Dec 182018
 

Lone Star Brewing Co. was like many other successful regional brewers in the early 1970s. With the onslaught of AB, Schlitz, Miller, and Coors, Lone Star was losing volume and market share. At the time, Harry Jersig, the founder, owner, and boyhood friend of LBJ, decided to change things up and brought in a number of executives from Schlitz and other national breweries.  Harry felt a change was needed to ensure Lone Star’s survival and competitive nature in the marketplace. One of the executives that Harry hired was Ray Teutsch, who he appointed as Lone Star’s Sales Manager.

At the time, I was a route supervisor for the Julius Schepps beer division, which had Lone Star.  After about seven months on the job, Schepps decided to cut their supervisors from five down to three and, being the youngest, the company felt it would be easier for me to find a job elsewhere, so I was were laid off.  Shortly thereafter, I had lunch with Ray in San Antonio, and within a week had been hired as a district manager for West Texas. A year later, when the current district manager left, Ray moved me to Dallas.  This put me back in charge of Schepps.

Lone Star was touting the redneck rock music and the reintroduction of the Lone Star Longneck bottle and the brand was on fire.  In spite of numerous meetings that Ray and I had with Schepps, the company continued to resist investing needed funds into the beer division to ensure adequate service to the market.

Schepps had made George Schepps, then close to 80 years old, in charge of their beer division.  George had a professional background in owning and managing professional baseball teams. It soon became clear that George was spending his days at the Ranger’s ballpark instead of helping sell beer.  Being a longtime friend of Harry Jersig, George used that relationship to protect his job.  George complained to Jersig of being targeted by Lone Star and Jersig responded by having Ray remove me from the market.

At this time Ray suggested that I decide how best to deal with this turn of event and that he, Ray, would support my decision.  I asked for, and was granted a meeting with Jersig on a Friday.  During the meeting, Ray stood next to me and supported my actions with facts and details of Lone Star’s successes in DFW.  Ray also filled Jersig in on all of Schepps’ actions and ended the meeting by suggesting a new wholesaler might be the better option in Dallas.

Jersig relented, and I was back in Dallas.  Within several months Ray and I had persuaded Schepps to agree to a sell-out. Schepps sold to Billy Bob Barnett (Billy Bobs of Texas, which is another blog) and Steve Wooster, the former All-American football player for Texas.

I soon left Lone Star for Schlitz and shortly thereafter, Ray also left Lone Star for Standard Sales of West Texas.  Ray became President of Standard Sales, an AB distributor with operations in Texas, Colorado, and Mississippi.  Ray ended his successful career at Standard and retired to a ranch in central Texas.

To this day, I am grateful for the support Ray provided me. He could have easily moved on without me, but instead, he stood with me and provided support.  It was a very powerful lesson for me and one that I have never forgotten.  Ray’s actions spoke to his character.  Ray Teutsch, the rancher.

2018 – Ray Teutsch – AB Distributor

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 2018.  I WISH EACH OF YOU A HAPPY HOLIDAY SEASON AND A MERRY CHRISTMAS.  NEXT POST WILL BE ON JANUARY 8, 2019.  

Geoff

 

 Posted by at 7:00 am
Dec 112018
 

Just a couple of weeks ago, the University of North Carolina announced it had hired Mack Brown as its new head football coach.  Coach Brown had previously been the head coach at NC, but left that position for a 10-year stint to the University of Texas. While at UT, Brown experienced a great deal of success, including winning a national championship in 2005.

After the announcement that Brown would return to the University of North Carolina, a sportswriter wrote a column in which he explained why Brown had left the university and why he, Brown, had now decided to returned.  During those years at NC, Coach Brown had built the school’s football program into a powerhouse, even in competition for a conference title.  Brown was twice undefeated with 10-win-seasons but had no success beating Florida State University which had runs for the national championship.

The thrust of the writer’s article was that Coach Brown had improved the football program to the point that fans, alumni, and administrators had unrealistic views of where that program should be, given that the university did not provide the resources to NC that were available to Florida State and Alabama.  Coach Brown bolted to Texas and the NC program has struggled since.

During the years I ran Warsteiner Importers Agency, our ultimate goal was to grow the brand to the size of Beck’s, a competing import from Germany.  Beck’s, at that point, was almost two and a half times larger in the U.S. than Warsteiner.  We were, however, able to make some progress until the end of 2008. At that time Warsteiner decided to increase prices and cut marketing and staff.

Despite the cutbacks, the talk continued as to why Warsteiner had to play “second fiddle” to Becks.  While I supported the goal to grow Warsteiner to the size of Becks, I reiterated the point that I needed the financial investment to reach those volumes.  The brewery’s response, however, was always the same: if you want that support, generate it internally in the U.S.

Ten years later, Warsteiner is still half of what it was in 2008, this time, however, with more internal issues than before.  Warsteiner, not unlike the University of North Carolina, did not understand the success they were experiencing at the time.  One could say that neither Warsteiner nor the University of North Carolina knew what they had until it was gone.

Coach Brown will return and will now face more realistic expectations from the NC.  Ten wins a year is truly a good season, and it appears the fans, alumni, and administration have come to accept that fact.  Warsteiner, along with many crafts and other imports have yet to reach this point of realization.  No doubt it is, and should always be, a goal of all brands to grow.  One needs, however, to have realistic expectations.  There is only one Corona!

Wholesalers continue to hear from their suppliers as to the size they desire their brand to, but is such a goal always realistic and achievable?  More likely it is not.  The rush by craft breweries to increase in size is one of the main reasons that this segment struggles today.  Had these owners been realistic when considering the investment, we might not be where we are today.

You are not defeated when you lose.  You are defeated when you quit!

 

 Posted by at 7:00 am
Dec 042018
 

In the 1960s, Willowbrook Distributing warehouse, used by Coors of Dallas, was considered an upscale building.  The facility was large, the trucks were able to load indoors, the warehouse temperature was controlled and there were rail sidings.  The warehouse also provided multiple offices, a break room, locker rooms, a hospitality room, a check-in area, and of course, executive offices.

Until this time, I had little knowledge of the differences between beer warehouses.  While at Lone Star, I had two distributors whose warehouses were actually old barns.  Both warehouses were similar with a couple of pallets of beer and a forklift.   There was an Oklahoma distributor who operated out of a former railroad station.  The trucks would pull up alongside the passenger docks and the beer was hand loaded onto the vehicles.  Obviously a great deal of manual labor was involved.

In Chicago, a number of the current beer warehouses still have roots dating back decades with little to no updates.  This is difficult to understand considering the onslaught of new brands, flavors, and SKUs.  In today’s high tech market, warehouses are computer driven with little that remotely resembles the beer facilities of 50 years ago.  Interestingly, the one exception to this rule is the beer pallets, which remain basically unchanged.

A four year old West Texas AB house is a great illustration of a state-of-the-art beer warehouse.  The storage area is computer operated, the temperature is controlled with high tech equipment, and the facility boasted all the bells and whistles one could imagine.  And, of course, the warehouse was built with future growth in mind. Interestingly, when taking a tour of the facility we discovered that the sales department was dark and empty. It was also immediately apparent that the modern-designed desks were not in use…there were no computers, no phones, no papers, no p-o-s, no glasses…empty.

The only people in the building, outside of the warehouse, were the reception and financial staff in the front of the facility.  The most heavily used portion of the building; however, was the new gym and workout facility installed by the distributor.  The distributor indicated that the gym was most heavily used by the staff during the early mornings, late afternoons and on the weekends.

The question in today’s beer industry is what will the modern beer facility look like and how will it function?  It is obvious that a sales department, now automated, is out selling.  There is no need to go into the warehouse, except for meetings.  Will such an arrangement be sufficient going forward?  Should the empty desks be removed and a game room added?  Maybe provide a ping pong table, a couple of X Boxes and big flat screen TVs with overstuffed chairs and music.  Many of the companies who want to attract younger, educated Millennials are modifying their offices to meet this generation’s expectations.

It is safe to say that parts of the beer industry are slow to change, warehousing, however, is not.  Companies have to keep up with industry trends and this should apply to their current and future employees.

The future belongs to those who prepare for it today.

Editor’s Note.  Attention all former Schlitz employees and Schlitz Distributors: The family of James Haire is searching for a booklet created by Jim during his tenure at the Schlitz training institute years ago.  The booklet is approximately 20 pages in length with a plastic cover complete with Jim’s photo.  If you have a copy, or know where one can be located, please let us know.  The family would like be most appreciative.

 

 

 Posted by at 7:00 am