's 25 to 36 years old and makes X amount of dollars per year," says Emily Webster, the distillery sales and marketing manager at the Hangar 1 distillery in Alameda, California. "But the data we collect may tell us that the customer that's really into our product is 40-year-old women that earn more. Having this insight can help us build better marketing strategies with that specific customer in mind."
Distilleries also utilize this deeper data-driven understanding of customers to build tasting-room and distillery-tour experiences that align with the interests of their targeted consumer base. This is particularly critical as people slowly begin to get comfortable with visiting distilleries after more than a year of closures. "People didn't go out for so long, and they're carrying a high level of expectations when they do come, which is a good thing," says Kate Jerkens, the senior vice president of global sales & marketing at the Uncle Nearest distillery in Shelbyville, Tennessee. "We want to use data to make sure we're creating the positive experience they want."
In some cases, the data informs distilleries that what customers want is an elevated experience. The insights Webster received through data analytics compelled her to lean on her experience working for wineries in nearby Napa to offer upscale tasting flights that included cheese and caviar pairings. It's proven to be a popular offering and has helped to forge an even deeper connection with the distillery's clientele. "These types of experiences develop brand loyalty, not just to the liquid, but for the property itself," says Webster.
The information gathered through various forms of data collection is just that: information. Even with sophisticated tools in place to parse the data, some of the information requires human logic and insights to interpret it in an accurate and helpful way. "It's important to look at things holistically," says Jerkens. "For example, our distillery-tour data skews female, but that doesn't match other data patterns. The reason they skew is partially due to women being trip planners when it comes to booking destinations."
There are also a few gaps with data collection the distilling industry has yet to close. Depletion reports aren't updated in real-time yet, so distillers don't have full access to the precise number of bottles available at an on- or off-premise account. Data-driven online ads are somewhat unhelpful. While they can tell a targeted user their favorite bottle is available at a nearby liquor store, they aren't allowed to say exactly which store, giving the ads a slight "local singles in your area" vibe.
Still, these issues are minor hiccups compared to the wealth of insight that a distillery can access through data analytics. It's a process that can indeed fortify the distillery/consumer dynamic, which despite cries of intrusion of privacy by some people, is the fundamental goal for the distilleries and their analytics partners. "We're not looking to give away a person's data or anything like that," says Donaho. "All we're doing is just trying to figure out the best way to get that person connected to their favorite bottle."