2011 Wholesaler of the Year: Wirtz Beverage Group
Wine and spirits distributor expands portfolio, facilities
Joe Gallo, president and chief executive officer of the E. & J. Gallo Winery (center), joins Wirtz Beverage Group President Rocky Wirtz and Wirtz Beverage Illinois Senior Vice President Julian Burzynski at the site of the company’s new Cicero, Ill., facility.
With annual sales of more than $1.9 billion, Wirtz Beverage Group is making strides toward its vision of becoming the leading premium total beverage alcohol wholesaler in the United States by Dec. 31, 2012. Beverage Industry’s Wholesaler of the Year is now in its third and fourth generations of leadership and has gone through a rebranding process in order to unify its divisions in Illinois, Wisconsin, Nevada, Minnesota and Iowa.
Arthur M. Wirtz Sr. began Wirtz Beverage Group, Chicago, in 1945. His sons, William and Arthur Jr., also worked within the family business. Wirtz Beverage Group is a division of Wirtz Corp., Chicago, which has diversified interests in banking, real estate, entertainment and sports including the National Hockey League 2010 Stanley Cup Champion Chicago Blackhawks, in addition to wholesale distribution. Wirtz Beverage Group is under its third generation of family leadership with William’s eldest son, W. Rockwell “Rocky” Wirtz, as president.
Three years ago, the company saw Wirtz Beverage Illinois, then known as Judge & Dolph, expand its portfolio with the acquisition of Glazer’s Distributors of Illinois.
“[It] basically doubled our volume from 4 million cases to roughly a little more than 8 million cases with the Glazer’s acquisition,” says Arthur Wirtz III, vice president of operations for Wirtz Beverage Illinois. “And what came over on that was the [E.&J.] Gallo portfolio, which drives a lot of volume.”
In 2009, the company decided to unify its businesses. The distribution company known as Judge & Dolph was renamed Wirtz Beverage Illinois; DeLuca Wine & Spirits became Wirtz Beverage Nevada; Edison Liquor Corp. was named Wirtz Beverage Wisconsin; Griggs Cooper & Co. became Wirtz Beverage Minnesota; and Hawkeye Wine & Spirits was renamed Wirtz Beverage Iowa.
“Before 2009, you had all these distribution companies that were owned by the Wirtz family all called something else,” says Julian Burzynski, senior vice president of Wirtz Beverage Illinois. “... So there were a lot of folks out there that didn’t really know the scope and size of the Wirtz investment in the beverage industry.”
Arthur Wirtz III says the formation of Wirtz Beverage Group allowed the company to leverage its culture and to standardize practices across the sales, delivery, warehouse, human resources and finance departments.
“Having that foundation will enable us to transition other businesses, other states [and] other divisions quite well,” he says. “We’ll have that infrastructure and that backbone in place in order to grow.”
Burzynski says the business model benefits the distribution divisions as well as the employees. “Although all the states run independently, it was very, very good to have a same platform so our employees could go state to state, whether they’re getting promoted or relocated,” he says. “In the past, because these companies were separate, there weren’t a lot of similarities in how we handled certain things. What [Wirtz Beverage Group] brought to the business units was consistency of the go-to-market strategy.”
Wirtz Beverage Group continues to see its affiliates grow. In January, Wirtz Beverage Illinois was granted the distribution rights to Bacardi Ltd.’s rum and additional products, including Bombay Sapphire gin and Grey Goose vodka. The Illinois division began distributing the products in April, adding about 750,000 more case sales, Arthur Wirtz III says.
“The first four months have been really, really fantastic,” Burzynski says. “It added $130 million worth of revenue to Wirtz Beverage Illinois and gave us the ability to add over 120 jobs.”
Burzynski says Wirtz Beverage Illinois accounts for $1.1 billion of the company’s $1.9 billion in annual sales. Wirtz Beverage Illinois serves the Chicago metro area, which caters to the city and suburbs, but also has operations in outlying areas, such as Belleville, Rockford and Peoria, he says.
With so much growth within the last three years, Wirtz Beverage Illinois had to expand into multiple facilities to accommodate the warehouse needs, and now the company is addressing the business’ expansion with a new headquarters.
Wirtz Beverage Illinois currently is building a 600,000-square-foot state-of-the-art office, training center and distribution warehouse in Cicero, Ill. The $70 million facility is expected to be complete by fall 2012, the company says.
“The facility will serve as Wirtz Beverage Illinois’ hub for sales, wine and spirits distribution, and training programs,” Burzynski says. “A majority of our 1,000 Illinois employees will be relocating to our Cicero location, condensing our operations in Schaumburg, Wood Dale, Bensenville and Elk Grove Village under one facility. We think this will bring significant improvements to our organizational culture and operational efficiencies.
“We understand that as a premier wholesaler in the country, we are held to a higher standard,” he continues. “From our sales, marketing and training programs to our facilities, equipment and infrastructure, we will continue to make the investments necessary to maintain and enhance our standing in the industry.”
Arthur Wirtz III says the company will benefit from condensing its four operating facilities into one. “We’ll have everyone under one roof,” he says. “We’ll also be able to leverage our training and conference areas in the new facility. We’ve got a significant number of breakout rooms to facilitate not only training, but also the team meetings that we have on a weekly basis.”
The Illinois building also will feature an alchemy room, which was previously implemented at the company’s Nevada division facility. The Illinois alchemy room will have full video capabilities and a full-size bar for wait staff and bartender training, Arthur Wirtz III says.
“We’re taking all the best elements with what we did in Nevada with the alchemy room and we’re building that into our new facility in our new alchemy room in Illinois,” he says. “It’ll give us that foundation and that space in order to not only do training from an internal standpoint, but to bring in external parties to do wait staff training. You can be working with any of the key bartenders on cocktails and developing cocktails, so we’re really excited about that space and being able to host those events as we move forward.”
Moving operations to the Cicero facility in 2012 also will allow the Illinois distributor to add new materials and technology.
“It gives us the ability to upgrade our operations, so we’ll have brand new technology in the warehouse and delivery aspects of our business, which will make us more efficient,” Burzynski says. “As a distributor, we’re just trying to create more value for two customers: one is our suppliers, who we purchase the products from, and the other is our customers. So the more efficient we can get operationally, the more value we bring to them.”
A new facility is not the only thing in store for Wirtz Beverage Illinois. The distributor will receive a new enterprise resource planning (ERP) system in the beginning of October. The Illinois affiliate is the second Wirtz Beverage Group division to receive the new system; Wirtz Beverage Nevada was the first, which began working on the system in April.
“It’s going to enable our company to talk state-to-state, share information, share best practices and be more efficient in the distribution business,” Burzynski says.
“Built on an integrated information exchange, our ERP system allows us to have access to real-time sales, marketing, inventory, finance and programming data providing collaboration and enhanced interaction between Wirtz Beverage, our suppliers and our customers,” says Danny Wirtz, vice president of marketing and sales for Wirtz Beverage Group.
Burzynski notes that in 2013, all of the Wirtz Beverage Group companies will be on the same ERP system. The new data system will cost about $25 million for the integration, he says.
Wirtz Beverage Group’s ERP systems are not the only example of technology that benefits both the company and its customers.
“Much of our ordering is driven through Wirtz on the Web, a state-of-the-art, 24-hour, seven-days-a-week online ordering system,” Danny Wirtz says. “It provides customers real-time access to pricing, inventories, order history and fulfillment.”
Wirtz on the Web was implemented in 2008, Burzynski says. “If [customers] need something or they want to browse products or get educated, they can go to our website and grab that information,” he says. “If they want to pay bills, they can pay their bills online. It’s something that we’ve had for the last five years and we’ve upgraded every year.”
Arthur Wirtz III says the customer-specific program has streamlined the ordering process for those who use it. For example, a manager of a nightclub who is leaving work at 2:30 a.m. can place an order at that time online and it will go out on the next scheduled delivery day, he says.
Wirtz on the Web also has a positive effect on the relationship between the sales staff and the customers.
“Another benefit is that it frees up the sales reps’ time to really talk to their partner, whether it’s the owner of the bar or the owner of the retailer, about more promotional programs and activities,” Arthur Wirtz III says. “... I think in some cases, it gives more quality time between the sales rep and the bar owner or the liquor store owner on activities on how to drive business.”
Wirtz Beverage Group’s Telesales division also is designed to be efficient and valuable for both the customers and sales force.
“Wirtz Beverage Telesales is exclusive to us and allows us to expand market reach and touch nearly every on- and off-premise account in each state market,” Danny Wirtz says.
Dedicated software for telesales allows the company to manage a large number of accounts and maintain a history of all of those accounts and information, allowing the company to leverage the accounts with the technology, Arthur Wirtz III says.
“I think that’s benefited us and given a better customer service experience than if they were some of the smaller accounts on a salesman’s route,” Arthur Wirtz III says.
Customer service improves by having those accounts in telemarketing because of the ability of the system to take notes and archive them based on the buyer’s interest, he says.
In addition to serving its customers, Wirtz Beverage Illinois has developed programs to help service its suppliers.
“We’re proud and privileged to maintain relationships with the majority of the world’s elite suppliers, many of which have grown with us for decades,” Danny Wirtz says. “We believe the transparency we have with the suppliers differentiates us in the marketplace. We are true partners, understanding the brand’s strategic intent and the importance of maintaining brand equity. We invest heavily in training and development programs that will boost these brands in ways that are not only thoughtful, but also strategic.”
Wirtz Beverage Illinois entered into an agreement in 2003 to distribute products for Diageo plc, including Smirnoff and Captain Morgan. To accommodate the Illinois distributor’s largest supplier, Wirtz Beverage Illinois established a dedicated sales division called Regal, which represents the Diageo portfolio, Burzynski says.
Since then, the company also created the Alliance division, which features the newly added Bacardi portfolio as well as Brown-Forman and Remy Cointreau brands in Illinois, Minnesota and Iowa.
Its third division is Spectrum, which represents all other brands in both wine and spirits within Wirtz Beverage Illinois.
“The difference would be instead of just sending one person in with 5,000 different items to sell, we have three divisions that break up those items, so it’s more about focus and execution at the store and restaurant level,” Burzynski says.
This year, Wirtz Beverage Nevada was acknowledged by Brown-Forman as its Distributor of the Year in the beverage alcohol company’s “heavyweight” division. Wirtz Beverage Wisconsin was the runner-up for the “middleweight” division.
“It is clear that the strategic direction and drive for innovation by Wirtz Beverage in all of our state affiliates is the right path to success,” said Danny Wirtz in a statement. “We are proving that under the OneWirtz culture, our teams go above and beyond to create value for our supplier partner across the country.”
With such a large portfolio, Wirtz Beverage Illinois understands the importance of an effective business model. “Warehousing and distribution use a wide range of systems and processes to improve efficiency,” Arthur Wirtz III says. “The systems used include both industry standard systems and systems developed and customized exclusively for Wirtz Beverage and are a result of industry experience.”
To serve the Chicago area and outlying towns, the Illinois division operates on a four-day a week delivery platform Tuesday through Friday, he says. The metro routes operate an average of 100 trucks a day, Arthur Wirtz III says, with Peoria at about 24 and Belleville between eight to 10 trucks. With roughly 135 to 140 routes a day, the company keeps a close eye on accuracy and efficiency.
Warehouse operations are tied to the company-wide ERP system, Arthur Wirtz III says, but all of the warehouse operations are managed by the warehouse management system (WMS). The company uses case pick modules linked to the WMS for order picking and products slotted within the modules.
“All of our products are then tracked by assigning unique identifiers to each pallet or case that enters the warehouse and logging this number into the warehouse location assigned to the product,” Arthur Wirtz III says. “Likewise, delivery routing and tracking are a controlled process. We provide all drivers with GPS-enabled mobile phones that tie into the system for improved tracking and route efficiency.” BI