Beer Business Unplugged

My first assignment, 20 years ago when I joined Glazer’s, was to oversee the statewide rollout of New Belgium for which the distribution rights had been awarded to Glazer’s. Texas was New Belgium’s fourth state with the brewer already having a presence in Arizona, New Mexico, and of course, Colorado. 

Glazer’s felt that New Belgium was going to be the key brand the distributor needed to build a world class malt portfolio. Even without any internal malt structure, and a delivery system not built for beer, the first order for New Belgium products consisted of 20 trucks of bottles and three trucks of kegs. New Belgium did not have the cooperage to fill that first order so they postponed the rollout date until New Belgium could fill the kegs.

That first year Glazer’s sold more than 500,000 cases without a malt infrastructure, without cans, and with only three brands and no single serve packages. Had this all been in place, it is not unrealistic to think 750,000 cases could have been sold. New Belgium started with only two rangers in Texas and one did not last long.

New Belgium has had great success with their sales footprint; yet like Glazer’s, both entities were attempting to find their own way in the beer industry. As New Belgium grew they encountered multiple challenges including hiring experienced beer managers, while simultaneously ensuring the cultural integrity of their founders.

By 2008, Glazer’s entire view of the beer industry had changed. The distributor began selling off their beer brands in markets where they had no Miller/Coors houses. Other distributors were more than happy to pick up New Belgium along with a multitude of other fine brands including Sierra Nevada and numerous imports. Glazer’s, however, kept the fine brands in their core MC markets.

New Belgium expanded across the country, hired top beer people, and soon became employee owned. Many of the employees were invested after just one year and remained with the brewery. In recent years, New Belgium built a world-class brewery in North Carolina to service the east coast, but this created a huge debt load.  After growing to becoming the fourth largest craft brewery in the U.S., New Belgium appeared to have hit a wall with their growth, and even though the brewery has begun to grow again, the employees decided to sell to Kirin’s Lion Little World in an all cash transaction. You can rest assured the New Belgium employees had a good weekend.

The acquisition of this craft brewery by Lion is just the most recent purchase of a major U.S. craft brewer by a foreign brewer. Others include: Laginatis, Founders, Anchor, and to name a few, all acquired by non-U.S. brewers…and why not? The U.S. and Canada are where the world goes to get gross profit. China, India, and Africa have people, North America has money.

Over 300 current and past New Belgium employees will divide up over $190 million from this sale, and with Lion’s global resources, their professional careers look secure.

Treat employees like partners and they act like partners.

Last week it was announced that the boutique wine, spirit, and beer company, Artisanal Beverage Distributor, is being acquired by Ben E. Keith in Dallas. The small, successful portfolio of Artisanal will ensure BEK’s ability to build their new spirit division in the distributor’s non-AB footprint markets across the state of Texas. 

Artisanal Beverage was founded by long-time industry veterans, Mark Monfrey and Jeff Daniels just five years ago. Prior to owning Artisanal Beverage, both Jeff and Mark worked together as beer importers. Mark’s uncle, the legendary John Monfrey of San Antonio, was one of the largest Falstaff Distributors of his time.  Monfrey was also employed with Miller Brewing and Molson. Prior to the creation of Artisanal Beverage, Mark had been employed with Pyramid Brewing, but in an effort to cost-cut, Pyramid moved Mark from the role of employee to that of consulting; a realignment which subsequently started Mark on the road to creating his own consulting and importing company.

Jeff Daniels was a longtime employee of Glazer’s and eventually assumed the role of state beer manager. Like Mark, Jeff found upward mobility at Glazer’s to difficult and made the life-changing decision to join Mark in the consulting and importing business. Not a bad move for two dispatched managers.

The story of Mark and Jeff is not uncommon in the beer industry, as there are many with similar accounts. “Sam,” a seasoned sales manager for Glazer’s in El Paso was also dismissed from the company. He was soon discovered by a German beer importer and excelled in his work with chains, a move which did not go unnoticed by Republic National. “Sam’s” love of the wine industry led him to accept a position with Republic where he now holds the title of Senior Vice President and he is a key member of management.

After a successful stint selling wines with Republic, “Sue” made the transition to Glazer’s as a member of their beer selling team.  She later transition into Glazer’s training division, but soon thereafter, hit the glass ceiling,  Upon leaving Glazer’s,  “Sue” joined an eclectic training company, accelerated their program to new heights, and purchased the business.   She built the establishment into a training powerhouse with renowned corporate clients including Ford, Target, American Airlines, and AT&T.  “Sue’s” business continues to be highly successful today.

The professional stories of these four individuals have one factor in common: companies who will not, or cannot, identify their employees’ skill sets and talent, lose them and the talented individuals move on to become highly successful in their chosen fields.

Booming brands can cover up a company’s lack of talent and leadership, however, when said brands begin to slide, the leadership gaps surface. Mark, Jeff, Sam, and Sue, had they been given the opportunity at Glazer’s or Pyramid, could have made a difference. Unfortunately for their former employers, it did not happen.  The irony of the story is that none of these individuals looked back; they are not bitter at their previous companies, in fact, they are grateful. If they had not been treated in the way they were, the four may not have become the success stories they are today.  

Motivation will always beat mere talent.