Many distributors would rue the day they turned down the opportunity to distribute Modelo products in the early to mid-1980s. In fact, once Corona became a viable import, many of the distributors who had once declined the offer, made a quick reversal and aggressively pursued the brand. Some distributors were successful, but many were not, as those distributors who had taken on the brand were reaping the potential benefits of Corona.
As has been discussed in past posts, I acquired Corona through an acquisition when I owned Texas Beers. At that point in time, the beer was in a brown bottle, and because my distributorship was on the US-Mexican border, the packaging made sense. Once Corona switched to the clear, long neck bottle, the brand’s sales jumped.
Bill Hackett, who was then the sales manager for Barton Beers, and I spent hours discussing the potential of Corona. As with many current and past wholesalers, Bill has always maintained great relationships with the distributors.
By the mid to late 90s, it was clear that for Corona to continue its growth, the brand’s distribution needed to increase. Both Barton and Gambrinus introduced Corona 12 packs and soon other package extensions were also presented. One by one, many of the wine and spirit houses, including the Julius Schepps Co. in Dallas, sold the Modelo distribution rights to the beer network. Even in those days, the case multiples, which seemed so high, are now considered a joke when looking back at the brand’s unbelievable success.
Most of the current Modelo distributors are in the blue network, but there are many distributors who are not in the blue or red network that do have Modelo. One could make the case that without the Modelo portfolio these houses would have sold out years ago. Because of Corona’s success, many distributors hung in there long enough enabling them to sign many upstart crafts who today are established and important beers.
As the sales manager, and later President of Barton and Constellation Beers, Bill Hackett knew that for Corona to become a viable brand, it was important to establish strong relationships with the wholesalers. Bill, probably more so than anyone in recent years, was the leader at relationships.
Constellations recent decision to move their portfolio from their long-established wholesaler, Markstein in San Diego, to Reyes, caught the industry by surprise. The move by Constellation, however, should not surprise anyone who has been in the industry for any length of time. It is simple, Bill Hackett knew that Barton needed the wholesalers more than the wholesalers need Barton. Today, it is just the opposite, given the recent trends of AB and MC, the Modelo wholesalers need Constellation more than Constellation needs them.
Constellation is doing exactly what a highly successful brewer does: line extensions, new beers, buying multiple forms of media, sponsoring all types of professional sports, staffing up, chain domination, and on and on to include wholesaler realignment if they believe they can benefit from a change. Tighten your seat belt, more is yet to come.
We built a business on relationships, and that’s what matters to us…