How a Three-Tiered Distribution System Is Being Disrupted With Digital Transformation

Those of you who work in the alcohol industry know the three-tiered distribution system all too well. It’s a process that goes back to when America finally eliminated Prohibition, though still brought restrictions on how we distribute beer and other alcoholic beverages. This distribution system has also stayed consistent in using the same type of processes and systems for decades.

Through the first tier, companies like yours have to assure the alcohol you produce is safe for production. The second tier involves distributors or wholesalers buying your product, which often involves a protracted process, not including storage. Third tier involves the retailer selling the alcohol on or off-premises.

All these tiers are now being disrupted by digital technology. If perhaps challenging to change from the old systems you’ve used.

Using Digital Software to Help in the Distribution Process

  • You’ll find a lot of stories out there about software companies offering digital apps to help the spirits industry. A good example is a company called Ivy Mobility that created digital software to help streamline the entire distribution system for alcohol.
  • Through their platform, retailers can easily search for products and wholesale pricing. Distributors can tap data about new and existing customers, as well as track all sampling and promotion activity. Suppliers and Manufacturers can look up data on accessing alcohol market across the globe.

It’s just one digital method out there disrupting the old system. What other basic digital technologies can you employ to rid yourself of antiquated processes?

Distribution Management System
Cloud-based Distribution Management System

Using the Web as a Distribution System

  • Silicon Valley continues to make strides in bringing technologies that change many industries. Fives years ago, a tech company created a platform called the Industry Cloud for Consumer Goods, offering an all web-based solution for the three-tiered distribution. Arguably, this is one of the most disruptive digital processes so far based on how so many parts of alcohol distribution involved warehouse storage and delivery routes.
  • A retailer and seller can connect directly to alcoholic beverage suppliers through the platform, bringing a peer-to-peer type of communication. The supplier and wholesaler can deliver personally to the retailer. What’s so great about this is it’s helping smaller businesses like craft breweries and distilleries be able to easier find business partners. Through the old distribution system, it frequently involved using old advertising methods to find connections.

Other similar processes have begun to pop up across major markets, including flash sale sites.

Selling Wine Through Flash Sales

  • The Internet has truly disrupted how you remember three-tiered distribution. Just in the last few years, you’re seeing flash sale sites for distributing wine become a hot market. All of this works by direct shipping, something that’s growing in America, despite some states not allowing it yet. Through flash sale sites, retailers can negotiate prices with local wineries or breweries. In turn, this helps lower the price of alcohol distribution, which passes on to the consumer.

Digital Marketplaces

  • Similar digital technologies like online marketplaces (something Amazon has delved into) lets retailers be able to sell these beverages through e-commerce. Direct importing works similarly by selling directly to consumers. The only drawback is importers have to buy several sub-licenses to pay taxes normally owed during three-tier distribution.

Finding a Digital Solution for You

Since the three-tier distribution system works for all manufactured products sold to wholesale distributors, what kind of digital technologies have you invested in to make this work easier?

Here at Ivy Mobility, we offer enterprise and mobile software solutions to help make the consumer goods and distributor industries upgrade to more convenience. Along with access to data and the capabilities to report on key metrics, you’ll have everything you need to become a participant in disrupting the old distribution system you once knew.

Visit us at to find out more about our solutions.

Published by March 14, 2023 by Ivy Mobility

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