It can be rare in the increasingly competitive wine and spirits world to get a fresh start, but that’s exactly what happened three years ago when two family owned, multigenerational mega distributors of alcohol beverages — Southern Wine & Spirits and Glazer’s — joined forces to become Southern Glazer’s Wine & Spirits (SGWS).
Established in 1968 (Southern) and 1933 (Glazer’s), the combined company now distributes in 44 states, the District of Columbia, the Caribbean and Canada. Operations include 47 distribution centers that represent 1,700 wine, spirits, beer and beverage suppliers, more than 5,000 brands and 2,650 trucks driving more than 76 million miles to deliver approximately 172 million 9-liter cases, according to Wayne E. Chaplin, chief executive officer (CEO) of Southern Glazer’s Wine & Spirits.
Despite the breadth and depth of its national network, which annually delivers to 282,000 customers including 6.4 million deliveries at bars, restaurants, retailers, hotel and chains, Chaplin attributes the company’s success to the resources, expertise, talent and culture of both formidable businesses. “What makes us different from our competition, besides our size and scale, is our ability to execute flawlessly at the local level,” Chaplin explains. “This is something our Chief Operating Officer Brad Vassar really lives and breathes. He always says, ‘execution is the No. 1 job of a distributor and every investment we make is focused around making us better at it.’
“We are all about having the right product at the right time in the right place at the right price and now we have the structure in place to deliver the best portfolio of products available in the market,” Chaplin continues. “In addition, we have the most highly trained, passionate workforce in the industry — all committed to serving the needs of our suppliers, customers and communities.”
Headquartered in Miami and Dallas, SGWS puts considerable emphasis on furthering the education of its nearly 22,000 team members — from the top down — and has more certified wine experts than any other North American wine and spirits distributor, including 13 Master Sommeliers and 20 Master Mixologists and is the “world’s pre-eminent distributor of beverage alcohol,” Chaplain says.
Not stopping there, and to ensure the company has “the best trained salesforce on earth,” employees successfully have completed nearly 8,000 wine, sake and spirits education programs, from introductory to master-level achievements.
In addition to education, Southern Glazer’s mission is rooted in philanthropy, volunteering and giving back to the communities they serve. For instance, since the company launched its internal, digital philanthropy platform VolunCheers Online in July 2016, more than 12,000 employee volunteer hours have been logged. In its first national holiday volunteer program last November and December, VolunCheers’ employees participated in 60 events nationwide and volunteered 3,632 hours, raising more than $90,000 in the process, the company says.
SGWS also raised more than $40 million for Florida International University’s Chaplin School of Hospitality & Tourism Management and hunger-relief organizations Food Bank for New York City and No Kid Hungry, in partnership with the Food Network & Cooking Channel South Beach Wine & Food Festival and its sister event, the New York City Wine & Food Festival.
Its rich history; strong, nationwide North American footprint covering approximately 90 percent of the legal-drinking-age population; a steadfast commitment to education and philanthropy; and its ability to redefine the customer experience are among the reasons that Southern Glazer’s Wine & Spirits has been named Beverage Industry’s 2019 Wholesaler of the Year.
Building from a place of strength
When Glazer’s and Southern Wine & Spirits hit the alcohol wholesaler landscape more than 85 and 50 years ago, respectively, neither of its founding leaders, Bennett Glazer nor Harvey Chaplin could have envisioned its monumental success. While the former CEOs highlight that their companies were founded on “zip,” a relentless pursuit of growth, a team of great people and an ambition to be the “biggest and the best,” helped the two companies carve out success in the brutally competitive alcohol distribution market.
“When I began as a salesman in 1968, there were 17 distributors in Texas and Glazer’s was ranked in the middle of the pack,” Glazer recalls. “The competition was brutal, and we weren’t fortunate enough to represent the top premium brands in the market. I really dreamed of a day when we’d be selling premium products and be recognized as a distributor powerhouse. The dream has become a reality because of the dedication and commitment of our loyal people.
“The combined culmination of Southern Wine & Spirits and Glazer’s values and culture make for a great company,” he continues. “I am so pleased to be part of it.”
People always have been pivotal to Southern’s growth, according to Harvey Chaplin. “It was always a top priority to take care of our people,” he explains. “Otherwise our key has been supplier relations. I always said, we own desks, we own trucks, we own warehouses, but we don’t own brands — the supplier owns the brands. The supplier is king.
“It’s all about execution at the local levels for our customers,” Harvey Chaplin continues. “If we ensure our suppliers and customers are successful, the rest will take care of itself.”
Although driving growth wasn’t always easy, both leaders instinctively knew there wasn’t an obstacle they couldn’t overcome. “Being open to doing things differently and being humble enough to know when you need help, is something all good leaders need to know how to do,” Glazer says. “I had that moment when I … brought in Shelly Stein to Glazer’s in 2010. It helped to reinvigorate the company. We saw tremendous opportunity to modernize our business through best-in-class processes and systems, while improving people, technology, finance and marketing.”
Harvey Chaplin notes that gaining statewide distribution in California in 1969 was a turning point for Southern Wine & Spirits. “When we were a regional player, we really struggled in the market,” he explains. “We knew if we could be a statewide distributor we would become a major player and that would be a game-changer for us. There were some touch and go moments in the process and at times we’d didn’t know if we’d make it.
“Scheiffelin & Somerset was the first supplier to come with us on a statewide level and that was a big change,” Harvey Chaplin continues. “Once we finally cemented that position, we set the foundation for what continued to be years of unprecedented growth. … California became a model for how we would proceed with each market expansion going forward.”
A formidable force
Since the finalization of the merger in July 2016, Southern Glazer’s Wine & Spirits has continued to build on the model of its predecessors and the many lessons learned along the way, says Wayne Chaplin, who notes that the merger was the right decision for two family legacy companies.
“We reached ‘Day One’ seamlessly without disruptions to our trading partners. We combined more than 20,000 employees, disparate IT systems and billions of dollars in inventory. This was quite an accomplishment,” he says. “Bacardi’s decision to align nationally with us — which actually was announced within days of the merger — was another ground-breaking first. They recognized the value of a long-term strategy that included a national distributor alignment that would give them a first-mover advantage in the industry. That alignment would not have happened without our combination.”
With revenue at an estimated $17.5 billion, Southern Glazer’s Wine & Spirits ranks No. 18 on Forbes’ 2018 list of America’s largest privately held companies, according to the magazine.
The company has a dedicated team serving its national account customers and provides a “one-stop shop” for on- and off-premise customers looking to execute programs across the wholesaler’s national footprint, Wayne Chaplin says.
“With coverage of 90 percent of our national account customers’ operating units, we can implement programs and easily track performance across our entire network,” he explains. “This team is supported by a dedicated customer strategy team that provides customers with the largest data set in the industry and focus on shopper marketing trends, retailer insights and trade business intelligence.”
Along with its business acumen, the combined company delivers a whole new level of value for suppliers and customers. “For suppliers, we can provide a more efficient and effective route to market,” Wayne Chaplin explains. “For customers, our size and scale enables us to deliver unparalleled business intelligence and market trend information.
“We continue to grow and thrive together as one bigger, better and more dynamic company,” he continues. “’Big is the new small’ encapsulates our service model ethos — with national and regional leads aligning vision and planning, our local teams are freed up to focus on execution and customer service.”
Not surprisingly, the merged companies encountered IT and data processing challenges, but the CEO notes that an aggressive timeline was designed and implemented to consolidate the wholesaler onto a single-back office system: Systems Applications and Products (SAP) in data processing.
“With the company now on one SAP system, we can bring consistent processes across the organization along with consistency to all of our master data,” Wayne Chaplin explains. “Completing the SAP foundational system consolidation sets us up to align with our partners and ensure business continuity.”
Even before the merger, Wayne Chaplin notes that SGWS was making transformative investments in its operations and supply chain capabilities.
“Our Southern Supply Center model is an entirely new concept in the wine and spirits industry that consolidates wine and spirits from global partners that are produced or ordered in small quantities, warehouses them until there is demand and then redistributes them to our distribution centers across the country.
“We’ve also made major investments in creating a sales and operations planning (S&OP) process that brings in our marketing staff in the field to help us forecast on a national basis versus on a state-by-state basis, which has created a ‘one-stop shop’ where vendors and suppliers can come to one place and talk supply chain, shipping and sourcing.
“In this model, Southern Glazer’s S&OP process includes hundreds of suppliers and more than 28,000 customer accounts, and accommodates operations that vary from state to state, depending on local alcohol distribution regulations,” Wayne Chaplin adds. “Completing this integrated, demand-based process is a game-changer, not only for Southern Glazer’s but for the industry.”
Other significant post-merger milestones include the use of one JDA warehouse management system and investments in new state-of-the-art facilities in Aurora, Colo.; Anchorage, Alaska; and Katy, Texas.
Capitalizing on its premium wine portfolio, in March, Toronto-based SGWS of Canada launched a new wine division that includes a luxury team that sells high-end wines and spirits to 160 on- and off-premise accounts in Canada. A dedicated wine manager in four large provinces sells to the Liquor Boards and key accounts and the company is “very encouraged” that the specialization will deliver growth for its customers and suppliers.
SGWS consistently stays on the pulse of wine and spirits trends. For instance, 2018 marked the ninth straight year of record spirits sales and volumes, Wayne Chaplin says, citing the Washington, D.C.-based Distilled Spirits Council.
“Overall, there’s limited volume growth in wine, but the value side of both wine and spirits continues to be healthy, driven by premiumization. American whiskey is driving the brown spirits side, along with Irish whiskey and Japanese whiskey. Tequila at the higher price points and cognac are doing well,” Wayne Chaplin says. “Gin is also having a nice resurgence, and aperitifs like Aperol are seeing growth in part due to greater consumer interest in cocktails with lower alcohol volumes.”
The United States also is the largest wine consumption market in the world with consumers purchasing more than 408 million cases of wine worth $70.5 billion in 2018, he adds, citing Wines Vines Analytics.
Although the wine and spirits categories including low or no alcohol-by-volume (ABV) or better-for-your cocktails are gaining momentum, Wayne Chaplin notes the entire wholesaler tier is facing some disruption from direct-to-consumer (DTC) channels.
“Sales through winery direct shipping grew by 18 percent in 2018. One recent survey found that 40 percent of beverage alcohol shoppers are likely to shop for beverage alcohol online in the next year,” Wayne Chaplin states. “Companies across retail and food and beverage are positioning to offer beverage alcohol delivery services, in what we refer to as the ‘4thTier.’ At SGWS, we are looking at this opportunity to grow and expand our business.”
To keep up with dominating eCommerce trends, SGWS recently launched Proof, a B2B eCommerce experience for its customers that is available 24/7 at SGProof.com. The website gives customers the convenience and control of 24/7 online ordering and account management.
“Customers can search Southern Glazer’s extensive portfolio of brands, reorder favorites and browse and discover exciting new products from anywhere and on any device,” Wayne Chaplin explains. “Proof will be available to our customers in 15 markets by September and nearly all markets by the end of 2019.
“We’ve seen great success so far in our rollout — the re-order rate for customers on the Proof eCommerce platform is at 64 percent,” he adds.
Education is another important way Southern Glazer’s stands out from the competition, Wayne Chaplin says. Through the company’s Wine & Spirits Academy in Las Vegas and its soon-to-open, 18,000-square-foot center in Wynwood, Fla., the company provides hands-on education about the latest trends in wine and cocktail culture to bartenders, beverage buyers, customers and corporate clients.
As SGWS looks to future, Wayne Chaplin says it will continue to spearhead the growth of new and emerging brands as it continues to work with other family owned companies and brands.
“We view ourselves as a brand-building organization,” he says. “Whether it’s finding ways to continue to grow an established or mature brand or helping to introduce a completely new product to the market. Suppliers work with us because we know how to get their products into the right accounts, at the right price, and at the right time.”
A lawyer, Wayne Chaplin says his father’s advice — that “your word is more important than any legal document” — continues to resonate. He also credits such “extremely talented people” as Harvey Chaplin, Jay Weiss, Walter Jahn, Elliot Dinnerstein, Mel Dick and Herbert Joseph for his business acumen.
“My father has had a great influence on me — both at work and at home,” the CEO says. “He taught me, first and foremost, that our people are our great resource. … I truly believe that we win or lose by the quality of our people. He also reminds me to never forget we are a family company. Therefore, we should always treat our employees with the dignity and respect as if they are family, because they are.” BI
AT A GLANCE
SOUTHERN GLAZER’S WINE & SPIRITS
Headquarters: Miami and Dallas
Founding Year: 2016 (merged from two family owned companies: Southern, 1968, and Glazer’s, 1933)
Leadership: Harvey Chaplin, chairman; Bennett Glazer, executive vice chairman; Wayne E. Chaplin, chief executive officer; Shelly Stein, president; Steven Becker, executive vice president, treasurer and compliance; Mel Dick, senior vice president and president of wine division; Thomas Greenlee, executive vice president, finance; Alan Greenspan, executive vice president and general counsel; Lee Hager, executive vice president, secretary and administration; and Brad Vassar, executive vice president, chief operating officer.
Distribution Centers: 47
Distribution area: 44 states, District of Columbia, the Caribbean and Canada
Total case volume: 172 million 9-liter cases
Revenue: $17.5 billion
Number of brand families: 5,000