Avoiding a hangover in alcohol warehouses

Simon Jones -
Your Focus
- 2 May 2024 ( #1177 )
4 min read
In the post-pandemic environment, businesses selling alcohol need to be able to prepare and distribute orders quickly
In the post-pandemic environment, businesses selling alcohol need to be able to prepare and distribute orders quickly
Simon Jones is senior sales executive for the UK and Ireland at Exotec. For the last 18 years, Jones has helped companies introduce new technology to their supply chain and logistics operations to improve productivity and customer service. 

British alcohol businesses have experienced a period of revolution in recent years with the rise of craft beers, artisanal wine and spirits and even low- or non-alcoholic options.

While Britain has always been a pioneer in the alcohol space, with plenty of demand from customers year-round, consumers have been shifting away from pubs and bars towards at-home drinking experiences fuelled by e-commerce and rising prices.

Alcohol wholesalers, manufacturers and distributors must, therefore, find ways to adapt to meet and beat the competition – and it all starts in the warehouse.

Is trouble brewing?

In the United Kingdom, the alcohol market is estimated to be worth GBP18.4 billion (USD23 billion) and home delivery services are increasingly contributing to this post-pandemic.

From craft breweries and natural wine shops, to whiskey distilleries and cocktail bars, many alcohol manufacturers and retailers have established an online presence to tap into this growing market, which is expected to grow by 5% year on year between 2024 and 2029.

There’s a mindset shift around alcohol for many Brits too, as people turn to low- and no-alcohol products, reflecting increasingly health-conscious attitudes.

Coupled with the current economic climate, this means that when they do want to drink, customers are spending more time finding the ‘right’ product, choosing quality over quantity.

This has been great news for established wholesalers who have been in the market for some time and are known for their premium products.

However, the surge in options for consumers has created a competitive landscape for manufacturers, retailers and wholesalers alike, and has had a knock-on effect for some of the big names who may be unable to adapt fast enough.

Businesses need to be able to prepare and distribute orders quickly, more efficiently and at a lower cost in order to maximise on the opportunities the current climate presents, or risk falling short.

Uncorking the warehouse challenge

The answer to this is flexible warehouse automation.

After decades of growth in an industry fuelled by Franken-systems, which combine mechanisation, pick-and-packing and intensive labour to move heavy, fragile and expensive cases, alcohol distributors have hit a wall.

Traditional warehouse operating systems are in need of an upgrade, and there is pressure from all sides, including labour shortages and the disruption caused to fulfilment operations driven by the increase in direct-to-customer deliveries. 

While automation isn’t a new concept in the UK, traditional automation is sized on anticipated volume and type of orders based on a long period of time.

As a result, traditional picking technology and equipment is no longer enough to support the alcohol warehouse environment of today.

Instead, robotics has huge potential to support the complex demands of customers in 2024 and beyond.

Serving up a treat

In a warehouse environment dealing with home delivery fulfilment as well as store deliveries, there is a need for flexibility and the ability to scale, while ensuring that order cycle times are minimised.

This is especially important as many retailers offer same- or next-day delivery on mixed cases of wine, beer and spirits. Robotics can be instrumental in achieving the above.

The fragile and heavy bottles that often come in all shapes and sizes, from individual bottles of beer to bottles of champagne, also need careful handling and attention.

Picking bottles and cans manually is difficult because of their weight and pushing a trolley stacked with them can be an arduous task that few people want to do.

This can lead to health and safety challenges as well as exacerbating the labour shortages that so many warehouses are facing.

Instead, embracing robotics increases productivity by up to five times and makes life easier for staff, who will no longer need to pick and move full cases of alcohol.

For B2B wholesalers selling full cases of alcohol who want or need to shift towards direct-to-consumer sales, automation provides plenty of opportunity to overcome the disruption this might otherwise cause in a warehouse where traditional picking methods are in use.

This would enable them to deliver mixed cases or individual items right to people’s doorsteps, opening up new revenue streams with ease.

Additionally, the same system can automate full case picking for stores, as well as mixed case picking for e-commerce – all with the same levels of productivity.

It’s this kind of agility that is setting smaller distributors apart from the incumbents, and the latter need to adopt new ways of thinking to keep up.

Success on tap

Beer, wine and spirits distributors must automate warehouse distribution or risk being left behind by competitors that can prepare and distribute orders faster, more efficiently and at lower cost.

Companies that adopt robotic goods-to-person automation will continue to become more resilient against the challenges affecting the industry today.

From reducing dependence on manual labour and boosting productivity, to maximising space within the warehouse, these innovative systems position businesses to meet the ever-changing market demands now and grow even faster in the future.

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