Jan 162018
 

The Julius Schepps Co. of Dallas, a very successful and large wine and spirit house, made the decision to sell in early 1997.  Although Schepps was predominately a wine and spirits house, they did have a very impressive beer portfolio, including the Modelo brands: Shiner, Guinness, Moosehead and other fine imports and specialties.

The wine and spirit company, now known as Republic National, bought the majority of Schepps W&S brands. Schepps offered the entire beer portfolio to the Miller network.  Miller at the time, and still today, is headed by Andrews of Dallas and the Cranes of Ft. Worth.  The other network, Coors, is was at the time headed by Willow of Dallas and Coors of Ft. Worth. The AB house, Ben E. Keith, was exclusive AB at the time so they were out of contention for the brands.

As a buyer, this portfolio was a slam-dunk. Corona and Shiner were on fire. But the main reason this was such a good buy was because Schepps operated as the personification of a wine and spirits house.  Schepps’ service, outside of the package stores, was at best, spotty, especially in the c-store channel.  Both Miller and Coors could literally pay for the brands in a very short time by simply servicing the market, something which Schepps had not previously done.  The demand for these beers was there, the retailers and consumers did not have access to the brands.

For reasons never explained, the Coors distributors dropped out of the negotiating process, allowing the Miller network to buy the Schepps portfolio.  As a result of this action, the Coors wholesalers sold out to the Miller wholesalers within just a few short years.  Today, Andrews is the MC distributor in much of north Texas.

In 1997, Corona was the real prize in the deal.  All the other Modelo brands, Corona Light, Pacficio, Negra Modelo, and Modelo Especial, were no more than bolt-ons.  The marketing strategy was to deeply discount the Corona 2/12 bottles in an effort to drive distribution and sales.  This two-year marketing program was highly successful.  Andrews, excited about Corona, put all the distributor’s efforts behind that brand, and their secondary focus was Shiner Bock, another brand which was also on fire at the time.  Low hanging fruit.

Soon, Gambrinus began to make Modelo Especial a focus brand. Initially, however, Andrews, was pushing back, but they, too, eventually began to also focus on Modelo.  Within two years of the acquisition, Andrews experienced some success with Especial in the Hispanic grocery accounts and independent c-stores. These stores were predominantly supported by Mexican Nationals, consumers who drank Especial in cans in Mexico and wanted the same in the US.  Modelo bottles could be found only in Mexican restaurants.

In spite of the wholesaler’s reluctance to focus on Especial, and with very little marketing support from Gambrinus, it was not long before Modelo took off.  As 2017 came to an end, Andrews set multiple new-volume records with Modelo.  After 20 years, Especial now sells four million cases a year!  Especial, which is much bigger than Corona, is still growing

Especial was just another brand, once thought to be no more than a bolt-on brand. But it became a gold mine for the distributor.  Had the Coors network been successful in buying this portfolio instead of the Miller network, it is certain that the shoe would have been on the other foot.

If you never try, you’ll never know what you’re capable of.

 

 Posted by at 7:00 am

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