The Satellite Review Magazine The Satellite Review Magazine Vol 2 | Page 11

CONSOLIDATION IN THE
BEER INDUSTRY

as well as longer-term operational efficiency. As a result, distributors have greater freedom to consider acquisitions that
they previously may not have been able to justify.
The secret to consolidation through AS/RS lies in the system’s ability to improve cube utilization and increase control
over material handling operations. First, by improving cube
utilization, distributors can store more products more effectively, while handling the new craft beer SKUs that increase
overall profit margin. Also, there is typically no need to
expand existing real estate with new construction – an expensive route that leads to minimal ROI. But, if expansion
is necessary, the space needed for an AS/RS is just a fraction of traditional warehouse space. In many cases, the cost
avoidance of building an AS/RS space versus a traditional
warehouse pays for the automation.

efficiently move, store, pick and create customer orders.
Plus, with a warehouse execution system (WES) – the software component of an AS/RS – it is easy to improve inventory accuracy, ensure optimal inventory levels, and pinpoint
the exact locations of products for picking.
The combination of better cube utilization and control
inevitably leads to a wealth of cost savings, proving the old
cliché, “less is more,” true. Less labor, less energy consumption, less product damage, and less space usage, drives
greater efficiency and productivity across the organization.
Although IBISWorld predicts that consolidation in the beer
industry will slow in the next five years, beer distributors
should embrace the opportunity to optimize their warehouse operations with automation.

Second, by increasing control over materials handling operations with automation, beer distributors can more

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