Beer Wholesaler of the Year Award
Playbook for Success
By: Terri Allan
Barry Andrews speaks like an inspiring football coach. “Success begins with the team you put on the field,” the veteran Texas beer wholesaler says. “If you have a team that’s properly trained, with tremendous, passion, commitment and dedication to the business, you’ll always have an opportunity for success.”
Andrews, whose company is Market Watch’s 2013 “Beer Wholesaler of the Year,” believes other beer distributors can share in the success. “The future is bright for wholesalers who are committed to the business and are able to run their operations efficiently and effectively,” he says. Andrews adds that when obstacles get in the way, distributors must be flexible, or in football parlance, “they’ve got to call audibles.”
The executive is in a good position to give advice on running a beer distributorship: Dallas-based Andrews Distributing Co. is regarded as one of the top 10 beer wholesalers in the country. Combined volume for the company’s two Texas operations is projected at 28.3 million cases this year, up from 27.9 million cases in 2012. Sales revenue is expected to reach $660 million in 2013, according to Mike Barnes, a 30-year veteran who serves as executive vice president and general manager of the North Texas division. That increase is a 5-percent jump from $626 million last year.
Andrews Distributing represents 31 suppliers—including MillerCoors, Crown Imports, Heineken USA, Gambrinus Co., The Boston Beer Co. and New Belgium Brewing Co.—in 38 counties in northern and southern Texas. In total, the distributor carries 901 SKUs comprising 125 product families and has some 1,100 employees, who serve a total of 9,500 customers, including 4,000 on-premise accounts. That number is a more than tenfold increase over the customer base that the company had 20 years ago.
In the last few years, Andrews Distributing has seen a boon in new accounts as many formerly dry areas in northern Texas have gone wet. Don Jaresh, the company’s vice president of marketing services, says that in just the last few years alone, the distributorship has picked up 1,600 new off-premise customers and 900 on-premise accounts. He notes that chains are becoming an even bigger factor in the North Texas beer market, especially in newly wet areas. “The big chains continue to build and be very aggressive,” says Jaresh, who started working on a truck for Andrews Distributing in 1986. He notes that chain locations have accounted for nearly 1,200 new accounts for the company in just the last few years. Multi-unit liquor store operations, such as Spec’s and Total Wine & More, are also a growing factor, Barnes adds.
Unlike many of today’s beer wholesalers, Andrews didn’t grow up in the business. He and his former partner Tom White purchased a small Miller Brewing distributorship in his hometown of Corpus Christi, Texas, in 1976, followed by additional beer houses, including operations in Dallas and Denver. Andrews was attracted to the beer business for a number of reasons, including “the people, the equipment and what beer stands for,” he says. “I also liked the involvement that beer wholesalers have within their communities. It looked like an exciting business to me.”
The partnership split up in 1994, and Andrews retained the Dallas and Corpus Christi businesses. Then in 2003, Andrews dramatically increased his beer holdings with the acquisition of Willow Distributors, a Coors house in Dallas. As demand for craft brews has increased in recent years, Andrews Distributing has added a number of craft beers to its portfolio.
Andrews says that his company’s mission is to be “the nation’s leading beverage brand builder measured in valuable growth.” He adds that multi-brand distributors are able to offer a better selection to retailers. “It gives you a lot of options regarding beer placement on-premise and off-premise,” Andrews explains.
In addition to a strong portfolio of beers, Andrews Distributing has benefited from the dynamic Texas market, particularly in the northern part of the state. Company president Mike McGuire, who is Andrews’ son-in-law, points to the market’s growing population, an unemployment rate that’s lower than the national average and a consistently strong demand for beer. “We’re in the best market in the best state,” McGuire says.
And the growth is going to continue, McGuire adds, with North Texas projected to add one million people within the next six years. He also notes Hispanic residents are expected to account for more than 50 percent of North Texas’s population by 2030. These trends are driving gains for Mexican beers like Modelo Especial and Dos Equis. According to Jaresh, Andrews Distributing expects to sell more than 2 million cases of Modelo Especial this year, after breaking the 1-million-case mark in 2010. He adds that the company is the country’s largest distributor of Dos Equis, with sales of 1 million cases last year.
Craft brews are also on a tear. Barnes says that crafts are growing at a 15-percent rate for Andrews Distributing. “We will continue to invest in crafts to ensure that we have the best possible portfolio, as well as having the most educated people in that segment,” he notes. “We’re bullish on craft.”
Technology has played a dramatic role in Andrews Distributing’s evolution. “From a sales standpoint, technology—and particularly our mobility platform—has allowed us to be more aggressive and to handle customer solutions with data-based selling,” Barnes says.
In fact, the company’s growing chain clientele has forced a reevaluation of its sales organization and have changed the way products go to market. “We now have more innovative selling models based on market segmentation, consumer types and retailer types,” Barnes explains. “We’ve brokered a lot of change so that we can be more strategic and consistent.” McGuire adds that the recent changes to the sales division have allowed Andrews Distributing to help retailers make sense of the market by analyzing criteria like consumer shopping occasions and consumer demographics. “We’re completely customer-centric in our focus,” he says. “It’s all about getting our retailers’ beer business growing.”
Andrews Distributing’s marketing services staff works closely with retailers on p-o-s and event programming. Jaresh points to the company’s own “Love Beer” effort which allows retailers to consolidate brand messaging via an umbrella theme. For example, Andrews Distributing can feature all of its craft seasonals together for an impactful display at retail. The company also regularly works with its customers on a host of events, including beer dinners, food and beer pairings, and samplings. Jaresh notes that beer festivals have been growing at a rapid pace in Texas, and the distributor is an active participant.
In addition, Andrews Distributing seeks to educate on- and off-premise beer retailers about the sensory aspects of beer, malt beverage styles and proper beer service. To date, the company employs two cicerones, as well as 230 certified beer experts, and its 2-year-old “Beer Ambassador” program also encourages employees to visit breweries first hand. According to McGuire, the company’s employees have made more than 500 visits to breweries ranging from the local Miller plant in Fort Worth to Ballast Point Brewing & Spirits in San Diego.
Andrews believes that his well-trained staff is a big asset to retail customers. “Our people can offer advice to retailers based on what is happening in the marketplace,” he says. “With cicerone training, they can talk intelligently about beer and styles. Because of this training and culture, we can provide a great service to the retailer in starting, building and developing his or her beer section.”
Beer wholesalers today are “more knowledgeable than they were in the past because consumers are becoming more sophisticated,” Andrews says. He’s seen numerous other changes in his nearly four decades in the business. “When we started out, we had just five or six SKUs and we had one supplier,” Andrews says. He also points to the impact that consolidation has had on both the supplier and wholesaler tiers. In the 1970s, there were around 400 beer distributors in Texas. “Now, that number is down to about 70,” he says, adding, “I don’t feel like it’s game
over.” Andrews cites the impressive growth of segments like light beer, imports and crafts over the years. “There are so many new styles and categories of beer,” he says. “I believe we will see more innovation in the next five to 10 years than we would have ever dreamed would happen.”
While recounting all that his company has already accomplished, Andrews looks optimistically to the future. Beyond the opportunity that existing markets offer, he confirms continued interest in expanding his business, as long as the acquisition makes sense. “We have strong members of our team who are capable of running or operating another distributorship,” Andrews explains.
Charitable giving is a big part of Andrews’ mission. “I’ve always believed in heavy involvement in the communities where we operate, whether it be civic, social or political,” he says. “We want people to know that Andrews Distributing is a company that cares.”
With 38 years under his belt, Andrews takes pride in the business he helped build. “I’m proud of our people and what our company stands for,” he says. “I think our best years are yet to come.”