It is certainly safe to say that today’s beer wholesaler is not your father’s beer wholesaler! Long removed from the wholesale model is the small mom and pop middle tier representing one brewery and one, maybe two brands. If mom and pop planned it correctly, and had a little luck, they are now living large in Palm Springs.
Just like the breweries, these little mom and pop operations consolidated over the years. First, consolidating within their own footprint, which was usually their local town but continued brewery consolidations, along with the industry pundits and consultants who advocated driving costs out of the system, wholesalers continued to consolidate.
Wholesalers went from local, to regional, to statewide, and in many cases today, multi-state. Volume wise, these multi-state operations are huge and are selling tens of millions of dollars in cases of beer. Just 25 years ago while heading up Coast Distributors, we were ranked in the top 10 volume beer companies, selling only 5.2 million cases. A total that today might be considered an average size at best and even small by some! Times have changed!
Given the upcoming acquisition of SABMiller by ABI, the question now becomes just what will the US beer wholesalers look like in the coming years?
Even today we have essentially two mega wholesalers per market: the AB house and the MillerCoors house. The larger the market, the better the chance there will be other wholesalers such as wine and spirit houses. Or perhaps the development of an extension of a large mega house with some small crafts and imports and/or some craft/import specialty houses will develop. This is, of course, not counting any craft breweries that are self-distributing.
Even prior to the upcoming merger, one can make a case that there really were no AB or MC houses. Many MC houses have brands owned by ABI including Stella, Becks, and Bass, not to mention the Modelo products. You can say the same about the AB houses too, Anchor houses, notwithstanding.
Already there is some discussion as to what to call the new ABI/SABMiller Company even when the AB name is dropped. This is simply incredible when one thinks that this just might happen.
As volume for AB and MC continues to decline, say to a point where they only become 25-30% or less of a wholesaler’s portfolio, then would a wholesaler change its sales structure to mirror what the wine and spirit houses have done? Would they create internal sales teams for those suppliers? As an example of such, a salesman could only have an AB pad. Or perhaps same house could have sales teams by pads, (e.g. the Modelo pad, the craft pad, the MC pad or the import pad.)
As the sales shift continues in the US to more imports and crafts, ABI is growing by acquiring other companies and wholesalers are growing by adding crafts or buying other wholesalers or brands. If ABI feels the need to change their name to reflect the new company, perhaps wholesalers who are AB should consider dropping any name referencing AB, including Eagle Beers or Brands. Wholesalers could be moving to Beverage or just House of Beers.
As ABI evolves, so do their wholesalers. What is good for ABI and MC is good for all wholesalers. Remember, diamonds are only lumps of coal who stuck to their jobs!