As a wine, beer, or spirits producer, it's no secret that you're operating in a crowded marketplace. Statista states in 2021, there were 11,000 operating wineries in the United States alone, and since 2009 the number of wineries in the country has grown by over 50 percent. Craft brewery and distillery numbers have also significantly increased. With this uptick in competitors - it's time to dig in, know your competition, and strategize how to stand out.
IDENTIFYING YOUR COMPETITION
Knowing who your true competitors are is more complex in a digitally global economy. There are three types of competitors to watch out for:
Direct competitors are businesses that offer similar (or identical) products or services to the same market with similar distribution models. For example, two natural wine producers targeting millennials through ecommerce sales channels.
Indirect competitors are businesses in the same category that sell different products or services OR offer the same products but have a different business strategy. For example, one beer brand is strong in social media, and the other capitalizes on national distribution.
- Replacement competitors are businesses that offer an alternative to your product or service. In this case, customers use the same resources to purchase the replacement they could've used to buy your offerings. For example, distilled spirits could appeal to the same wine target market.
There are many ways to understand your competitors. We prefer to use tools like MOZ's True Competitor to identify our customer's competitors and the websites that compete in the same Search Engine Results.
COLLECTING THE DATA
Once you've identified your competitors, it's time to get your detective hat on and do some research. You'll want to take inventory of as much information as possible around their:
- Products (What are they making, how much they are producing, and the quality)
- Customers (To whom they are selling it)
- Pricing (How does their pricing compare to yours)
- Sales (Primary sales channels: direct to consumer, distribution, a mix)
- Customer Service (How well do they treat their customers)
- Promotion/Advertising (How are they promoting their products)
How do you access this information? There are many methods to track a business' footprint. Some key avenues are through their website, social media, Google search, and online reviews by utilizing tools such as:
- Ahrefs - Analyze a website's link profile, keyword rankings, and SEO health. You can also find keywords your customers are searching on Google, YouTube, and Amazon.
- SimilarWeb - See competitors' top traffic sources, broken down into six major categories: referring sites, social traffic, and top search keywords.
- SEMRush - Discover how competitors generate traffic, reveal your competitions' top products & offers, examine market shares, and assess organic and advertising tactics.
After you have collected all the information you can, compare your competitors to your own business to see how you stack up. We recommend conducting the tried-and-true SWOT analysis.
USING A SWOT ANALYSIS
A SWOT analysis is a versatile business tool that determines performance, competition, risk, and potential for an industry, company, or product line. Using external and internal data that has been collected will carve out strategies likely to be more successful than others, or it could advise on if a new product line might be strong or weak and why.
A SWOT analysis will consist of four categories:
Strengths - describe what a business excels at: a strong brand, loyal customers, cutting-edge technology. For example, a competitor might have been founded by a celebrity with a prior existing large following.
Weaknesses - inhibit a business from performing at its optimum. These are areas where there is room for improvement to gain a competitive advantage: a weak brand, poor customer service, or no social media presence.
Opportunities - refer to favorable external factors that could give a business a competitive advantage. For example, if a state dismantles a liquor control board and opens up private sales, it's an avenue for a company to open a new or more advantageous sales channel.
Threats - warn on factors that have the potential to harm the business. For example, weather threats to a region during vintage could reduce crop yield. Other common threats include rising costs for materials, increasing competition, or a tight labor supply.
Not all businesses will be known for, or are good at everything - and that's ok. Not knowing where those strengths and weaknesses lie - is not ok. A proper competitive analysis brings to the surface external and internal factors that can prevent you from reaching your business goals. It can also help you see what resources you have to execute an opportunity or forecast what might prevent you from seizing that opportunity.
P.S. Would you like Bloom to do the research for you and assess how you stand out in a crowded marketplace? We're here to help. Get in touch with our team of seasoned creatives at Bloom Studio.