The Generational Investment Cycle Is Here—It’s Great for the Industry and Encompass (and our record first half of the year)

Summer is always a good time to take a breath and reflect—especially in the beverage alcohol industry. The first six months of 2025 are in the books, and while plenty of folks smarter than me are out there sharing sharp takes on consumer behavior shifts and macroeconomic trends, I’ll stick to what I know: technology, software, and how markets evolve.

After three years in BevAlc, I’ve learned a great deal from our customers, partners, and prospects. Without question, this is a truly unique market. And I’ve been consistent over the past six months in signalling that we’re seeing a change in mindset, especially among distributors. The signals have been clear: in a lower-growth environment, there’s a rising need for efficiency, profitability, and financial resilience. Distributors are preparing for the next chapter of beverage—and it’s showing up in real ways.

I can report with certainty that the signals and hypothesis are proving out.

In a challenging environment for the industry overall, Encompass just experienced a breakout first half of the year. The wave of customer and prospect conversations we’ve had over the past 6 months has turned into real momentum—and record growth.

We saw new sales increase by nearly 75% in the first half of 2025 compared to the same period last year - that is frankly incredible. To be clear, we have experienced steady growth for many years, but this is something different. This is an inflection point—and it’s being driven largely by new customers choosing to join the Encompass network.

What’s the dominant theme in these conversations?

• It’s time to modernize.

• It’s time to get more efficient.

• It’s time to retool.

I believe we are witnessing the beginning of a true Generational Investment Cycle.

This generational cycle is unique to BevAlc compared to my past experience in other technology markets. The multi-generational aspect of our industry is real, and the shift in market conditions is driving organizations to reassess their technology strategy for the next generation. Ownership transitions and workforce changes are certainly accelerants to this dynamic, but the efficiency imperative is the true driving force.

This is a classic “built to last” moment, where organizations are looking to reengineer themselves to be ruthlessly efficient, more nimble, and position themselves for every growth opportunity - and technology modernization is rightfully being seen as a critical success factor going forward.

What makes it even more interesting is that we are seeing this mentality kick in across the industry with smaller, regional wholesalers, mid-to-large enterprise distributors, as well as major consolidators all joining the Encompass family. Across the board, organizations are stepping back, reevaluating their technology strategies, and making serious moves to rewire for the next era.

In other industries I’ve worked in, this kind of broad market recalibration is much less dramatic. But BevAlc has always marched to its own beat. The multi-generational nature of ownership is real. This moment—this convergence of efficiency imperatives, market shifts, and ownership transitions—is prompting real investment across the board.

Equally important, our growth is not just being driven by new customers. We’re also seeing our existing customers double down on the Encompass platform - examples include:

• OrderIQ, our new AI-powered suggested ordering solution, has been incredibly well-received.

• Platform extensions like our new Mileage Tracker solution are drawing strong interest.

• eCommerce adoption is accelerating—DSDLink is expanding fast.

This aligns perfectly with what I shared at BevAge: Our commitment to helping our customers simplify and consolidate their technology infrastructure as well as their technology spend. That vision is coming to life in a meaningful way.

And throwing accelerant on the Generational Investment Cycle —Recent tax legislation (i.e. OBBBA)

I’m no tax advisor (let me be clear), but if you dig into the recently passed legislation, there are two key incentives that can help every distributor offset the cost of modernizing their operations:

• 100% Accelerated Depreciation – Deduct the full cost of qualifying warehouse automation investments (like WMS upgrades, robotics, conveyors, etc.) in the year they go into service.

• 20% Federal Investment Tax Credit (ITC) – A direct 20% tax credit on those same investments. That’s real, dollar-for-dollar reduction—not just a deduction.

My trusted “tax consultant” ChatGPT ran the math: on a $100K investment, those two incentives could mean $41K in Year 1 tax savings. That’s real money—and a real incentive to modernize. This kind of policy tailwind only accelerates the Generational Investment Cycle.

So yes, we are living through challenging times in many respects. But they are also incredibly exciting. At Encompass, we’re fortunate to work with amazing customers and a world-class team. And the platform we’ve built—purpose-built for the beverage industry—is hitting its stride at the perfect time.

This moment we’re living through is special. As the Encompass network continues to grow, the opportunities only become more compelling. With the Generational Investment Cycle now clearly underway, the next 2–3 years are shaping up to be transformational—for Encompass, for our customers, and for the industry.

#onward #modernize #rewire