Like the bustling metropolis it serves, Manhattan Beer
Distributors is at once large, extremely diverse and always changing. With
more than $570 million in sales, the company is the largest
single-market beer distributor in the country, delivering more than 28
million cases a year throughout the five boroughs of New York City and the
surrounding area. Despite its size, when Manhattan Beer executives talk
about the business, they describe it as a case-by-case and
neighborhood-by-neighborhood endeavor. The company features a lineup of
products to target each segment of its diverse consumer base, and it
operates with a no-order-is-too-small policy that gives it access to both
the largest and smallest retail customers.
Manhattan Beer is the largest wholesaler in the United
States for both Coors and Corona, and the company considers Samuel Adams
among its other flagship products. But the company represents 40 beverage
companies in total, and its roughly 560-SKU lineup also includes small
local craft beers and imports from far-flung regions of the world.
Simon Bergson, president and chief executive officer
at Manhattan Beer, got his start in the beer business in the late
‘70s, operating a home distributor business — a concept that is
relatively unique to the New York market that includes both retail and
wholesale elements. He got into full-scale distribution when he acquired
the rights to several regional brands, and soon added a number of imports
to the lineup. While the company maintained its Manhattan moniker, it soon
moved its headquarters to the Bronx, and over the years added four more
distribution centers in Queens, Brooklyn, Long Island and a recently opened
facility in Suffern, N.Y., that will serve Westchester and the northern
The company’s sizable distribution territory
covers about 6,000 square miles that includes everything from inner city
neighborhoods to suburban locations, which is
why each sale is a unique interaction. “We service about 23,000
customers, and we figure about 20,000 to 21,000 are independently
owned,” Bergson says. “It’s an independent buyer,
it’s an independent credit risk, it’s an independent account
call that our salesmen have to make every week, every time they go into an
Bill Bessette, chief operating officer at Manhattan
Beer, adds: “Because of the cost of real estate here, the room that
customers have to store beer is very small, so it’s very frequent
levels of service. We offer service to every customer every day, with no
That no-minimums policy extends to all of its brands,
from flagship products to the niche brands carried by the company’s
new specialty products division. The company organizes its sales force by
both facility and retail category, with five general sales managers who are
responsible for sales through each of the warehouse locations, a general
sales manager dedicated to the home distributor market, and one for the
specialty beer division. Manhattan Beer’s 200 route salespeople also
are specialists in their class of trade, with those who handle
supermarkets, the on-premise and up-and-down-the-street channels, and home
According to Bill DeLuca, senior vice president of
sales, marketing and business development, the company’s business
breaks out into roughly 23 percent each in traditional on-premise,
off-premise and supermarket accounts, and the remainder in the home
Manhattan Beer’s consumers are as diverse and
individual as its retail base. The area’s population hails from
numerous cultural and ethnic backgrounds, which has led the company to
carry brands from all over the world, and to tailor much of the marketing
for its brands.
“We started as a specialty wholesaler,”
Bergson says. “We then became a large volume wholesaler with
mainstream brands like Coors, Corona and Sam Adams. But my history, my
perception of the beer business, has always been people want to be able to
drink brands from their own country, from their travels, from their
Last summer, Manhattan Beer created a new specialty
products division to focus on some of its smallest-volume products. The
company had considered the idea in the past, but was spurred to action
early last year by the loss of the InBev portfolio to Anheuser-Busch.
Brands such as Beck’s, Bass, Stella Artois, Leffe and Hoegaarden
represented about 8 percent of Manhattan Beer’s business, but when
InBev and Anheuser-Busch negotiated a U.S. distribution agreement, A-B
chose to move the brands to its local distributor.
Once Manhattan Beer realized the move was inevitable,
it took the initiative to sell the brands rather than wait for the decision
to come down from St. Louis.
“It was like being married and hearing from your
spouse that they wanted a divorce,” Bergson says. “Once
somebody has a mindset that this is what they’re going to do, no
matter what you say, it’s not going to change it and you’re not
going to be able to convince them to do anything other than that. Plus
... the last thing I want to do from a business perspective is have my
competitors or my competitors’ staff in my organization on a regular
basis seeing what we do, seeing how we do it, understanding how we go to
While the company didn’t want to prolong the
pain of losing the InBev brands, it realized the move would be a blow to
its sales organization, which had found great success with the
“The InBev portfolio was about 2.5 million
cases, and for a lot of our route salespeople, that represented a
significant weekly deficit in their paycheck,” DeLuca says.
“That was a concern of ours because we didn’t want them
focusing on the loss of the InBev brands.
The company committed to making up the difference in
the commission its sales team would lose on the InBev brands by working
their average weekly InBev sales into their regular salary.
“It turned out to be one of the best things
we’ve ever done for our people, and it paid off for us too,”
DeLuca says. “We didn’t lose anybody to the competition, nobody
resigned for the fact that they were concerned about how they were going to
make the living that they used to make when they were selling InBev, and I
think it just inspired people to get behind the portfolio that we still
The company made up the losses in record time. When he
announced the sale of the InBev brands, Bergson issued a challenge to
recoup the 8 percent sales loss within 18 months, but the company achieved
the goal in only 10 months, finishing 2007 flat.
“Honestly, that even surprised me a bit,”
Bergson says. “But the passion and desire of my team to go out and
win just enabled them to take our existing brands [and sell them].”
Bergson says brands such as Coors, Corona, Blue Moon,
Newcastle and Spaten all were up last year. “We didn’t pick up
any new brands of significance,” he says. “A couple of minor
brands here and there, but nothing of volume. So a lot of this growth is
The sale of the InBev portfolio also left Manhattan
Beer with the realization that some of its smallest craft beers and imports
were essential to its business, and last summer, the company created a
division dedicated to those products.
“Selling off the InBev portfolio sort of brought
to light a little more clearly that we needed to get more serious in that
specialty division, to hopefully not lose accounts that we were doing
business with exclusively with the InBev portfolio,” DeLuca says.
The company created the specialty beer division,
headed by Rob Mitchell, an 18-year veteran with Manhattan Beer. The
division is charged with both calling on specialty accounts such as bars
and restaurants that want only the most unique products, as well as
educating the rest of the sales organization about specialty beers.
DeLuca says the brands carried by the specialty
division represent less than 1 percent of the company’s business,
“but if we can provide service to another 200 customers that
aren’t buying any of our other products from us, that’s what
it’s all about.” He estimates more than 100 accounts already
have been added to the company’s business since the division began
operating in July.
In addition to carrying unique products for specialty accounts, Manhattan Beer carries a number
of small import brands for ethnic consumers in its territory, and tailors
the marketing of its more mainstream brands to New York consumers.
“We deal with some very sophisticated suppliers,
and they all have a pretty good conception of who their target consumer
is,” Bessette says. “... Basically, New York is several
markets at once in terms of ethnic mix, in terms of income levels. You have
Wall Street, probably the financial center of the world, all the way out
into the various boroughs of Brooklyn and Queens. It’s very
Like the specialty products division, import products
present an opportunity to target unserved markets. “There’s not
a lot of distributors our size that are going to take on a brand that may,
at the end of the year, only represent 5,000 cases,” DeLuca says.
“But if it’s 5,000 cases of a brand that we’re going to
sell to a certain pocket that we probably wouldn’t be selling any
other brands to, we’re going to be taking that brand on. That just
makes us a full-service distributor.”
When it comes to marketing, the company develops its
own marketing programs and also works within the national programs created
by its brand owner suppliers. It works with Coors Brewing Co., for example,
to implement its Latino 360 program. “Sometimes they’ll draw up
a program in Colorado that is more of a Mexican theme, and that’s not
the Hispanic consumer here,” says Al Greco, vice president of
marketing and business development. “So we work collectively and
closely with them to make sure they stay focused on the Puerto Rican and
Dominican consumer – those that are drinking our products.”
Steve LaGreca, general manager for New York Metro at
Coors Brewing Co., says the collaboration has made it the most successful
implementation of the program in the United States. “They’re
capable of taking a program, giving it real solid feedback,” he says.
LaGreca describes the relationship between the
companies as, “very dynamic. There’s a tremendous amount of
energy on both sides of the fence,” he says.
Coors Light is the No. 1 light beer in the area, and
Greco also credits Coors’ Rocky Mountain theme and the focus on
“cold” as keys to its success in New York. In addition, Coors
is a sponsor of the New York City Marathon, and Manhattan Beer created a
special commemorative can for the event. It also created special packaging
for the New York Giants and the Jets.
In order to serve all of its suppliers, big and small,
the company has an art department in each of its facilities that can create
point-of-sale materials such as banners and cooler stickers, as well as a
point-of-sale room to house materials supplied by the brand owners.
Preparing for changes ahead
Manhattan Beer’s ability to react to
wide-ranging demographics and changes in the marketplace perhaps stems from
Bergson’s belief in the old adage that the only thing that’s
constant is change.
“My philosophy has always been that our
relationship is controlled by our suppliers and if our suppliers are
consolidating or being acquired, whether it be on a national or
international level, that’s going to work its way down to the
distributor level,” he says. “I think the wholesaler of today,
the beer distributor of today, has to get bigger, has to be a larger
wholesaler to be relevant in its market. But you also have to be responsive
to the actions of the suppliers.”
As if to illustrate the point, Coors Brewing Co.
announced late last year that it plans to merge its U.S. business with
Miller Brewing Co. The move no doubt will result in further consolidation
in the distribution business, including perhaps, the New York market.
Bergson and other Manhattan Beer executives decline to comment on possible
scenarios, except to say further change is inevitable.
“We have no idea what the new company will do
with respect to combining things,” Bessette says. “New York is
a market where an individual distributor can last a long time ... our
point of view has always been to invest, build the infrastructure to make
ourselves attractive and go from there.”
Regardless of what happens with the merger, some at
Manhattan Beer are pointing to 2007 as a pinnacle year for the company.
Says DeLuca: “I think our execution this year has by far been our
best effort as a distributorship.”
Craft beers require a great deal of care and attention,
but Manhattan Beer Distributors thinks they
are worth the extra effort — so much so that last
summer, the company created a specialty beer division
to handle its smallest offerings. The company
tapped 18-year veteran Rob Mitchell to head the
new division, and hired a team of beer experts to
hand-sell the brands in hard-to-reach accounts and
help educate the rest of Manhattan Beer on the
finer points of specialty products.
"We went out and looked for extremely well-educated,
knowledgeable beer professionals," Mitchell
The group's first mission was to help the rest of
the sales organization understand what craft beers
are all about.
"The most important thing they need to do is raise
the intelligence level and sort of create a comfort
level for our average route salesperson or on-premise
supervisor so they can speak confidently about
these brands," says Bill DeLuca, senior vice president
of sales, marketing and business development.
To that end, the specialty team presents new
beer styles during sales meetings, conducts beer
tastings, and rides along on sales calls with route
salespeople to talk about specialty beer opportunities
in the marketplace.
In addition, New York's restaurant and bar scene
lends itself to specialized accounts that want only
the newest, sometimes eclectic, hard-to-find products.
The specialty beer team also is responsible for
finding and maintaining those retailers — in fact, it's
those types of accounts that define which products
the division will carry. Samuel Adams, for example,
is a specialty beer by industry standards, but the
brand is carried by many mainstream bars and
restaurants, and its higher volume places it within
Manhattan Beer's mass market selections. The specialty
division, on the other hand, serves accounts
that carry only the most unusual styles.
"Sam Adams isn't on [tap] in these places,"
Mitchell says. "Sierra Nevada isn't on. But Sierra
Nevada Extra Special Bitter Cask Conditioned will get
on. People go there because they know they're going
to get brands they can't get anywhere else."
Once the division makes a sale to the specialty
accounts, its team is able to draw on the distribution
power that comes from being part of a large company.
"Our strength is that we'll deliver five or six days
a week with no minimums, in all of our counties,"
The division's lineup includes local, regional and
imported products, some of which include
Southampton Publick House beers, Kelso beers from
Brooklyn, Keegan Ales from the Hudson Valley, High
Point Brewing Co.'s Ramstein beers from New
Jersey, Legacy Brewing Co. products from
Pennsylvania, Arcadia Ales from Michigan and
imported beers from Shelton Brothers in
Manhattan Beer's specialty division is a member
of World Class Beverage, which is a group of distributors
around the country with a similar philosophy
about specialty beer. Other members of World
Class Beverage include DeCrescente Distributing
Co. in upstate New York, Monarch Beverage Co. in
Indiana, Gulf Distributing Co. in Alabama, J.J.
Taylor Cos. in Florida and Crescent Crown
Distributing in Arizona. The companies all operate
independently, with their own customers and
brands, but together they have created a calendar
that features different beer styles each month and a
consumer Web site on specialty beers. On occasion,
they also combine their buying power for special
displays or variety packs.
"Out there it might be great beers of the Midwest;
here I'm doing great beers of New York," Mitchell
says. "It's the same concept, but it changes based
upon where you put your head on the pillow at night."
According to DeLuca, the ability to open up
new accounts and establish a presence in areas
where the company did not previously operate
pays dividends beyond the small amount of volume
these brands offer.
“We don't expect any one of those SKUs to ever
do more than 1,000 cases in a calendar year," he
says. "This is true specialty. You order 30 cases at a
time. You have to walk it through the entire system
— ordering it, then selling it and delivering it.
"There is no way that we could have taken this
specialty initiative and just plug it into our structure
of 550 sales and marketing individuals," he adds.
"We're just not geared for that. It's a whole bunch of
tender loving care, from the time the brewery produces
it to the time it's consumed."
Beverage Industry’s November issue highlights the 100-year advocacy of the American Beverage Association and what’s next for CEO Katherine Lugar and a new plastics initiative, Every Bottle Back. This issue includes a special report on craft beer, an Up Close With feature on PRESS hard cider and what is sparking innovation in natural colors. Read more about how protein is powering up beverages and how warehouses are using WMS and WCS systems to streamline operations. As usual, the latest trends in new products, packaging and ingredients are highlighted.
Check back throughout the month for additional content.