Selling in Horeca: 8 techniques your brand must master

Figures vary depending on the year and the sources, but commercial catering in France is estimated to be worth around €25 billion, compared to €21 billion for the hotel industry and €5 billion for bars. For food and beverage brands, it is therefore clear that the "on-trade" market (CHR) is full of business opportunities.

‍But many challenges await brands wishing to venture there: a disparate market, the power of distributors and major brands, or even seasonality effects, etc. To successfully break into this market, companies must first understand its specificities, in order to implement adapted sales and marketing strategies.

‍To help you do so, Sidely has identified 8 keys that will allow you to deploy a winning strategy in the on-trade sector.

1) Define a target consistent with your brand

The CHR (Cafes, Hotels, Restaurants / On-trade) sector represents a very specific market for brands. Many variables need to be considered when it comes to defining your marketing and sales strategy, but also your distribution channels.

To start with, the sector includes a wide variety of target establishments, ranging from neighborhood cafes to Michelin-starred restaurants and hotel chains. The latter may be present in urban, tourist, or rural areas, representing as many different requirements and customer profiles.

‍Given that few companies have the resources to prospect all targets simultaneously, you will probably want to start by defining priorities. The parameters mentioned above can then be used to establish strategic target groups, called segments in marketing. This process integrates your marketing mix, correlating all marketing factors with one another. For example, supply must imperatively meet demand, which implies focusing on targets (e.g., purchasing power) corresponding to your products (e.g., range) and vice versa.

If you are specifically targeting areas that live off tourism, do not overlook the hazards related to the economy, geopolitics, health situations, or all kinds of events that could impact tourist seasons.

2) Define a distribution strategy

Your distribution policy must also lead you to secure strategic partnerships with your clients and distributors. Indeed, on-trade establishments need frequent replenishment due to daily product consumption, and the quantities purchased can vary considerably depending on the size and type of establishment. There are 3 modes of distribution:  

• Intensive: selling "everywhere", to the largest number of people;

• Exclusive: partnerships chosen within a deal logic;

• Selective: selection based on specific criteria (e.g., technical expertise).

→ Discover how to choose your distribution mode.

‍But beware, distributors do not guarantee comprehensive coverage of the targeted market: 20% of final points of sale (bars, restaurants, etc.) are not under contract with a distributor, and can therefore be freely prospected. That still represents nearly 50,000 targets!

‍However, if you come from the world of mass retail, you are probably used to negotiating with central purchasing bodies on highly standardized assortments and offers, whereas the on-trade sector leaves more room for "local" discussions and adaptation efforts regarding products, offers, or partnerships.

‍Nevertheless, to avoid dispersion phenomena, you might choose to sacrifice a bit of margin to work with distributors. They "control" 80% of the market, and contracting with them is not without its advantages. Because, going through on-trade distributors means benefiting from their sales force and logistics. Furthermore, for a brand that aims to deploy an intensive distribution strategy, distributors will be an absolute necessity, not a choice.

‍Last but not least, your logistical capabilities can also be a determining factor. For example, if you distribute fresh products, or those with a limited shelf life, the distribution frequency can increase drastically, and the scope of the geographical area could test your logistical capabilities. It goes without saying that it is imperative for your profitability to avoid losses from outdated or unsold products.

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3) Maintain pressure on communication

Distributors manage distribution, invoicing, and theoretically promotion. "Theoretically", because in practice, it is often complicated for them to push all of their brands, especially if their sales reps are incentivized on certain product references as part of commercial operations.

‍Furthermore, you cannot leave the responsibility of making your brand known to a third party. That is why it is mandatory for any company distributing these products in the on-trade sector to deploy its own advertising campaigns, whether to develop brand awareness or to communicate a product launch.

‍Your communication must be differentiated according to the targets: trade partners, distributors, consumers. Ideally, a solid marketing plan pushes all channels simultaneously to maximize touchpoints. To communicate is to repeat, and a customer is more likely to order your product in a bar or restaurant if they have been exposed to your brand several times in the preceding days, regardless of the platforms involved (social media, radio, urban billboards, POS advertising, etc.).

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4) Optimize your sales rounds

Now that you have a strategy to approach the on-trade sector, you will need to optimize sales by making your commercial action profitable.

‍You will thus need to concentrate your efforts on the right targets.

‍But how do you achieve this?‍

Prospecting: identifying sales potential

Doing tastings is good... But to what end?

In the on-trade sector, it is not uncommon for sales reps to wander randomly through an area they discover and knock on doors, hoping for the best. Several parameters will determine the quality of the target:  

• General business performance of the establishment (notably footfall);

• Type of clientele (trendy, chic, popular, etc.);

• Distributor in place? If so, do you work with them? If not, is the contract exclusive?

• Sales potential for your product: for example, for a beer brand, how many taps or kegs? A large place does not necessarily mean high alcohol consumption, etc.

In short, if you go in blind, return on investment is far from guaranteed!

To avoid scattering and to maximize the ROI of your on-trade sales meetings, having access to databases of on-trade establishments is essential. You are thus able to map the covered territory, locate your prospects according to the segments you have defined, or isolate the points of sale that can buy directly from those that go through distributors (partners or non-partners). This allows you to optimize prospecting time by organizing rounds in line with your development goals. Finally, it is essential to properly qualify your on-trade prospects, to understand the sales potential and if they are truly within your target audience.

Active clients: maximizing market value

But the optimization of commercial time does not stop there. Once a client account is opened, you must continuously ensure that you maximize its value. The notion of order scheduling is central: if you take the order too early, you limit the volume and the client risks overstocking. Arriving too late, there might be a loss of potential revenue, not to mention your competitors lying in wait for your neglected clients!

While nothing replaces proximity to your clients (fresh information is key), a CRM dedicated to the on-trade sector will allow you to automate reminders to encourage reordering and generate efficient sales actions: the right prospect at the right time with the right strategy.

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5) Activation: the pivotal moment in the on-trade sector

In the on-trade sector, relationships are at the heart of the sale, and the beginning of the collaboration is a crucial moment.

‍Another absolute necessity to boost your sales: your sales reps must assist the client in setting up the merchandising and share their experience with them. This is the best way to guarantee that your brand is the most visible in the establishments, as customers tend to order what is in their line of sight! Also, make sure your products are added to the menu, if applicable. And don't forget that a loyal customer is more inclined to increase their purchase volumes, allowing your sales reps to generate additional sales or expand the range.

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6) Brand ambassador: increasing expertise 

To represent and promote your brand to on-trade professionals, you may wish to recruit and train brand ambassadors.

‍Particularly present in this sector, "brand ambassadors" ensure the visibility and good reputation of the brands they represent.‍

Their responsibilities generally include the following:

1. Promotion: presenting and promoting the brand's products or services;

2. Training: training establishment staff on product use;

3. Relations: building strong relationships with professionals in the sector;

4. Feedback: gathering and reporting feedback from customers and professionals;

5. Visibility: using social media to promote the brand and engage the community.

The on-trade brand ambassador also conducts rounds with distributors to try and increase order volumes, present innovations, or run tastings. They have both an impactful marketing speech and a fine technical knowledge of the products.

To delve deeper into the subject, discover everything you need to know about the on-trade brand ambassador.

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7) Advisory power as a pillar of the commercial relationship

According to NielsenIQ, one in three bartenders wants help from their suppliers when designing their menu! Knowing that more than 70% of bartenders influence consumer choice through regular recommendations, it is clear that every brand must know how to develop its advisory power.

‍Especially in the context we know, with on-trade owners and managers under pressure from inflation and changing consumer behavior, as well as emerging trends like organic, craft beer, or cocktails. For owners, who are often passionate about business or hospitality, the rapid and global evolution of the sector can be extremely complex to decipher, especially with long working days that leave little room to step back.

‍For you, this is a wonderful business opportunity: venues have never needed advice and mutual aid as much as they do now. Your sales reps and brand ambassadors meet dozens of business owners and distributors every week in a bustling ecosystem. With their experience, culture, and expertise, they can represent invaluable help for small businesses.

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🚨 Don't forget point-of-sale display (POS): placing your advertising materials is imperative, and your client wins too. Here too, it's up to you to educate and help your clients make the right choices.

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8) Bet on sales training

Which brings us to the sinews of war: the art of commerce!

Many decision-makers (including founders) make two mistakes:  

• They believe their product will sell itself due to its intrinsic qualities;

• They think they are very good salespeople themselves because they are experts in their industry.

These two beliefs cause many companies to miss out on their development potential.

To begin with, as great as your product is, know that customers also (or even primarily) buy a salesperson. And despite the digitalization of almost all professions, French companies have never searched for so many sales representatives! Yes, humans are still at the heart of sales, not chatbots or artificial intelligence. The on-trade sector still runs on handshakes and "visiting friends" rounds 👷🧑‍🍳

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Secondly: you know your industry and the on-trade sector like the back of your hand, very well... But are you really a sales ace? And if so, does that make you a brilliant trainer? Sales is an extremely technical profession, and one that is learned by investing time. Whatever the personality of your sales reps, having them trained by specialized firms will always have positive repercussions on your revenue. It is also an excellent way to show your commitment to helping them upgrade their skills rather than letting them fend for themselves without fulfilling your managerial mission.