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Consumer preferences and buying behaviors in the alcoholic beverage space are changing faster than you can pour a pint and say ‘cheers.’ So, how do companies keep up? Erin Engels, Senior Vice President of Commercial Strategy, is helping lead those efforts with Breakthru Beverage Group. Breakthru is a leading North American beverage wholesaler, meaning they help thousands of brands land on store shelves, on restaurant menus and on the tap list at your favorite bars. In her role, Engels leads the development and implementation of Breakthru’s commercial strategy. She creates short- and long-term initiatives that support both innovation and growth. In this episode, Engels shares how Breakthru stays nimble in the face of changing consumer demand, how a special team at her company identifies the next big brands, plus how you can gain employee and executive buy-in for effective long-term strategy.
Show Notes
Erin Engels is the Senior Vice President of Commercial Strategy at Breakthru Beverage.
Table of Contents
1:15 Adapting to consumers drinking less
4:20 Identifying winning brands and the Trident team
5:59 What to do if a brand flops
9:06 Developing effective long-term strategies
12:23 Bringing an engineering background to business
17:09 How AI is being used in the beverage space
18:27 Doing business internationally
19:21 “Be curious”
In this episode:
- Why Gen Z Is Drinking Less – TIME Magazine
- Trident Emerging Beverages – Breakthru Beverage
- Breakthru Beverage Group’s 2024 Corporate Social Responsibility Report: Executing with Excellence
Related articles and information:
- What will we be drinking in 2025? Americans are chasing moderation. – USA Today
- US Gen Z alcohol trends: a shift toward mindfulness and moderation – Attest
- Capturing the Elusive Benefits Of Collaboration – Forbes
- Go, teams: When teams get healthier, the whole organization benefits – McKinsey & Company
Transcript
Nick Greenhalgh
Today, on the Voices of Experience podcast, consumer preferences and buying behaviors in the alcoholic beverage space are changing faster than you can pour a pint and say cheers. So how do companies keep up?
Erin Engels
We’re not always going to have a winning formula. So it’s really a matter of staying close to it, learning from where it worked, learning from where it didn’t work, and re-evaluating it.
Nick Greenhalgh
That’s Erin Engels, Senior Vice President of Commercial Strategy with Breakthrough Beverage Group. Breakthrough is a leading North American beverage wholesaler, meaning they help thousands of brands land on store shelves, on restaurant menus, and on the tap list at your favorite bars. In her role, Erin leads the development and implementation of Breakthrough’s commercial strategy.
She creates short and long-term initiatives that support both innovation and growth. In this episode, Erin shares how Breakthrough stays nimble in the face of changing consumer demand, how a special team at her company identifies the next big brands, plus how you can gain employee and executive buy-in for effective long-term strategy. Erin, welcome to the show.
Erin Engels
Thank you so much for having me, Nick.
Nick Greenhalgh
I’m going to rip the Band-Aid right off and jump into our first question that starts with some stats. So listeners, wrap your head around this a bit. A 2023 survey from Gallup found that the share of adults under the age of 35 who drink alcohol dropped 10 percentage points in two decades, from around 72 percent in 2001 to 2003 to about 62 percent in the last few years.
But that same poll showed that drinking has increased among adults 55 and older. Erin, how has Breakthrough adapted to the changing needs and behaviors of the consumer?
Erin Engels
So, first of all, I love the fact that you’ve opened up with some incredible stats about the industry. Thank you. Yes, we’re seeing some interesting dynamics in terms of consumer behavior from, we’ll say, the Gen Z, the newer legal drinking age consumers, seeing some trends around more of a health focus, so more moderation, which has driven an increase in no-alcohol, low-alcohol beverages.
How we’ve adapted? A few ways. First and foremost is we constantly scour the industry to understand how trends are evolving and what’s happening out there.
In the particular stat that you quoted, the rise in no-alcohol, low-alcohol has really influenced how we think about our portfolio and how we go to market. I don’t know if you’ve noticed the last time you’ve gone to a restaurant or to a bar, but you’re more and more seeing those no-alcohol, low-alcohol sections on their cocktail list. And so the implications to us is we have to, one, have the products that our customers need to sell to those consumers, and then, two, arm our sellers with the insights and the information they need so that when they work with restaurants, they work with bars, they can have an informed conversation, talk about how it’s going to help drive their business, and give them the goods that they’re looking for.
Nick Greenhalgh
Yeah, and I imagine your product portfolio looks very different now than what it did a decade or two decades ago. Is that right?
Erin Engels
Oh, that is very right. I would say the innovation within BevValk is just incredible. Just to throw out a few more stats at you, if you look at how the industry has changed since 2014, there are now 3,000 more U.S. wineries and over 1,000 new craft distillers in the U.S. If you just think from your own personal experience how different a liquor store looks today, think of that tequila shelf or that whiskey shelf versus how it looked 10 years ago or five years ago. It’s incredible. I would say the innovation, the new flavors, the new products that are coming to market are incredibly exciting and creating a lot of opportunities for consumers.
Nick Greenhalgh
Yeah, you teed up my next question perfectly. When you’re looking at one of these new brands or new products, what are the most important things you’re looking for, and what separates maybe a top-performing brand from ones you may pass on?
Erin Engels
Oh, that’s a great question. In fact, at my company at Breakthrough, we have a special team called the Trident team. Their entire job is to look and scour for those new and emerging brands.
They’ve got a very rigorous rubric of what they look at and how they evaluate it, but it really comes down to product. How is the liquid? It’s got to be very high-quality, really resonate with consumers.
What’s the packaging look like? When you put something new on the shelf, it’s really got to draw the attention of a consumer because they’re already overwhelmed by how many products are out there right now, so it’s got to stand out and shine. Then also, the people behind it.
The founders of the product, the companies that own them, are they passionate about it? Is there a good story to tell? Do they have the right resources in terms of supporting it with marketing and sales teams on their ends?
A lot of factors go into whether or not we think that a product’s ready to bring into our portfolio and help incubate and grow.
Nick Greenhalgh
How do I get a job on the Trident team? That sounds great.
Erin Engels
It’s tough competition. I’m telling you, the line is long. They definitely have the coolest job in all of Breakthrough.
Nick Greenhalgh
Related to that, what do you do when you think you have a winner, a new product that you’ve found, and maybe it ends up flopping?
Erin Engels
What we do is we carry a number of products. We’ll take the example of the Trident team bringing on a new brand. We work with them very closely to make sure that we’ve got the right programming, the right plans in place to successfully launch it.
Now, to your point, we’re not always going to have a winning formula, so it’s really a matter of staying close to it, learning from where it worked, learning from where it didn’t work, and reevaluate it, and always being on the lookout for those new products that we need to keep bringing in, keep testing, keep learning to see what works with that consumer.
Nick Greenhalgh
We talked a little bit about consumer behavior and some trends. What do you think the future holds for the beverage industry? Do we think the trends I mentioned at the top of the show are going to continue, or is there something else we should be looking out for?
Erin Engels
Oh, I think the one thing I will say about consumers, especially in the beverage alcohol business, is it’s ever-changing and ever-dynamic. Some of the trends that we’re seeing, in addition to the health focus that you mentioned, is we’re seeing an increased pull for convenience. Consumers are looking for smaller sizes, ready-to-drink options.
We’re also seeing a real push for quality. What we hear from consumers is two-thirds of them say they’re willing to either spend more or cut back on their purchases so they don’t have to cut back on that quality element. The other thing that we’re seeing, especially with the Gen Z, is they’re looking for experiences.
They’re spending more of their dollars against experiences, which, for my business, will translate into, what are those beverage alcohol occasions going to be, and how do we need to make sure that we position our teams so we’re meeting the consumer where they are?
Nick Greenhalgh
You mentioned customers being willing to spend a little more, and maybe that means buying less. And how does Breakthrough react to that? What does that look like on a practical level?
Erin Engels
On a practical level, what that means is having options for our customers. Some cases, it means cutting back. Some cases, it doesn’t.
What we’re seeing, I mentioned convenience in small sizes, but that’s also an option that’s been growing in importance. We’re seeing maybe if you can’t buy that full bottle of XYZ, you’re more willing to to try the product out and buy a smaller version of that. Packaging sizes have become increasingly important.
Nick Greenhalgh
Your role at Breakthrough is focused heavily on strategy and growth with an eye toward the future. What are your non-negotiables when it comes to developing a cohesive, long-term strategy?
Erin Engels
It starts and ends with the consumer. That feeds everything that we’re doing. How is the consumer evolving?
How are their occasions evolving? How are their tastes evolving? And then backing that into what does that mean in terms of where they’re making their purchases?
How are they making their purchases? And then that will then feed into how we ultimately go to market and service our customers and how we ultimately shape what our product portfolio looks like.
Nick Greenhalgh
Yeah, and how do you get senior leaders or more senior leaders to buy into something that needs time to grow as opposed to something that has a clear and obvious short-term benefit?
Erin Engels
That’s a great question. And I would say it starts with bringing people along in the ideation process. So where we initially get our foundation of opportunities is by talking to our customers, doing focus groups, having surveys.
We regularly bring in our frontline sales associates and we ask them what they see as the opportunities. What are their biggest needs? We regularly talk to our key suppliers and ask them similar type questions.
And so when you start the process with that holistic fact base, it makes it a lot easier than to bring people along with the journey.
Nick Greenhalgh
And is there an element of creating sort of checkpoints along the way that prove that you’re continuing to make progress?
Erin Engels
Oh, absolutely. I do not prescribe to the idea of going into a corner and locking the door and creating the most incredible strategy with a great reveal. I am very much a fan of agile methods, creating an MVP, testing it, learning it, tweaking it, scaling it, bringing people along and learning with your customers.
Learning with your frontline is an incredibly important part of the strategy development process that if you skip over that, you just risk failing and failing big.
Nick Greenhalgh
You mentioned a term, strategic perseverance on your LinkedIn. Can you define what that means to you for our listeners?
Erin Engels
Strategic perseverance to me, it’s a number of different things, but really it’s a sometimes, especially when you work in the world of strategy, there are longer term horizons that could in some cases, the day to day could overwhelm or take priority. And so when you’re working on those bigger bets, when you’re working on new things, new ways to go to market, you have to have this perseverance, this keep at it mentality, because otherwise I think in a lot of organizations, the natural tendency will be to drift back to the day to day.
Nick Greenhalgh
Great. Your academic background mixes both business and interestingly, engineering. How do those two focuses work in concert in your current role?
Erin Engels
It’s interesting. I went to school for engineering and loved studying engineering. What I quickly learned though during internships was while I loved learning engineering, I didn’t necessarily love doing engineering.
So I would say while I don’t, in a very direct way, apply my engineering background, what it’s given me is an approach, a methodology, a way to take a problem and to really dissect it into its parts, understand what the root cause is, and then come up with solutions. So it’s really more of a framework or an approach that I apply in my personal life, in my professional life, and really more than I ever thought I would.
Nick Greenhalgh
That’s great. It seems to be an almost perfect fit for strategic thinking, right? It’s something you can lean back on and follow regardless of the project.
Erin Engels
Exactly.
Nick Greenhalgh
You’ve also managed large teams across multiple stops in your career. What are your keys to building a strong team?
Erin Engels
My keys to building a strong team are a few different things. I think first and foremost, it starts with the talent. So to be a good leader, you have to be a great architect of a team and developer of a team.
And in my opinion, that’s where you need to spend the bulk of your time. In addition to that, it’s being clear on what the vision is, being able to translate that vision into a plan, being able to clearly communicate that plan, and then importantly, empowering your team to go after and get the goal.
Nick Greenhalgh
Yeah. How would you sort of encompass your leadership style? What does it look like for your employees?
Erin Engels
My leadership style, I would say more of a servant leader. And so I truly see my role as I’m there to support and empower my team. One thing that I embraced early in my career that I found to be incredibly helpful is leading with questions.
And I’ll just give you a quick example of the difference in how that comes across and what it feels like. So in one instance, I could say, hey, Nick, great quarter. Next quarter, I want you to double your performance.
Please send me your results each week. Versus, hey, Nick, great quarter. What do you think contributed to your success?
I was thinking we could double it next quarter. What would need to be true for that to happen? And what can I do to best support you as we work towards that goal?
When you lead with questions like that, it does a few things. One is it helps that leader better understand what’s truly going on, what’s truly driving the business. And then two, it creates a better working environment and better engagement across the team.
Nick Greenhalgh
It feels like we’re all rowing the boat in the same direction, right?
Erin Engels
Exactly.
Nick Greenhalgh
Is that something you picked up from someone previously in your career, a manager that managed you? Or is that something you sort of developed on your own along the way?
Erin Engels
It’s something I developed on my own along the way. And honestly, I didn’t even know that I was doing it until someone on my team brought in a book and said, hey, you’ve read this book, right? I hear you asking questions a lot.
And so the connection was made. And that’s when I started to realize that that was a helpful practice and I should actually keep doing it.
Nick Greenhalgh
When looking at building teams and running high-performing teams, what are some pitfalls that managers should avoid? What are some things that are easy to fall into?
Erin Engels
I think when it comes to building high-performing teams, one pitfall that I’ve seen a number of times is when you have a leader who’s incredibly smart and talented and has a vision, but they charge ahead and they push their agenda without fully engaging the team. I believe when the full team is engaged, when you’re bringing all the voices to the table, you will always get a better result.
Nick Greenhalgh
Great. Circling back to the business a bit, how is AI showing up for you and your business? Is that something that your team deals directly with?
Erin Engels
Yes, my team partners closely with the IT team and we are actively looking at ways that we can leverage AI to make our sales teams more effective and make their jobs easier. A very simple example, but it’s incredibly helpful and powerful of what we’re looking at is we recently launched, we have a system that our states use. It’s a tool, right?
There are 25 different tutorials on this tool and it’s complicated. There’s always questions. We’ve embedded AI and now people are able to simply type in their question and boom, they get the right answer immediately without having to sort through manuals and manuals and manuals.
Just a very small example of how it can really free up administrative time so that our sellers are spending more time in front of our customers.
Nick Greenhalgh
Great. I think you mentioned there, but Breakthrough operates in the US and Canada, stretching coast to coast and across a variety of markets. For an example, here in Colorado, craft beer is what people are going for, but California is different and wine might be more popular there.
How does an international company like Breakthrough serve such a wide range of interests?
Erin Engels
We do it by one from a corporate standpoint, we understand that there are local nuances and we make sure that as we’re looking at data and we’re looking at insights that we’re pulling the locally relevant information. And then importantly, we’ve got robust teams in each of the different markets who have a great grasp on what our customer is asking for, what our consumer is asking for. So that local insight is incredibly important for us.
Nick Greenhalgh
Let’s bring it home with a question we ask all of our guests. And that question is, as a voice of experience, what is one piece of advice you’d like to share with our listeners?
Erin Engels
I think the one piece of advice I would share is be curious. Ask questions, get to the deeper level understanding. When you do that, it’ll help you in your professional career, it’ll help you better understand what’s truly going on.
And that ultimately is what’s going to lead to the best solutions.
Nick Greenhalgh
Awesome. Well, thank you, Erin. We really appreciate it.
Erin Engels
Thank you.
Nick Greenhalgh
For more insights on those consumer behavior stats we mentioned at the top of the episode, go check out our show notes. We’ll have more on trends in the alcoholic beverage space and breakthroughs plans for the future at daniels.du.edu slash voe-podcast. The VOE podcast is an extension of Voices of Experience, the signature speaker series at the Daniels College of Business, sponsored by U.S. Bank. Iruka Nwosu and Patrick Orr are our sound engineers. Joshua Metzel wrote our theme. I’m Nick Greenhalgh, and we’ll talk again soon.