IMI Agency FOUNDER’S INSIGHTS for 2023
Happy New Year, and may the games begin! It is time for my thoughts on the year ahead.
Don Billings, Founder, IMI Agency | January 5, 2023
I started IMI Agency in November 1989 and have seen a lot of changes in my time. The last fifteen years have been frenetic with disruptive innovation, technology, and regulatory changes. The last three years have been a test of will, but wow is it an exciting time to be in the beverage hospitality business.
In an effort to avoid the weeds of specifics, I have prepared a big picture view. My crystal ball says it is safer that way as we all know this economy can change on a dime.
First, the general financial picture:
Credit Suisse expects the industry to continue to grow but at a slower rate.
There were a lot of M&A deals this past year, Wine & Spirits Daily reported about seventy across supplier, distributor, and retailer tiers. A majority of the activity took place within categories such as Tequila and American whiskey.
According to The Drinks Business, most global drink giants have managed to impose price rises.
The war in Ukraine – with its associated shortages of power and raw materials, combined with renewed lockdowns in China and the resurgence of inflation – has had a major impact on imports. We are all affected by the global economy and higher interest rates, transportation, and material shortages.
With the global rise of inflationary pressures, Cowen Insight on consumer tracking indicates some spending cuts in social events and travel. Gas prices have weakened slightly but will gradually increase into the summer months.
And finally, The Restaurant Revitalization Fund Tax Credit should help the small business operators according to the National Restaurant Association.
I sat down with Larry McGinn, President of IMI, to look back at this past year and discuss what may lie ahead in 2023. Larry and I go way back with the company. Today he manages the day-to-day operations, working closely with our Account Management Team and hospitality clients.
With the on-premise in the US returning to almost 2019 volumes, a lot has and continues to change:
- There are 18% fewer on-premise licenses following the pandemic.
- Those that are open have shifted their mindset surrounding operations. These changes include shorter hours, smaller staffs, increased focus on to-go, higher prices, less menu choices (food and beverage). It is imperative that our beverage programs and features are in sync with our clients’ operations.
- Consumers are looking for convenience, and there is a blurring of sales outlets. There are retail operations within hospitality and hospitality operations in retail stores. IMI’s clients are responding with our “HnR” and “RnH” campaigns to capture beverage sales wherever the customer goes.
- The guest’s drinking habits are changing. They are drinking earlier and wrapping it up by evening, drinking less but better, more experimental, curious to learn and experience, thus losing category or brand loyalty. Menus must change to appeal to these new behaviors.
- Product mix across the industry is changing as guests are bombarded with spirits, wine and beer based RTDs, wine in cans, and pre-mixed bottle/canned cocktails. It is now more important than ever for IMI to help our clients make the right buying decisions that fit their guest demographics.
Tomorrow’s successes are not rooted in yesterday’s ways of working. In 2023, we will need to excel in being Flexible, Innovative, Responsive, Creative and Accountable.
IMI continues to be a key leader in beverage marketing services and systems management, providing our hospitality clients with the tools to successfully address the changing times ahead.
Building Better Beverage Business™
Carroll, Jeff. “4 predictions for the beverage alcohol sector in 2023.” Avalara, 20 Dec. 2022, https://www.avalara.com/blog/en/north-america/2022/12/4-predictions-for-the-beverage-alcohol-sector-in-2023.html.
NielsenIQ. “What’s now and what’s next? Beverage Alcohol industry webinar.” NielsenIQ, 6 Dec. 2022, https://nielseniq.wistia.com/medias/j8l66mm9vb.
Don is the Chairman and Founding Partner of Incentive Marketing Inc. (IMI Agency), and Publisher for in the Mix Magazine (Media), a B2B Trade publication for On-premise Food & Beverage Hospitality. He has been in the industry for 34 years.