Automating Fulfillment in the Alcoholic Beverage Industry

The traditional conveyor systems that have long been the backbone of wine and spirits distribution are facing a pressing challenge. For decades, these “Franken-systems” have combined mechanization, manual labor, and intensive efforts to handle delicate and costly cases to fuel industry growth. However, extensive mergers, acquisitions, and enhancements to this outdated model have brought distributors to a crossroads where further improvements to alcohol fulfillment are increasingly challenging.

Now, the industry stands at the threshold of a crucial upgrade, with a growing inclination towards robotic automation. In its 2022 Global Industrial Robotics Survey, McKinsey highlights that industrial companies are gearing up to make substantial investments in robotics and automation, with a significant portion of these funds allocated to the “food and beverage” sector.

Similarly, beer distributors are grappling with labor shortages and the complexities arising from an expanding range of product SKUs driven by the growing demand for craft beers and specialty beverages. While diversifying product offerings is advantageous for customers, it introduces challenges in inventory management, requiring enhanced storage and retrieval processes for slower-moving items and grappling with reduced storage capacity.

For beer as well as wine and spirits distributors, expanding product lines and brands translate into larger systems, but these systems risk lower efficiency due to their piecemeal, highly complex nature. Meeting the demand for increased functionality can only be achieved through the adoption of robotic automation, which conserves costs, time, and labor resources for alcoholic beverage fulfillment.

A Long-Awaited Transition

The wine and spirits distribution sector has long been ripe for the implementation of robotic automated storage and retrieval systems (AS/RS). A visit to a typical “modern” wine and spirits distribution center would surprise outsiders with the extensive use of conveyors for buffering and transporting products, the complexity of these systems, and the continued reliance on labor-intensive processes. This reliance on manual labor is evident in physically demanding tasks such as transferring cases onto and off of conveyors and picking split cases.

The significant complexity of mechanization in such systems necessitates a substantial initial capital investment and results in a high cost of ownership. Furthermore, it offers relatively poor reliability due to numerous potential single points of failure. McKinsey notes that activities such as packing, sorting, and movement, which are already somewhat automated, will continue to see heavy investment in the coming years.

Automating Long-Term Solutions

Today, traditional warehouse distribution practices are straining the outdated components of the process. An extensive reliance on conveyor systems leads to challenges in maintaining mechanization, making warehouses susceptible to delays and supply chain issues. The lack of streamlined simplicity in these systems requires more specialized labor, leading to increased expenses. Additionally, the physically demanding nature of manual labor makes recruiting and retaining capable individuals a challenging endeavor.

Fortunately, distributors embracing robotic automation solutions bypass a significant portion of these challenges and position themselves for enhanced resilience. For instance, one of the largest beer distributors in the United States, with a growing spirits brand portfolio, is strategically focusing on integrating robotic AS/RS technology into their operations. Their deployment of the Exotec ® Skypod® system through Hy-Tek Intralogistics has yielded remarkable results:

• Increased case picking and replenishment capacity to 900 cases per hour with three stations.
• Access to all stored SKUs within two minutes, regardless of location within the system.
• Automatic pick-to-order for cases, along with delivery in the appropriate sequence to a “top off” station for shipment.
• Maximization of vertical space in the facility with high-density storage racks reaching the ceiling.
• Elimination of the need for pickers to walk several miles per day in search of goods or engage in strenuous lifting or bending.

This transition led to advantages in both labor and warehouse utilization rates for their alcoholic beverage fulfillment. Labor productivity and availability increased as workers required less training and specialization of tasks. Additionally, the automated systems enhanced warehouse space efficiency by implementing 34-foot-tall storage racks, each equipped with 24 levels of storage.

Success Awaits

Beer, wine, and spirits providers are at a pivotal juncture, where the choice to embrace robotic AS/RS technology will determine their future competitiveness. Companies incorporating robotic automation for their alcoholic beverage fulfillment, like the Exotec ® Skypod® system, enhance their resilience against existing industry constraints and set the stage for continued growth. These innovative systems, by reducing labor dependence while boosting productivity and optimizing warehouse space, position businesses to meet ever-changing market demands now and into an unpredictable future.