Dec 122017
 

By the mid 70’s, due to the continued success of the brand, Coors Brewing Company’s expansion into the southern half of Texas focused on two key must haves.  One must have, was naming wholesalers who were either sports idols, political icons or other famous people within the brewery’s major markets.  The other must have, was to ensure all of the brewery’s wholesalers would attain the volume necessary so as not to cause a problem for Coors.  The Dallas distributor, in the 70’s, sold three percent of Coors’ total business.  Coors appointed five wholesalers in the Houston area, and four wholesalers in San Antonio.

All the newly awarded wholesalers in South Texas were startups that distributed only Coors.  The distributorships were awarded the brand in the summer of 1975, with the opening projected to be in 1976.  Some appointed wholesalers included: Bob Lily in Waco and Roy Butler, the former major of Austin.

There were four wholesalers appointed in San Antonio, one of whom was Charles M. Duke, Jr. the 10th man to walk on the moon.  Charlie, at that time, was a colonel in the U.S. Air Force Reserves, having been educated at the U.S. Naval Academy, MIT and eventually joined NASA as an astronaut.  Prior to becoming an astronaut, Charlie was a fighter pilot, stationed around the world.  Charlie and his partner, Richard Boushka, had originally applied for the Austin market, but when offered the northeast San Antonio market, Charlie agreed.

Charlie Stidham, who had been awarded the Coors Southwest San Antonio market, recommended that I join Charlie Duke’s team and run the operation.  I soon joined Duke’s team as VP of Sales.  Charlie had no beer industry experience, and really no business background, but during his tenure as the Coors Northeast Distributor, Charlie’s celebrity status attracted a multitude of visitors ranging from movie stars, athletes, astronauts and politicians The hospitality room, a common feature of distributors in the 70’s, held a multitude of famous individuals all coming to meet the 10th man to walk on the moon.

We were once visited by Tommy Nobis, the linebacker from the Atlanta Falcons, who grew up in San Antonio and had gone to The University of Texas.  Nobis had just retired from pro football and wanted a public relationship job with Charlie’s distributorship.  Charlie considered bringing Tommy on until I said that I thought Charlie, himself, was our PR person, which is what Charlie was!

Once we opened the business and settled in with a 13% share of market, Charlie seemed to drift away.  I always wondered if someone as accomplished as Charlie could be challenged by running a small Coors distributorship.  I felt that someone with a resume as outstanding as his would have been bored.

Coors Northeast did well, and we were awarded the highest grade Coors had given to any start-up operation at that point. The company was always profitable.  That being said, after only two years, Charles sold the business to the Azar family of El Paso in the spring of 1978.

Charlie continued on in the Air Force Reserves and eventually retired as a general.  He started a speaking career and was heavily involved in the church.  He and his wife, Dottie, have lived in New Braunfels since their Coors days.

The moon man…

2017 – Charles M. Duke, Jr. – Coors Distributor

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

THIS IS THE LAST POST OF 2017.  I WISH EACH OF YOU A HAPPY HOLIDAY SEASON AND A MERRY CHRISTMAS.  NEXT POST WILL BE ON JANUARY 2, 2018.  

Geoff

 Posted by at 7:00 am
Dec 052017
 

Do products or breweries have a life cycle, or does a brand manager have the life cycle?  Perhaps it is not the brand manager, but it is the CEO or Board of Directors that has a life cycle?  Ask the many regional brands from 50 years ago, or ask Schlitz or Coors about life cycle.  Yes, even Coors.  What happened to these fast growing and popular beers who hit the skids and either died or became a memory?

Schlitz and Coors were riding high in the 1970s, but then crashed.  Budweiser and Miller Lite took off like a rocket and maintained that momentum for many years.  Miller slowed some years ago. Budweiser, well we know that story and what has happened the last ten years.

We have seen brands and breweries come and go.  It is inevitable, and is once again happening.  The recent numbers from California indicate there is another brand coming to an end.

Thru the first half of the year, Constellation brands were up +14%, while AB and MC were down three percent.  What makes these numbers even more astonishing is the fact that AB and MC depletions were down seven percent and between five/six percent, respectively.  It has been estimated that both companies have lost 10% of their business in the last two years.  It could mean a total loss of up to 800,000 bbls. this year!  This finding is astonishing considering that 20 years ago, AB and MC had 85% of the California market.  This year they will come in at 50%, a drop of -35%.  AB has lost over 2.5 million bbls.

Through the 7th of October, in the state of California, Constellation has surpassed AB in terms of dollars.  In dollars, Constellation is now the number one brand in off-premise scan data!  Constellation has jumped 11%, and its share rose +2.9%, while AB numbers have dropped seven percent with a share loss of almost two percent, falling to 26%. This is verses 26.9% held by Constellation.  Consider the magnitude of the losses given that AB owns Michelob Ultra, a hot brand.

What is even more remarkable is that there are over 850 craft breweries in California!  In San Diego alone, there are 150 tap rooms possessing an estimated six percent share of the on-premise market!  Further impacting the market is the fact that that five of the top 10 crafts are down, with four of these crafts down double digits.

Does California, in 2017, look like the other states in 2020? Will Constellation be the dominate brewery along with hundreds of craft breweries and taprooms?  Will AB and MC continue to lose market share?  Will Constellation dominate the chain real estate?

Unless something very out of the ordinary takes place, the US beer industry should take notice of California, if they have done so already.  A wholesaler with Constellation brands is sitting pretty, but if not, then what?  Consider this scenario:  Constellation attains a 50% share of a major market, add in the taproom craft business, along with the business from other crafts.  How much, then, is left for the non-Constellation wholesaler?

There is much speculation in regards to the craft breweries and their future survival.  Perhaps there should be a similar discussion on the future of non-Constellation wholesalers?  If the trends in California continue and spread across the country, these wholesalers could follow distributors of the past,     Distributors like Schlitz and Coors, to name a few, who have come, and sadly gone.  Consolidate or become a minor player.

The future is purchased by the present…

 Posted by at 7:00 am