Oct 152019
 

While at the NBWA convention, wholesalers are offered the opportunity to attend a multitude of seminars on Monday and Tuesday mornings from 8 to 9:30.   Distributors can sign up to go to the seminar of their choice, unfortunately however, due to time constraints; it is possible that one cannot attend all the desired discussions. This year’s convention was no exception. 

One workshop offered was led by Joe Verno, one of the founders of The Denver Management consulting group. Denver Management has been in existence for a long time and in the 70s and 80s, their focus was on converting wholesaler driver sales to pre-sales for many distributors. At this year’s NBWA Joe and his son, now consultants in the family business, Verno Consulting, discussed what they believe are 40 things wholesalers should stop doing. Last week Beer Business Daily highlighted these same 40 issues outlined by the Vernos. The subject matter covered all segments of a wholesaler’s operation including, but not limited to: training, delivering, sales, talent, and vendor relations.  The top 40 areas that wholesalers should avoid outlined by the Vernos should be eye- opening to many wholesalers, although many may bypass these important points saying, “It’s not my operation, we are a step ahead of all of these points, my business is doing very well.” 

The wholesalers who are fortunate to have White Claw, Truly, Constellation, or Ultra in their house only have to look at their bottom line and smile. Using technology, almost all wholesalers have improved their overall operations and logistics while adding a number of new vendors and now, many carry non-alcoholic products.

It is clear that the Vernos are saying to wholesalers: While you are growing, are you sacrificing the long-term for the short-term? It was also clear that the Vernos see obvious wholesaler short comings including: internal structure, lack of talent, bench depth, and training. There are good odds that when questioned, almost all vendors would agree with that position.

On the reverse, wholesalers see the same issues with many new or recent vendors. Both parts of the industry hire to fill a void, not for leadership, experience, and growth. Both sides will make a point of not being able to find the right talent which is only an excuse. Talent is out there, but to obtain the best, both parties have to step up. The talent gap between wine and spirit companies and beer companies can be eye-awaking, especially when dealing with mid-management areas.

Expect to see more on the 40 key metrics outlined by the Vernos in the coming weeks. Or, one can always contact the Vernos directly for more information on this topic, for a fee, or course. 

Thank you, Captain Obvious.

 Posted by at 6:00 am
Oct 082019
 

The beer industry has an old adage that holds true even today:  A full truck is a happy truck! In the days when the deliveries were all driver-sales and the wholesalers represented only one supplier, it was the driver who loaded out the truck. An experienced driver would typically return to the warehouse with an empty truck. He knew when, and how, to load the truck according to the day and/or the promotion. Of course, during these times, the industry was using eight bay trucks to deliver beer, and reloads were not uncommon on big drop days. The advent of 16 bays and bigger trucks put an end to the reloads.

Fast forward to today and the technology on beer delivery has totally changed. Wholesalers have learned to maximize their delivery; however, what still remains relevant is what the industry calls, golden cases. The true definition of a golden case is dollars floating to the bottom line on high margin crafts or imports (maybe seltzers) with little or no investment from the wholesaler. This model works well for wholesalers. If a brewery closes its doors, for any reason, the wholesaler only loses those golden dollars.  And as we know, closings are becoming more and more common today. On the other hand, if a golden case grows and the vendor begins investing behind their brands, at what point does a golden case become a golden brand? What metrics must a wholesaler identify when this transition happens? How much does the wholesaler subsequently increase their commitment?

When Truly and White Claw hit the market, one would suppose both were nice golden cases and the rapid growth of both brands quickly turned them into golden brands. Truly and White Claw are owned by major breweries with their own professional sales and marketing teams, and both products have the backing of wholesalers. Many golden cases, however, are from local or regional breweries without the support needed to become golden brands. So, the question arises: Is the transition from golden case to golden brand the result of volume or something else? Volume would be the easiest metric, but what would that number need to be? 50K cases or more? Does it include an across-the-board advertising and marketing support program? Perhaps all of the above are necessary to make the shift from golden case to golden brand.

What happens if all of those key components are in place, yet the wholesaler still looks at the brewery as nothing more than a golden case? How does a vendor view themselves with the wholesaler? Often the vendors see their brands as golden brands while the wholesaler still views the vendor’s brand only as a golden case.  Therein lies the problem.

I believe in the golden rule, the man with the gold… rules!

 Posted by at 6:00 am
Oct 012019
 

In the 1970s, it was common for most medium to large size cities to have a local beer wholesaler association, in addition to their state association. There were even some strong regional beer associations, including the Rocky Mountain Conference of Beer Wholesalers Assoc. Most wholesalers had only one supplier. Most markets would typically have an AB, Miller, Pabst, Schlitz and Coors distributors along with regional houses, like Lone Star and/or Pearl house, which was the case in Texas. In the northwest, the regionals might have included Olympia, Rainer, and Henry’s. Other parts of the country had their own regional houses, as well. There could have easily been six or seven wholesalers in any given market. All of these associations turned to the National Beer Wholesalers Association for a national presence. As the years went by, however, and the consolidation of the beer industry became a way of life, most of the local and regional beer associations disbanded, leaving only the state associations and, of course, the NBWA.

In the 70s, the national NBWA convention’s political focus was on fighting deposit legislation, while the convention show concentrated on vehicles and delivery equipment. At the time, convention conversations often centered on Coors’ eastward expansion. Interested wholesalers would locate Coors wholesalers who could provide them with information to assist with their Coors distributor applications.

By the 1980s, the convention moved to highlighting imported beers, mostly European breweries, who were interested in expanding into the U.S. Wholesaler consolidation had not yet impacted the overall attendance at the convention, the suppliers conducted wholesaler meetings during the NBWA. Because wholesalers typically had only one vendor, many major breweries hosted their national golf tournament and other events during the convention.

By the 1990s, Pabst and Schlitz were almost gone and the rise of crafts and the Corona “miracle” became a national topic of discussion. Multi-brand beer houses became the norm which resulted in more hospitality rooms and dinners, thus enabling the vendors the opportunity to entertain their wholesalers. Some vendors, like Diane Fall of Warsteiner, invited key volume wholesalers for a private limo pub crawl across Vegas. At each casino Diane handed the wholesaler a $100 chip and a Warsteiner. The evening typically lasted until sunrise. Many other vendors also had their own unique evenings.

The NBWA frequently featured a beer segment that was particularly popular during the given time frame and provided that segment with a special section on the floor during the convention. The NBWA created the craft beer sections which enabled craft breweries to feature their respective beers while, at the same time, enabling conversation with current and potential wholesalers. This style of presentation was popular for years.

This year’s recent convention was a real eye opener for those who have attended the NBWA for decades. The massive three room exhibition hall featured seltzers, ciders, CBD, Hemp, and alcoholic infused waters. It seemed as though one had to really look for the beer segment. In one seminar, the presenter graphed the number of suppliers a beer wholesaler represented. This graph illustrated that the average wholesaler had 61 vendors, but a mere 30 were beer vendors.

The question is: does this indicate the direction the industry is taking or does this indicate the reason that beer sales have been losing share of stomach to other beverages?

Perhaps it is time to call the NBWA, the National Beverage Wholesalers Assoc. and drop the word “beer.” Some people seem to think so. 

 Posted by at 6:00 am