Capitalizing on its local market
Service, ‘special’ deliveries routine for Beer Capitol Distributing
With its four-county territory in southeastern Wisconsin incorporating special event venues such as sports arenas, concert venues and festival grounds, Beer Capitol Distributing Co. Inc., Sussex, Wis., offers enhanced service to these accounts during busy time periods, explains Aldo Madrigrano, chief executive officer of the company. For the occasions when Milwaukee’s Marquette University hosts a National Collegiate Athletic Association basketball game, Major League Baseball’s Milwaukee Brewers face-off against neighboring team the Chicago Cubs or a popular musician is performing in town, Beer Capitol’s fleet is ready to help its accounts serve their thirsty patrons.
When peak weekends hit, Beer Capitol has its draft delivery drivers running extra routes of pre-chilled kegs, plastic and aluminum bottles as well as special orders to its special event accounts. Although most of the customers’ needs are computer-forecasted, the wholesaler makes sure to run day-of event deliveries for on-time service and on-the-spot replenishment, if necessary.
Day-of deliveries are just part of the company’s three dedicated daily draft routes, which serve the
18 percent of its business that is draft sales, according to Mike Merriman, president of Beer Capitol.
“[With] 15 draft routes in a week, we touch the top 40 percent of our draft beer customers,” he says. “We still find a lot of value in that. In our keg business, we’re delivering that beer cold — it’s in the basement, it’s ready to go, you can tap the keg the second it gets there.”
Beer Capitol’s draft delivery is just part of its overall focus on customer service, Madrigrano says.
“I think what sets us apart from most people is we don’t have tele-sales, we call on every account and we touch and feel each thing so we can know what’s going on in each account, be able to get them the right brands and have people sell the right stuff along the way,” he explains. “I think that’s been a big key to our success and how [Merriman has] put that team together.”
In addition, the company insists that its salespeople don’t just add distribution for the matter of adding distribution, Madrigrano says. Each brand introduction at retail must fit the account and its consumer base.
The distributor’s sales force is divided into one team that is dedicated to craft beer brands and helmed by Global Brands Manager Ken Limas, and another that is focused on Beer Capitol’s larger brands, including MillerCoors, Crown Imports LLC and Heineken USA portfolios, which is led by Dave Neville, vice president of sales. Within the silos, individual salespeople, merchandisers and category management employees are focused on particular brands. Beer Capitol calls its brand-focused employees “growth administrators” because the term emphasizes the employee’s role in expanding the brands, not simply managing them, Merriman notes.
Daily sales calls further split into on- and off-premise accounts within Beer Capitol’s territory spanning Milwaukee, Waukesha, Ozaukee and Washington counties in Wisconsin. Depending on the size of the accounts, the sales associates call on accounts a few times a week, once a week or once every two weeks. While in the field, salespeople use handhelds that transmit orders back to the Sussex, Wis., warehouse via satellite.
After orders are placed, 85 to 90 percent of deliveries are scheduled within 24 hours of the visit, with the remainder delivered within 48 hours, Madrigrano says. Beer Capitol’s warehouse teams build mixed case pallets featuring between 12 and 15 SKUs for each customer that are loaded onto trucks according to location. Madrigrano notes that the company now uses about 85 percent rear-loaded trucks with about 14 side-loading trucks still used for deliveries within Milwaukee as well as for keg deliveries.
Beer Capitol runs about 45 trucks each day from its fleet of 80 trucks and 150 cars and vans. The company also has about 85 pieces of on-location equipment, such as beer-tap trailers, for special events, Madrigrano says.
Many deliveries are followed by a visit from a merchandiser who is on-site to facilitate shelf placement as well as to identify additional display, branding and promotional opportunities, he notes. The company also emphasizes the role of merchandisers, who, like the growth administrators, also have a unique role at Beer Capitol. Merriman says the company’s definition of a merchandiser is not someone who moves and places boxes, but sells beer. This mentality means that when a salesperson leaves his or her job, 95 percent of the time he or she is replaced by a merchandiser, he notes.
Its facility also includes dedicated areas for on-site sign printing, neon sign repair, point-of-sale (POS) inventory
and individual storage lockers for personnel to store allocated POS materials for on- and off-premise accounts.
Following the merger of Beer Capitol with sister company W.O.W. Distributing in 2009, the company opted to expand its existing Sussex, Wis., facility from nearly 200,000 square feet to 300,000 square feet, explains Ken Osypowski, vice president of operations for the company. The addition includes warehouse space, cold storage, offices and conference rooms, he notes. The warehouse now has the capacity to house about 700,000 cases of its roughly 1,200 SKUs of packaged beer and barrels of draft beer in both temperature-controlled and chilled storage areas.
The temperature-controlled areas are divided into inventory stock and picking areas in which a dedicated pallet position is designated for each SKU, Osypowski says. Some SKUs are placed in rows, while others use racking systems and smaller-volume SKUs are placed in case flow systems.
Original to the Sussex facility is a cooler dedicated to the storage of half-barrel and lower-volume draft barrels for on-premise accounts. With the summer season approaching, Osypowski estimated the cooler was at 80 percent capacity when Beverage Industry visited at the end of April.
During the expansion, Beer Capitol installed additional cooler space for lower-volume barrels, brands that need to be refrigerated and packaged goods for its special events businesses, which are required to be chilled upon delivery. It also maintains a separate chiller for craft brands, such as Great Lakes Brewing Co., Bell’s Brewery and Sierra Nevada Brewing Co.
Depending on special events and promotions, the warehouse is able to run 24 hours a day, seven days a week with seven staggered shift starts, Osypowski explains. Before the peak summer season started, in late April the company began shifts at 4:30 a.m. on Mondays and operated three shifts through Saturday mornings, he explains. But by the end of May, the warehouse will be running 24 hours a day, seven days a week to keep up with the seasonal special events.
“We’re flexible enough to adjust that to the peak activity and then we’ll scale it back to the regular hours,” Osypowski says.
The warehouse’s first shift is dedicated to shipping, receiving, picking area replenishment and minor building maintenance,
he explains. Beer Capitol maintains 12 docks for shipping and receiving, where it handles between 20 and 30 incoming loads and processes about 10 loads to be returned to its suppliers daily, Osypowski says.
For picking area replenishment, the company’s electric forklifts are equipped with PCs that offer a paperless view of what’s in stock, Osypowski says. He hopes that with additional planned upgrades, the PCs will be able to provide up-to-the-minute views of stock in each picking location to eliminate some product tagging.
During higher volume periods, the first shift will start picking orders, but generally order picking and staging begins at 9 or 10 a.m. and can continue through 8 p.m., Osypowski notes.
“Our sales staff transmits orders to us as early as probably 8 a.m.,” he explains. “Some of those people may leave here at 7 or 7:30 a.m.; they get to their first account and they’re instructed to transmit orders immediately so that we have work for that first group of people that comes in at 10 a.m. Then the orders come in throughout the day and we continue to build those orders out of our work order system. Each guy is assigned, at most, a few pallets at a time on paper right now and they go in through the picking area and build those pallets.”
To secure its built-to-order pallet loads, Beer Capitol has three stretchwrapping machines: one that is automatic and two that are semi-automatic. Together, the machines are capable of wrapping 240 pallets each hour, Osypowski says.
Around noon, Beer Capitol’s warehouse staff begins to move orders onto trucks with loading completed by 5:30 a.m. for the drivers to make their deliveries. The facility has nine dedicated docks for loading as well as a large covered drive-through space where side-loading trucks can be parked for loading, Osypowski says. Along the sides of the drive-through are protective barriers marked with barcodes that each signify an order staging position.
Upgrades on tap
Although Beer Capitol opened its consolidated warehouse in October 2010, it remains dedicated to improvement in efficiencies and currently is testing a voice-picking system for the warehouse. In anticipation of the voice-pick installation later this year, the warehouse reorganized to optimize the sequencing of package size and volume for the most efficient picking paths, Osypowski says. The company decided to postpone the installation of voice-pick until after its busy summer season, he notes.
“With the implementation of the voice-pick probably in October, we would expect once fully implemented we should be able to see a 15 to
20 percent increase in productivity on that system,” Osypowski explains. “The system directs these guys to pick in such a way that we expect that there will be very little manual verification at the end of this process also, so there’s some productivity gains in that regard, too.”
He says the company also hopes that the orders assembled through the voice-pick system will be able to be loaded right onto the truck after verification without the need for staging.
Beer Capitol also is planning to upgrade its facility management software to better monitor, control and schedule the facility’s utility usage, Osypowski says. BI