Read this letter about alcohol (distribution) over your fave holiday drink🍸
Thesis check done, Encompass Technologies, leave your number on a post-it note
Hi guys, I did not expect to be away from kiki’ing for so long, and for that I’m sorry. Life got in the way - I was deep in recruiting for post grad jobs for the first two months of the school year. After getting a job (I am moving to Boston!! Hit me up if you’re based there I would love to make new friends), I was grinding out my thesis (link if you’re curious). Apart from that, I have just been enjoying senior year and cherishing every minute. Freshman me cannot believe that we are entering my graduation year.
Some pictures from the semester:
Onto the holiday edition kiki!
THE MAIN KIKI - ALCOHOL DISTRIBUTION
This past summer, I interned on Apax Partner’s consumer/internet deal team. One of the portfolio companies I worked on was a whiskey distillery, which allowed me to learn about the alcohol space, one of the most regulated consumer industries.
The spark notes are that if you want to sell alcohol in the US, there’s a very specific way to go about it. The US operates a “three-tier system”, which is a regulatory framework created after Prohibition ended to control the production, distribution, and sale of alcohol. It’s basically a set of rules that separates alcohol producers, distributors, and retailers into their own distinct roles, and aims to prevent monopolistic practices and facilitate tax collection. To break down the three tiers:
Tier 1. Producers: alcohol manufacturers (think breweries, wineries, and distilleries). These guys make alcohol but can’t sell it directly to stores or bars.
Tier 2. Distributors: middlemen who buy alcohol from producers and sell it to retailers. This middle step ensures that there’s a clear checkpoint for tax collection and keeps the market fair by giving smaller producers a chance to compete.
Tier 3. Retailers: the last step of the value chain that sells alcohol to end consumers (think bars, restaurants, liquor stores, grocery stores). Retailers can only buy from licensed distributors, not directly from producers.
A company operating in the beverage management software space is Encompass Technologies. They are an Enterprise Resource Planning (ERP) system for the beverage industry, servicing all players in the alcohol value chain - that is producers, distributors, and retailers - with cloud solutions for warehouse management, inventory tracking, deliveries, payments, and data collection.
In classic Jackiki fashion, I’m going to give you three things I like about Encompass:
Encompass is creating a centralized platform that touches every piece of the value chain
By embedding itself deeply in each stage, Encompass becomes indispensable as the one-stop-shop. The more companies rely on it, the harder it is to switch to another solution (hello, high switching costs).
It also leverages marketplace dynamics - the more stakeholders at each tier, the more valuable the platform becomes for everyone. This positive flywheel effect helps Encompass scale, with 2,000+ manufacturers, 660+ distributors, and 562,000+ retailers on board.
Leveraging complex regulatory environment to acquire customers
The three-tier system gives Encompass a unique edge, where signing up just one distributor means gaining access to the thousands of brands and retailers those distributors work with. Smart customer aquistion strategy if you ask me. Work smarter not harder.
On top of that, the complex regulatory environment creates high barriers to entry for competitors while opening the door for future expansion opportunities. For example, it is much easier for Encompass to expand into other beverage subsegments/food distribution, than for a food distributor to break into highly regulated alcohol distribution.
Unlocking the power of data
By digitizing tracking and sales, Encompass creates invaluable datasets on shipments, sales, and demand trends, which help manufacturers forecast production better. Tools like this would have been especially helpful to navigate retailer destocking after the pandemics’s alcohol boom.
This reminds me of Shein’s demand forecasting I wrote about a few months ago.
I’m excited to keep watching the alochol ERP space.
THINGS I’M LOVING RIGHT NOW
Yale society bios: I recently gave my bio to my society, which is essentially a powerpoint presentation about your life. One person presents every Sunday night. It was special to reflect on all the life experiences that have culminated into who I am today. I had a lot of fun sifting through old photos and videos, and reading through my countless journal entries to relive certain moments.
Leaving your number for someone on a post-it note. During finals week, I basically lived in Starr (reading room in our library), and one day I came back from lunch to find this mysterious post-it note on my desk (see pic). For a few hours it was perhaps the best thing ever, because who wouldn’t love a post-it note like this… That bubble sadly burst when I found out he was a freshman. I sent him this text and laughed about it. But I loved the forwardness, and I am going to leave my number on a post-it note for someone in the new year (join me). My favorite part about this whole experience was doing detective work to find out who he was, and getting a great tip on it being Luigi. (If you’re reading this mystery person reach back out to me in like 8 years)
SZA’s new music video starring Ben Stiller who lip-syncs to her song “Drive”. There’s something about a grown white man pouring his heart out to SZA’s lyrics. I loved watching movies starring Ben Stiller as a kid, and recently just finished season 1 of Severance which he directed.
Otaru takeout.
and I order Otaru occasionally simply because we deserve it.
That’s Jackiki 10 (mini milestone alerttt)! Happy holidays and see you in the new year <3
xx
Jackie
I love you Otaru for life
waitttt i read both this newsletter and Ad Hoc separately why did i never realize you were both connected irl love that