Dec 132016

schlitz-ice-boxThe week after I arrived in Wichita, Kansas to take the lead at Coors of Kansas, I had to replace my operations manager.  I brought in one of my former Coors NE employees from San Antonio to assume the role of operations manager.  He did a great job in that role.  At the end of the year, one of the owners, R.D. Hubbard, bought out the other owner, Terry Scanlon.  Dee had big plans and started buying out other Coors operations across the country, the first being Hutchinson, adjacent to Wichita.

The plan was to run the Hutch market out of Wichita, but not immediately, thus leading me to find a branch manager.  Considering all aspects of running that plant, I moved the Wichita operations manager to Hutch, thereby creating another hole to fill.

The Coors of Kanas operation was a large volume operation for Coors selling around three million cases a year.  This volume ranked CKI as one of the top five volume houses for Coors.  We moved a lot of product, so the operations manager needed a strong logistical background.  As luck would have it, I had moved my family into a neighborhood close to the warehouse. One of my neighbors, Carter S. Huber, turned out to be the ideal candidate for that position.

At the time, Carter was the Emery Air Freight General Manager for Wichita.  His professional background made him a perfect fit for CKI, and in addition, Carter was a Vietnam veteran.  He had been deployed overseas shortly after graduating from high school and served in the Army for a two year tour of duty.

As we all know, our country’s treatment for returning vets was much different after the Vietnam War than it is for today’s vets returning from a deployment.   Carter returned home to Kentucky to attend the University of Kentucky, where like at many colleges in those days, the anti-war movement made life difficult for returning vets.  Carter later joined Emory and was transferred to Wichita.

Carter liked the idea of working in the beer industry so it did not take much convincing from me for him to join us at CKI. Within the year I had decided to buy Texas Beers and left Kansas, taking Carter with me.  He ran the operations at Texas Beers. Carter’s professional and military background was ideal for Texas Beers. At the time, we were losing our Schlitz business and worked hard to stay ahead of those trends.

After I sold out and left, Carter took over as head of Texas Beers.  Texas Beers continued to hemorrhage volume and in five years the operation was sold and Carter left to join the Miller operation, Valley Beverage, where he managed the imports.  Once again, fate jumped in, and as Miller Lite continued to lose share, as Schlitz had some years earlier, Valley Beverage was sold to Glazer’s.

Carter was made Branch Manager by Glazer’s and with the addition of Glazer’s spirits, wine and beer, it made their Valley operation a giant.  After many years of overseeing this operation, and 35 years in the business of selling beer, Carter S. Huber retired this spring.

Carter is the personification of a beer guy: professional, nose to the stone, and always a team player.  As a veteran, Carter was ideally suited for the industry, and I was fortunate to have worked with him for so many years.  Carter and his wife, Libby, still live in the Valley where Carter spends time at church and on the golf course.  Carter S. Huber, the Kentucky Colonel….

BBU Honor Roll;

2016 – Carter S. Huber – Schlitz/Miller

2015 – Albert Jaenicke – Hops

2014 – R.D. Hubbard – Coors Distributor

2013 – George Henricksen – Royal Imports

2012 – Diane Fall – Warsteiner


 Posted by at 6:00 am
Dec 062016

modelo-especialWhen wholesalers only represented one brand such as AB, Schlitz, or Coors, brand owners were always under the gun to produce the results expected of them by their brewery.  As the years passed, however, wholesalers, fearing termination for any reason, ensured franchise legislation was passed making termination by their supplier difficult, if not impossible.

Consolidation, at both the brewery and the wholesale levels, has done more to ease the influence of any one supplier than could, in past years, be used to force a wholesaler to do something for which they did not agree.  The recent craft beer rise, coupled with the merging of the major suppliers, has abated that, giving the wholesaler more control of the discussions.

The declining sales of the top two companies, ABI and MolsonCoors, have again changed this model.  Where initially AB, Coors, Schlitz, and later Miller, drove their wholesalers through threats, intimidation, withholding of funds, pulling back of p-o-s, crew drives, and other means of intimidation, there is now a new 400 lb. gorilla on the block.  That gorilla is Constellation Brands.

For decades, under the leadership of Bill Hackett, both Barton Beers and Constellation Brands, have led their wholesalers by developing a friendship formed by the vendor. In addition, Hackett has another policy, whereby he does not change the effective marketing strategy of the brand.  Bill took Barton Beers from a small western importer to a national, major brewer.  First by consolidating the Gambrinus Modelo territory and next, overseeing the changing model from importer to brewer. This was accomplished at the same time ABI had purchased Modelo, but divested it in the U.S. market.  Bill did this while continuing to see Modelo trends grow at double digit rates.

Few, if any, major heads of importers had the wholesalers’ respect more than Bill Hackett!  But like all things in life, Bill has now stepped aside and turned over the keys to new leadership.  Recent IRI numbers show that Constellation is now the number one high-end company with a 25% share followed by ABI with now a 24% share.  Remember too, that the entire Constellation portfolio is considered high end.

Constellation believes that it will soon be the number-one gross profit vendor in 40% of their volume with distributors who are 70% MolsonCoors and 24% ABI and 6% other.  Constellation is open and upfront with their method of approaching distributors. Their EVP recently stated: “We can get more out of this, we can get them to invest more, co-op more, and give us more priorities on a monthly basis.”  The beer industry has heard these statements before, word for word, from other fast growing brewers.

So the question becomes: will Constellation go the path of other suppliers before them with increased demands on wholesalers while riding the success of the wholesalers? Or will Constellation continue their current model that brought them the success they are experiencing today?  One way will endear them to their wholesalers, the other way will eventually turn the wholesalers elsewhere.  It is a road well-traveled, but by whom?

Hogs get fat, pigs get slaughtered.

 Posted by at 6:00 am