We’re living our lives and operating our businesses in different times. 2020 has thrown a spanner in the works of traditional business models and status quo ways of thinking. What was perhaps relevant six months ago has been robustly stress tested by Covid-19, a global pandemic that has thrown some catastrophic blows to certain industries, some which will take years to recover if they fully recover at all. An adapt-or-die attitude is required to survive and is a novel feature of this event more than most global events in recent history. Even the GFC or Dot Com boom-and-bust didn’t have the ferocity and challenge of survival mindset that Covid-19 has brought so primitively.
We often talk about how technology drives change (often for the good and sometimes the bad). In the hospitality industry alone we’ve seen major changes over the last five years that have had transformative impacts. Innovations abound in POS systems, online training suppliers and courses, online and on-demand alcohol and food delivery services, cloud based inventory management and accounting software, ERP software, the list goes on. These technology advancements have changed roles, systems, processes, cost structures and market dynamics.
That was before Covid-19, but is change now driving technology?
The very companies that have brought you these products and services have been forced to adapt. Their customers’ needs and wants have been driven by the requirements of an external force that no business blueprint would ever have considered.
Australian Hotelier spoke to one company that has entered the tech world of hospitality in the last 12 months, Kaddy. A Sydney-based B2B platform that helps venues discover, connect and trade with multiple suppliers, they have brought a disruptive mindset to a very traditional industry of beverages wholesaling. The Kaddy team believes that change has actually been driving tech for a few years now in hospitality.
Consumers want the long tail of choice, the seasonal IPAs from breweries, natural wines, crafted spirits etc. As a result, venues, in particular retail bottle shop offerings are sometimes stocking hundreds of lines of craft beer alone. The demand is there and this trend requires a more innovative way of wholesaling.
“The traditional method of wholesaling doesn’t support these trends. It’s like comparing Kmart to Amazon, both have their place but Amazon is far more progressive, from its range of SKUs to its shipping model,” suggests Kaddy co-founder Mike Abbott.
“We launched Kaddy to shake things up and provide a more supportive wholesale model to the fragmented marketplace of thousands of craft breweries, wineries, spirits producers etc. We offer a service that complements their growing businesses. The current crisis has really validated our relevance, helping suppliers get paid much faster than they would normally and giving them certainty around cash flow.”
“For the venue, streamlining operations when a lot has moved to phone based contact has also proved to be an important factor from our customer interactions.”
The current crisis has definitely impacted companies like Kaddy in shaping the way the tech will continue to build.
“We have a product roadmap of about 12 months and an engineering team of five engineers locally building this into platform features that are continually being rolled out. We get as much customer and supplier feedback as we can to shape these decisions, it truly is an application and service built by industry for industry,” says Abbott.
“COVID-19 has had a massive impact on the industry, we’re still not through the crisis yet, but we’re already adapting to the requirements it has brought.”
Here are the main themes which Kaddy will adapt and build:
- Easy communication: social interaction and communication are so important and the easier you can make it for suppliers and customers to communicate in-platform the better. A good chunk of venues the Kaddy team speaks to find out what’s happening in the industry from reps themselves, even new products and brands from competitors. There is so much value in good communications channels. Kaddy has started this build and are excited to make this an amazing feature.
- Search and discovery: at the moment, venues are often relying on rep visits and individual mail-outs to find out what’s new from a particular brand. There is no central online catalogue of products in alcohol, let alone craft beer. The ability to search and discover, then instantly trade with suppliers with no friction is the holy grail. But it all starts with really slick search functionality. Kaddy is prioritising this. Once finished it will be really easy for venues to write lists, fulfill customer demands for new products and access their favourite suppliers in the one place with a click of a button. It will bring powerful operational efficiencies
- Choice and convenience: consumers want choice but venues don’t want the administration that comes with it. Onerous credit apps, multiple ordering channels, invoices and payment terms. The Kaddy team is working hard to provide a one-stop shop for ordering from multiple suppliers and offering venues the largest range of the freshest and best products available. Kaddy will continue to build its supplier base while simplifying ordering at the same time.
As restrictions begin to be lifted in hospitality, the growing appetite for quality product often locally sourced and produced will only get stronger. If you throw back to post-GFC USA, 2008 saw huge growth in craft beer. Breweries like New Belgium really made their mark during these formative years growing at over 20 per cent. Similar trends are expected back home and the momentum will take two steps to move three forward but once we’re through the other side of this crises, the industry can expect an even more supportive tech landscape. By that point, maybe tech really will actually drive change again.