The Golden Age
By JENNIFER ZEGLER
Gold Coast Beverage Distributors dominates the Miami market
Miami is home to pristine beaches lined with palm
trees, the South Beach party scene, salsa and meringue music such as Miami
Sound Machine, and even television’s “Golden Girls.” While the setting has its advantages, the challenge lies in appealing to a
complex market that includes tourists, Hispanics and retirees.
Gold Coast Beverage Distributors, Beverage Industry’s Wholesaler
of the Year, has become the largest distributor
in Florida on the strength of a portfolio that is as varied as the
area’s consumers. In 2006, the company sold nearly 22 million cases
from its portfolio that includes Miller, Coors, Corona and Heineken as well
as craft beers, Latin beers and wine brands.
Its market occupies the state’s southern tip
with a territory stretching across Broward, Monroe and Miami-Dade counties,
which are all served by local warehouses. In addition to Miami, Gold
Coast’s customers stretch from Fort Lauderdale to the Florida Keys.
The unique aspects of the market work well with its mix of brands, explains
Eric Levin, vice chairman in charge of acquisitions, strategy and political
“We’re in a very favorable area of the
country,” Levin says. “Sales are strong at all times of the
year, South Florida’s population is growing and we’ve enjoyed a
growing demand for higher end products. We’ve been successful at all
levels within the industry. Our high-end imports are doing well; our
economy imports are doing well; our premium domestic business is doing
well; and even our sub-premium business is doing well. This is occurring
within all of our sales divisions, which cover our diverse population
The success is shown by Gold Coast’s leading
market share in the area. The dominant market share is a result of an
emphasis on service to its more than 7,000 customers, the company says.
“Our organization is driven by great employees
that have a lot of passion. We’re very competitive and we’re
very proud,” says Art Friedman, president and chief executive
From ruts to riches
Gold Coast has not always been in the top position in
the Florida market. In August 1996, current Chairman Stephen Levin
purchased Gold Coast, an acquisition he had been trying to make for eight
years, explains Eric Levin, Stephen’s son. After the purchase, Levin
and his family, which had a long history in the beverage business, realized
the prospect was more daunting than originally thought.
“[Gold Coast] was in pretty bad financial shape
when we bought it and it took us a long time to turn it around,”
Levin says. “After [my father] purchased the business, we soon
discovered how bad things were. Had he known, he might not have bought it
Despite the initial struggles, Levin says, “It
took us two years to turn it around — two years before we made a
The road to profitability required a major overhaul.
As one of the first steps under the Levin family, Gold Coast placed a
renewed focus on its personnel. Friedman is the only member of management
personnel remaining from pre-sale, Levin explains.
When Friedman took over as president and chief
executive officer at the end of 1998, the company also received a new
strategic plan. At the time, the company’s portfolio starred
potential money-makers, Heineken, Corona and Coors products.
“During my tenure, we really started growing
with the success of Corona, Heineken and even some of our smaller imports
like Beck’s,” Friedman explains. “I think the biggest
difference that I have found was not only taking that portfolio and
understanding how to leverage it in different classes of trade, but getting
people to buy into the whole vision.”
The enlivened spirit was led by an analogy: “How
we coined it in the first phase was, ‘How do you eat an elephant?
It’s one bite at a time,’” Friedman says.
“We’re going to chip away and chip away as if you’re
eating a whole elephant.” The mantra led to pay-off.
“We finally got the organization to understand
what it felt like to win,” he adds.
Friedman, who has been in the beer business for more
than 20 years, also took the lessons he learned from his early days and
instilled the value of service into Gold Coast’s new team.
“I am the first chief executive officer the
company has ever had that started out in the streets,” Friedman says.
“I think it’s important if you’re going to run a business
like this to really understand what drives it — from a retail
standpoint, a supplier standpoint and an employee standpoint. We have a
saying today that is very relevant to how we go to market and it boils down
to what I learned from my first week on the job, ‘If your customers
had a choice, would they buy from you?’”
He explains that ‘you’ is accentuated to
mean the individual employee, not the company overall. The high value of
service has helped Gold Coast go a long way, explains Alfonso Fernandez,
chief operating officer.
“We changed quantity for quality,”
Fernandez says. “[In 1996,] we had the right portfolio, but we
didn’t have the right system or the right people. We don’t
produce anything, but our biggest asset — other than obviously our
inventory — is the people.”
To boost its portfolio, Gold Coast acquired two local
Miller distributors in 2001 and 2002. In 1999, Gold Coast only held a 26
percent market share, and currently the company is enjoying 64.6 percent
Corona, Heineken and Miller contribute around 75
percent of Gold Coast’s profitability, Friedman says. Imports make up
nearly 58 percent of the volume. The popularity of imports in Gold
Coast’s market has encouraged growth. The company distributes nine of
the Top 10 imports sold in its local market,
including Presidente, Beck’s and Hollandia.
Although the Miami and Fort Lauderdale marketplace is
dominated by imports, both Miller and Coors have made headway recently,
“The imports have really been the driving factor
of our business for the past nine to 10 years,” he explains.
“We’re going into our third consecutive year of growth with
Coors Brewing Co. and our Miller business looks like it’s going to be
the same situation with three years of straight increase for our Miami
operation and two years for Pompano [Beach].”
While Miller Lite has a following in the area, one of
the company’s strongest Miller brands is High Life. The brand is
popular with Hispanics, Friedman says, which is a demographic that also
helped Coors grow recently. Coors’ sponsorship of the National
Football League, as well as its cold-focused marketing campaign offered a
masculine appeal that increased its popularity within the demographic.
Friedman says. Coors’ Blue Moon also is performing well.
Another domestic company that has reinvigorated in
South Florida has been The Boston Beer Co. The Samuel Adams lineup is part
of Gold Coast’s small craft division, which is only 1 to 1.5 share in
South Florida, Friedman says. Yet, the lineup brought excitement to the
bubbling craft market
“Crafts never developed, even during the
boom,” he says. “We had them in the market, but they just
didn’t do well. We’ve expanded our
portfolio to a lot of [Samuel Adams’] flagship products, and the
Boston Beer Co. is growing close to 40 percent this year. That’s
pretty dramatic because it’s not like all of a sudden we just put the
brand into the market, and this is the second year of double-digit growth.
This growth is due to consumer awareness, supported by consistent retail
Gold Coast’s craft division also has found
success with the addition of Flying Dog beers. Flying Dog has grown through
word of mouth and a unique partnership with a local dog racing track, where
the brand is featured as part of a “Flying Dog at the Dog
Even with the growth of those brands, one success
story stands out in particular.
“Heineken Premium Light has been a nice addition
for us because it hasn’t cannibalized Heineken,” Friedman says.
“Heineken Light has really helped to grow the beer market a little
bit but it’s also been a trade-up.”
Another recent introduction, Miller Chill, has been
slow to take off. Gold Coast is now working with Miller to create a more
localized marketing campaign.
“Miller Chill has been a nice addition to our
portfolio,” Friedman says. “We haven’t had the rate of
sale as other wholesalers, but it’s been well-received. The reason
that we’ve had a challenge is that Miami Hispanics don’t really
grasp the chelada; South Florida is about mojitos. So we have a little
challenge because anything that’s viewed as being somewhat slanted
toward Mexican Hispanics doesn’t work all that well for us in our
Mastering their market
Gold Coast’s marketing challenge lies in
appealing to its unique market demographics, says Christina Cioeta Borger, vice president of
marketing. Miami’s population is quite varied: 88.2 percent is
non-white, and of those, 19.9 percent are African American and 65.8 percent
are Hispanic, according to the Living Cities report on Miami, based on the
2000 census. Within the Hispanic population, 51 percent are Cuban. The
remainder hail from Caribbean and Central American nations.
Balancing their brands’ national marketing
campaigns and creating local ones is a challenge, Borger explains. When
applicable, the company executes its brands’ national programs,
especially when accompanied by media support. Yet, the make-up of the
area’s Hispanic population can present a roadblock. Most national
campaigns are catered to Mexican Hispanics, which are not a majority in
Gold Coast’s area, she says.
“Here, Mexicans are less than 1 percent of our
total Hispanic population, so we do a lot of local marketing, working with
some local agencies,” Borger says.
The diversity of South Florida’s population also
varies by location in the market. Imports have a 70 percent share of market
in Miami, explains Felix Williams, executive vice president. In the north,
around Fort Lauderdale, preferences are split between 60 percent import and
40 percent domestic. The company is seeing markets change as ethnic
consumers move away from metropolitan Miami as well.
Knowing which brands will succeed in particular areas
is left to individual salespeople. Each salesperson focuses on a lineup of
seven brands in his or her territory, Friedman explains. Across all
divisions, the Top 3 suppliers are standard: Corona, Miller and Heineken.
Those brands take priority during holiday promotions and special marketing
opportunities. The salespeople then have the remaining four slots to fill
with brands that perform well in their respective territories.
“We have a lot of small suppliers, brands that
might be niche, but we try to make sure that we target distribution and
programs based on where we’re going to be successful,” Friedman
Following the strategic plan Friedman implemented, the
company set its own goals before the suppliers’ incentive programs.
If a salesperson makes Gold Coast’s goals, they are qualified for
incentive programs, Friedman explains.
Putting the company’s goals first also presents
an advantage to its smaller brands because it allows them entry into a
market year-round, instead of only at the time of an incentive. For brands
that are new to Gold Coast, that can be an advantage, Friedman says, but
not many introductions make the ranks.
“We’ll pretty much look at any existing
supplier’s new brands,” he explains. “If Miller brings in
a new product, we’re going to bring it in. We’re extremely
selective about new outside suppliers because you really have to place a
high value on your route to market.”
Less than 1 percent of hopeful brands are accepted,
Friedman speculates. Within that small percentile, the company is focusing
its expansion on its craft division, which has Gold Coast looking outside
of Florida, as the state has few microbrewers. The company also is adding
wine brands to that developing sector of the business.
Racking up wine
Wine is an expanding market, but it also can be a tricky one. Gold Coast entered the wine distribution business following two acquisitions. In contrast to the beer business, it’s not a dominant player, yet.
“Wine is a very tough category for us,” says Felix Williams, executive vice president. ”We are in no way, shape or form the big kid on the block in the wine segment. In the beer industry, we’re the largest, in the wine segment we compete against three or four players that are enormously larger and have more resources than we have. We have tried to do the best we can to try to carve out a niche and continue to try to grow that niche — to have a wine business that complements our beer business.”
It’s been a learning process, explains Art Friedman, president and chief executive officer. In contrast to beer consumers, who are often vehemently brand loyal, wine consumers shop by label, type or country of origin, and are easily swayed. Gold Coast has found success with its Chilensis Reserva, a wine from Chile; Etchart Gran Reserva, an Argentinian offering; and Venezuela’s Sangria Seviallana. Seviallana Sangria has been added on-premise at Dolphins Stadium and the Orange Bowl, says Ernie Palmar, general manager of wine and spirits.
Its service levels have furthered its positioning as well. Gold Coast delivers wine cases with beer orders, and has been working closely with major retail chain, Publix. Publix sells 70 percent of the wine at retail in South Florida, Friedman says.
“In organizations that sell wine, we’re certainly not at the level of [some competitors], but because of our share of market and our service level, the wine strategy has been a nice add-on to our overall business,” he says.
While the company remains
at the top of its game, Gold Coast is not content to rest on its dominant
market positioning and good reputation. As the alcohol industry grows, Gold Coast’s competition is widening, Chief
Operating Officer Fernandez says.
“We’re not only competing in the beer
business, but in the alcohol beverage industry,” Fernandez says.
“A lot of spirits companies are creating products that are more
appealing to a traditional beer drinker. The flavored beverages, vodka and
rum have all of a sudden become a more drinkable product.”
With added competition, the company keeps its goals
in mind. It is aiming for increased market share, but also while providing
the highest service levels.
“It’s about the execution at store level
because if we didn’t execute at store level, nothing else we did
would work,” Williams says. “We put a high premium on our sales
organization to be the best in service and in relationships, and that
translates into execution at the highest level that you could probably see
around the country. That’s just part of working for Gold Coast
Additionally, the company’s competitive nature
in service is not limited to its direct competition, Levin says.
“Our goal is to be the best distributor,
regardless of industry,” he says. “When we ask retailers,
‘Who’s your best distributor?,’ we don’t want them
to compare us to the beer competition. We want them to compare us to the
other wine distributors, the cookie distributor, the soda distributor, the
milk distributor, whomever — we want to be the best there
Achieving the dominant position is not a stopping
place for Gold Coast either. The company is looking to better its own
company as well as research possible future acquisitions.
“We’ve achieved a high share in our
market, so every percentage of market share growth is getting harder and
harder and more expensive, but we’re doing it,” Levin says.
“But we don’t think that we’ve hit our capacity yet with
our growth. We think there is more upside with all of our brands …
Even though we’re a position of dominance, we need to stay hungry and
we also need to stay humble.”
At a glance
Gold Coast Beverage Distributors
2006 sales: $440 million.
More than $470 million is estimated for 2007.
2006 case sales: 21,850,000.
Nearly 22,100,000 is estimated for 2007.
Years in business: 61
years, 11 under current ownership
Approximately 3,800 square miles across Miami-Dade,
Monroe and most of Broward counties in South Florida, an area that includes
Fort Lauderdale, Miami, Homestead and Key West.
Facilities: 8 covering
735,000 square feet of warehouse space.
Being a good citizen
As one of
Florida’s top 50 companies, Gold Coast is a prominent member of its
community. The company works hard to support charities in the South Florida
area. In addition to working through its suppliers, the company also
couples its community outreach with its customers’ efforts, explains
Eric Levin, vice chairman in charge of acquisitions, strategy and political
relations. Through its relationship with supermarket chain Publix, Gold
Coast supports both The United Way and the Make A Wish foundations.
In addition, the company has worked with the
University of Miami on a number of special projects designed to promote
responsible drinking and reduce drunk driving. Recently, the company
sponsored the school’s Safe Spring Break program, which is a
week-long program preceeding the school’s spring break. The program
brings in speakers, panelists and activities for the students to encourage
them to think before they drink or not drink at all. The company also
purchased a new van for the university’s off-campus student shuttle,
the Ibis Ride.
Another local partner is Miami Heat center Alonzo
Mourning. The NBA star hosts an annual event called Zo’s End of
Summer Groove, which is a series of events that raise money to support
Mourning’s charities for underprivileged youth in the South Florida
community. Taking place at the end of this month, the Groove features a
golf tournament, celebrity basketball game and youth events. Gold Coast
brand Heineken is a sponsor of the comedy show, which stars comedians who
donate their time to perform.