How Top Shelf Used Data To Generate Insights, Expand Sales and Margin
Established in 2014, Top Shelf is Australia’s largest and fastest-growing premium spirits company. Top Shelf’s ambition is to create high-quality, authentic Australian spirit brands where each brand in its own distinctive way embodies an unmistakably Aussie taste and attitude.
They’ve re-energized the Australian spirits market by creating a portfolio of iconic Australian spirit brands, each uniquely delivering a value proposition of craft quality at an accessible price. By the end of 2020, Top Shelf had listed its shares on the Australian Securities Exchange and was one of the fastest-growing companies in the country. In its boldest move yet, Top Shelf has planted more than 500,000 agave plants in Eden Lassie Creek, Queensland for a new Australian Agave spirit.
In 2021, Top Shelf asked Steve Hibbard, a veteran software executive, to review its technology and digital strategy. Very quickly, he discovered that the company didn’t have the date it needed to manage this growth.
“There was quite a lag between when something happened and when we knew it happened,” Hibbard says. “And there was a lot of information that wasn’t available at all. “In a business that was evolving very rapidly, you had people making decisions without the facts they needed.”
Even worse, the limited data the company has was taking up too much time to collect.
“All of the reporting was being done in Excel spreadsheets and was very time consuming,” Hibbard says. “We had very talented people who could be using the information to develop deep insights into our business who were spending their time producing reports, week after week, month after month.”
Too many data sources
For a small company, Top Shelf had a lot of information to keep track of. It has four different distribution channels, each with its own systems: bars and other venues, retail stores, direct to consumer, and exports. In each channel, the company needs to track the distributors, its salesforce, and the establishments that sell its products.
“If we sell a thousand cases to a wholesaler, we need to get data on who bought them and what price they paid,” Hibbard said. “Then our representative can go visit those venues to make sure people are buying the product.”
In addition, the company needs to monitor the data from its manufacturing operation.
“Distillation has all sorts of different ingredients,” Hibbard says. “You’ve got to keep track of what you bought, and what you’ve used, and how much finished product you have.”
The 5x Solution
To Hibbard, it was clear that Top Shelf needed a data warehouse and analytics capability.
“We needed more than a basic business intelligence tool,” he says. “We need to organize our data so we could develop insights that would give them an advantage over their competitors.”
What wasn’t clear was who would build it.
“There wasn’t a readily available solution,” he says. “We didn’t have the resources within Top Shelf to do it. “And the local consultancies and dev shops would take a long time, cost a lot of money, and require someone else to manage the implementation.”
Then Hibbard was introduced to 5X, which had the experience, technology, and people to build the infrastructure Top Shelf needed.
When we came across 5X, it was perfect,” Hibbard says. “Their value proposition is around scale,” he said. “They can build a scalable data infrastructure and bring in high-quality accredited engineers with all the necessary skillsets.”
Top Shelf was also able to save money and time while acquiring the software tools it needed for the project.
“If you want to go do this yourself, you have to sign like five different vendors. And it takes six months just to set it up,” Hibbard says. “5X got us very favorable pricing from the vendors and simplified everything into one bill.”
The team assigned by 5X first learned about the information needed by each of Top Shelf’s business areas. It identified the myriad sources of that data, some of which were quite challenging to deal with.
“Liquor wholesalers have been operating the same for the last 40 years, and they are a bit technology resistant,” Hibbard explains.
Nonetheless, 5X was able to ingest all the data and prepare it for use very quickly.
“In projects like this, the critical step is verifying and validating the data until the numbers make sense,” Hibbard says. “That usually takes many months, sometimes years. We got through it in three months.”
- Data warehouse integrating information from finance, manufacturing, sales, and four distribution channels
- Business intelligence dashboards for key business functions
- Forward-looking models to support business planning
The reaction was “just wow”
In November, 5X delivered the first dashboard, a view of Top Shelf sales by channel and price. Hibbard says it’s already making a difference.
“As we become more successful, we need to understand who is buying what, how are they buying it, and what are they paying for it,” he says. “Having insight at a higher level all the way down to an individual customer level can allow the business to improve gross margin.”
The speed at which 5X was able to generate useful information surprised Top Shelf’s leaders, who had been skeptical about the project.
“The reaction among the guys leading the show was, ‘just wow,’” Hibbard says.” They thought it was going to take 12 months and distract the entire organization before we could get anything helpful.”
“5x has proven to be a very nimble partner with a huge amount of IP and experience in this space,” Hibbard adds. “Without them, this would have been a more difficult, longer, and more distracting project than it has been.”
A data-driven future
The engagement has worked so well that Top Shelf has added a second full-time offshore engineer from 5X.
“We have new requirements in our business all the time,” Hibbard explains. “The 5X engineers are top-quality resources who have gotten their heads around our business, so they can react to our needs very quickly.”
The next project is to build dashboards that can monitor other aspects of the business. After that, they will build forward-looking models to support planning.
“Two years from now,” he adds, “the big benefit will be having a very data-driven approach to product development, salesforce training, pricing, and other decisions of the business. That should lead to higher margins and faster growth.”
Head of Risk and Data at Bank Novo