2015 Wholesaler of the Year: Andrews Distributing Co.
Texas beer distributor expands portfolio, facilities
In 1976, the United States was celebrating its bicentennial, the National Basketball Association and the American Basketball Association agreed to a merger, and the CN Tower was built in Toronto, making it the tallest free-standing land structure at the time. The year also was the founding of Dallas-based Andrews Distributing Co.
With seven facilities covering the Dallas-Fort Worth and greater Corpus Christi area, Andrews Distributing has come a long way since its operations only handled Miller Brewing Co. products. Now, the beer wholesaler has a portfolio of 37 brewers and more than 300 brands.
This growth was made possible by Chief Executive Officer and Chairman Barry Andrews’ vision and commitment to become one of the country’s first multi-branded distributors. The company also credits this growth to its culture, which centers on nine core values: integrity, team players, family and health, image, accountability, open door and mind, trust, dedication and passion, and attitude.
This commitment and evolution are among the reasons that Andrews Distributing was selected as Beverage Industry’s 2015 Wholesaler of the Year.
The beer wholesale community has experienced its share of acquisition in the past few decades. Mike McGuire, president of Andrews Distributing, notes that in the 1970s, Texas had more than 400 beer distributors. Because of consolidation, that number now is fewer than 70.
Although the beer distributor originally served the Corpus Christi area, it has since added Dallas, Allen and Forth Worth to its coverage area. To meet the needs of these markets, Andrews Distributing has 1,095,282 square feet of temperature controlled and refrigerated space among its seven facilities: 361,141 square feet for its two Dallas distribution centers; 305,000 square feet at its Allen facility; 150,000 square feet in Corpus Christi; and 279,141 square feet across its three Fort Worth distribution centers.
To ensure consistency throughout its network, the beer wholesaler has embraced technology to complement its shared services team approach to serving its customers.
“Technology is a critical driver fueling our growth because it provides the right information at the right time to make better decisions,” McGuire explains. “As an example, although separated by geography, our four locations work together seamlessly. They share a robust data warehouse designed to support our business planning process and our customer order fulfillment process. Our shared services team with IT, [human resources], marketing services and finance has delivered the resources our customer facing teams need to be proactive brand builders. That combination of resources has propelled us into a market-leading share in DFW and the growth leader in Corpus Christi.”
Andrews is building an all-star team of legacy players as well as the top talent from integration of acquired distributors. “People make it happen and we are so proud of our passionate, committed and educated team of sales, delivery, merchandising and operations leaders and teammates,” Barry Andrews says.
“As part of our growth through acquisitions, we also aim to be ‘One Andrews,’” Barry Andrews continues. “After one year, we count all past service of team members from newly acquired companies. In March 2015, we reached that milestone for team members who joined Andrews as part of the acquisition of Coors Distributing of Fort Worth on March 28, 2014. Our team members have seen the value of this game-changing lesson time and time again since first being implemented after the Willow (Coors Dallas acquisition) acquisition in February 2003.”
Barry Andrews is proud of the integration of employees as well as the community of team members who have helped make Andrews Distributing what it is today. “If you treat people the way you want to be treated, they’ll stick around for a long time,” he says. “That’s exactly what we do at Andrews. Out of our 1,500-plus team members in north Texas, almost 45 percent have five or more years of service. In south Texas, 50 percent of our 150 team members have five or more years of service. That’s some pretty amazing tenure for a distributorship of 1,500 team members. Every role in our organization is important; it takes a well-rounded team to spell success.”
Understanding the need to adapt to a changing market, Andrews Distributing acquired distribution rights to 37 brewing partners through 14 acquisitions as well as new brewers in the Texas markets partnering with the company.
In the late ‘90s, brand acquisitions helped establish the company’s growth pattern that continues today. In 1997, it acquired rights to the Modelo/Corona brands, and then in 2003, it welcomed Heineken USA brands. These alone represent one-third of Andrews Distributing’s 2015 volume.
“Andrews has an ambition and goal to be the nation’s leading beer brand builder,” says Mike Barnes, north Texas general manager. “We are evolving our multi-branded model by building the capability to consistently customize solutions for our retailers based on their customers at a neighborhood level. That requires us to be closer to our customers than ever before. The outcome is tremendous value for all of our stakeholders: team members, brewers, retailers and beer lovers. We are all about brand building.”
Andrews Distributing’s portfolio features a strong mix of domestic, import, craft and specialty brands as well as the Red Bull portfolio. Domestics continue to dominate its portfolio with them accounting for 57.3 percent in north Texas year-to-date and 65 percent in south Texas year-to-date. In north Texas, Coors Light is the top performer followed by Miller Lite, Keystone Light, Miller High Life and Steel Reserve High Gravity. However, in south Texas, Miller Lite is its top-domestic SKU with Coors Light, Keystone Light, Lone Star and Miller High Life rounding out the Top 5.
With so many strong brands in its domestic portfolio, the company works to make sure each gets the support it needs in the market. David Holt, vice president of brand building, and his team of brand managers work with the brewers to co-create annual plans for north and south Texas markets through a strategic business planning process led by its marketing services team. Katy Wittig, senior director of marketing, and her team designed its business and account-planning systems to be leveraged by the company’s brand team to create strategies and tactics that will produce positive results for each brewer, while allowing the distributor and brewer to work together cohesively.
“We plan both annually and monthly with our customer in mind, focusing on consumer occasion and retail experience,” Wittig says. “Our diverse portfolio is a true competitive advantage, and it is our job to deliver an account plan that maximizes our brands’ potential and our retailer’s opportunity. Having the right marketing mix at retail drives value for our retailers and assortment fit for their customers.”
When Miller Lite decided to bring back its original can, Andrews Distributing’s team embraced the opportunity. Barry Andrews also noted how excited he was to see the distributor’s founding partner achieve such success with this implementation. “It’s so exciting to have the brand that built our business in the early years, Miller Lite, back in its original design and up 3.1 percent in case volume this year,” he says. “Miller Lite’s resurgence shows the powerful connection it’s made with millennials.”
Although domestic beer accounts for more than 50 percent of its portfolio’s sales in both markets, imports also are a strong contributor to the company. North Texas case volume for imported beer is 34.5 percent while south Texas case volume is 25.5 percent.
Because Andrews Distributing features both Mexican and European imported brands, it takes the approach of getting the right brands to the right consumers in the right accounts for the right occasions. Like making sure Irish Pubs are stocked with Guinness and its Mexican foodservice accounts have plenty Modelo Especial, Barnes explains. “For example, Heineken Brew Lock is aimed at high-energy occasions in cosmopolitan centers, suburb upscale bars and casual dining,” he adds. “One of many Modelo Especial draft targets is cosmopolitan center Hispanic sports bars with strong soccer tie ins.”
Sean Murphy, Corpus Christi general manager adds: “Dos Equis is the No. 2 draft handle in Corpus Christi but is actually the No. 1 in keg sales.”
The beer wholesaler also keeps strong tabs on its respective markets and what brands are performing well in each. North Texas has Modelo Especial as the overall leader, followed by Corona, Dos Equis, Heineken and Stella Artois. However, it knows that the Top 3 European brands are Heineken, Stella Artois and Guinness. For south Texas, Dos Equis is the top performer while Corona, Modelo Especial, Heineken and Tecate round out the Top 5. For its Top 3 European brands, Heineken, Stella Artois and Guinness complete the list.
The company also embraced the craft beer culture in the ‘90s by adding Shiner Bock to its portfolio in 1997. This year alone, the company introduced Einstok, Traveler Beer Co., New Holland, Small Town, Ninkasi Brewing Co. and Coney Island Brewing Co. to its craft and specialty division.
“Times have changed,” McGuire explains. “Jim Koch once said that Sam Adams might be all we needed for the portfolio. As the new craft market has unfolded, Jim and our team have adapted. He encourages us to work backward from what our beer lovers request and the retailers’ desire to ‘cover their bases’ on selection. We have followed Jim’s advice. Still, Andrews is very selective. Our goal is to be brand builders and not brand collectors.”
Craft beer accounts for more than 9 percent of Andrews Distributing’s volume and close to 11 percent of revenue, growing approximately 15 percent a year, McGuire adds. In north Texas, it is 9.3 percent of its sales, and in south Texas, it accounts for 6.6 percent of sales.
“Craft beer has brought tremendous excitement and energy to the industry as well as new options for occasions that didn’t exist for beer previously,” he says. “Craft beer also created an aficionado customer segment that seems to lift beer as a category. It also hooks beer into the powerful local mega trend.”
To support the craft beer movement, Andrews Distributing employs a strong staff. Referred to as Force 4, the team is led by veteran sales leader Tom Farquharson. Bob Sullivan, the former Boulevard Brewing head of sales and marketing, joined in February of 2013 to lead its craft brewer acquisition and portfolio strategy. Blythe Lee, a former Boston Beer leader, joined Jill Newman to guide its craft brand team that works with its brewers to build brands. The company also has Beer Experience Ambassador Tim Sweeney to lead its Certified Cicerone and Beer Ambassador programs.
Andrews Distributing recognizes that craft and specialty beer is different than its other beer segments. Because of this, it employs an approach to uncover, or in some cases, discover the brewer’s unique story.
“That narrative is shared with the team and together with the brewery,” McGuire states. “We begin the co-creation of a marketing and brand-building strategy. Craft brews always have a unique story to tell, and that often contributes to the loyalty from customers. We build on their stories. The plan, at that point, is almost self-activating. Our craft brewer friendly planning system then helps us target our tactics in the right neighborhoods and accounts. Because everyone at Andrews sells every brand, there is no account out of our craft brewers’ reach.”
System for success
With more than 300 brands across its vast portfolio, Andrews Distributing understands the importance of having a strongly supported sales division.
Under the leadership of Barnes, the company redesigned its sales force strategies. Based on market segmentation and definitions of retailer and consumer categories, the program features specialized sales teams, which report to general sales managers (GSMs). With big objectives in mind, the teams are continuously looking for insights, new ideas and winning tactics, the company notes.
“Our specialized sales force, support teams and our high share portfolio have driven 24 consecutive months of share growth as well as positioned Andrews as the leading share distributor in north Texas,” Barnes says. “We seek every opportunity to continually improve. As servant leaders, this is a commitment to our teams of today and the generations to come.”
Andrews Distributing also has supplied its sales force with the tools they need. The company implemented Rutherford and Associates EoStar route accounting software. The sales force also is armed with a tablet-based mobility platform to support a data-based selling system, including several software apps to support its partners’ bottom lines.
“Over the last decade, Andrews Distributing has made tremendous investments in its technology team and a best of breed technology platform to create alignment with our customer focused brand building strategy,” says John Ross, vice president of IT.
Investing in the future
Whether through its growing brand partnerships or SKU proliferation, efficient warehouse operations are crucial to Andrews Distributing’s continued success.
With current inventory capacities at 2.4 million cases and 50,000 kegs, the beer wholesaler is investing in its distribution centers with additions to the Allen and Corpus Christi locations and a new facility breaking ground this December in Fort Worth.
The Allen Distribution Center, which was completed in late 2011, currently stands at 305,000 square feet sitting on a 44-acre campus, and will expand by 60,000 square feet. The Corpus Christi distribution center, built roughly 10 years ago, is expanding by 50,000 square feet and is scheduled for completion next month. At 450,000 square feet, the new Fort Worth facility will consolidate three leased operations into one. It plans to break ground late this fall with a two-year projected completion time frame, the company says.
The company also sees the value in investing in its fleet operations. For its more than 800 vehicles in north Texas and 67 vehicles in south Texas, Andrews Distributing utilizes SmartDrive to serve its more than 12,000 accounts. SmartDrive uses cameras with the capability to record both inside the vehicle and the road ahead, the company says.
SmartDrive videos and scoring system also have aided in improving driving habits among team members, Kyle Costello, director of delivery services says. “SmartDrive’s videos show us exactly what happened, and allows us to coach our drivers and improve their skills,” Costello says.
Dallas-based Andrews Distributing Co. has shown its commitment to its brand partners through its hard work and leadership. This year, the company was recognized by two of its partners: Diageo North America and Heineken USA.
Diageo awarded Andrews Distributing its Golden Bar Awards for Distributor of the Year and Mid-South Guinness Quality Award. “The entire Andrews team was proud and humbled to be recognized again as a top partner of Diageo’s,” says Mike Barnes, general manager. “This award validates our commitment to service excellence built from our operating capabilities and our culture. The 2015 Golden Bar Awards ADC received exemplifies the strong 18-year relationship between Andrews and Diageo.”
Andrews Distributing also was recognized by Heineken USA’s 1864 Award for Responsibility. “We were proud to be recognized by Heineken USA for their responsibility award. Responsibility is at the forefront of all the company’s operations,” Barnes says. “Each ‘hometown’ strives to be an ethical and responsible member of the north and south Texas communities. We are also grateful to Heineken USA for their effective programs and tools that provide us opportunities to help us educate and empower our team and community to make responsible choices.”
Community is a key component to the beer wholesaler’s culture. Andrews Distributing has been an active member of the Wholesale Beer Distributors of Texas since 1976. It also is an active sponsor of key north and south Texas events and fundraisers.
“We have worked with the Cattle Barons Ball as their lead sponsor for 21 years in both Dallas and Corpus Christi,” Barry says. “The Dallas Ball is the American Cancer Society’s biggest single night fundraiser having raised $55 million in its history and over $3.6 million last year. Andrews is the main stage sponsor where Kenny Chesney performed last year and Tim McGraw will perform this year. Andrews also donates all of the beer for the 3,000-plus audience.”
More personal celebration for Andrews Distributing occurs next year when it marks its 40th anniversary. On Feb. 6, the beer distributor will host a celebration and unveil the completed expansion of its Corpus Christi distribution center. There also will be a 40-day countdown for the entire Andrews organization to celebrate its people and history.
“Andrews is celebrating its 40th anniversary and building for the future,” McGuire says. “Building a new distribution center in Fort Worth and expanding our Corpus Christi and Allen locations prepares us for the growth ahead. We are passionate about Andrews’ brand building purpose and core values and believe innovating our business model is creating growth and value for our stakeholders. With a tremendous Texas market, powerful portfolio, winning team and brand building purpose, the best is ahead of us.”