Fall is football season and because of COVID-19, unlike any time in history, its uncertain if fans will be in the stands cheering on their favorite teams. Like football, which requires a point-generating offense and solid defense to win, beverage wholesalers are “fighting for the win” to ensure retailers have stocked shelves and team members stay healthy and safe.
Founded in 1976, Andrews Distributing likens its $821 million beer wholesaler business to a football team with 1,600 essential team members committed to serving 44 brewing partner and servicing 10,000 retail accounts in 26 counties in north and south Texas. All told, the wholesaler manages 700 beer brands and delivers 35 million cases of beer and flavored malt beverages (FMBs) from 1.2 million square feet of warehouse space across four Texas hometowns.
Mike McGuire, president of the Dallas-based company since 2010 and chief executive officer (CEO) since 2018, notes that the company’s customer-centric focus and brand promise — to help brewers build their brand every day — is at the heart of everything it does.
“We started in 1976 when my father-in-law, Barry [Andrews] started the company with Miller Brewing Co. We've evolved with our brewing partners, with our retailers, and team members over the years,” McGuire says. “I'd say our brand promise with our brewing partners is to build their brand every day. I think about it like we're a football team, and if you look at a lot of successful football teams, you think about what drives them. What drives us is to always have a strong offense.”
Andrews Distributing maintains beer distribution centers throughout Texas — the second largest U.S. state in population and area — in Allen, Corpus Christi, Dallas and Fort Worth. In 2019, the Fort Worth center debuted a new sustainable 532,273-square-foot center featuring 100,000 solar panels that generates 30 percent of the energy needed to operate the building, McGuire says. The center’s design also complies with Silver LEED AP certification, he adds.
“We are keenly aware of the impact our operations have on the environment,” says Dan Betz, executive vice president of operations. “We’re proud to have achieved close to zero waste at our distribution centers. Our business’ impact reaches deep into communities, from how many people we employ, to how many miles we drive on Texas roads, to how we support our communities.”
To share and identify the beer wholesaler’s impact in the communities it calls home, it will soon release its first Corporate Impact Report focused on four areas: economic, community, environmental and societal.
Fundamental to the success of Andrews Distributing is its passion for its customers and its use of technology to make sure retail customers receive the right mix of products. One way to achieve this is through the use of the company’s patented brand-building software program and optimization tools.
“On the customer-centric side, we have amazing brewing partners, the best in the world, the best in brewing great brands, and the best in innovating and marketing to consumers,” says Mike Barnes, executive vice president and chief revenue officer. “We see our role as being our customers most trusted adviser (grocers, convenience store owners, bar owners, restaurant venues) connecting their consumers at the point of purchase or on-premise with beer brands they love. We are passionate about our customers and their beer lovers.”
“… We lean heavy into technology as customers are demanding more choices from more brands,” he continues. “We built our own brand-building software platform and optimization tools that help our sales team and retail customers work together to get the assortment right in each store. Our marketing team uses these tools to support the planning process to help our sales force, as they're trying to get the numbers right on each account.”
‘Part of the fabric of communities’
Noting that beer distributors are “part of the fabric of communities,” McGuire highlights how Andrews team members are long-time volunteers and contributors in three areas: cancer research, military and veteran support, and strengthening its hometown communities.
“Last year, our philanthropic giving totaled $323,000, and our team volunteered more than 8,100 hours,” McGuire says.
In the wake of COVID-19, McGuire says he is incredibly proud that his employees have stepped up to support frontline healthcare workers; the event, restaurant and bar industries; craft brewers; and food banks.“What a year it’s been,” McGuire says. “Not just for how we run our business and serve our customers, but for communities across the globe.”
Because of the pandemic, Andrews Distributing launched a “Support Local, Drink Local” program including pricing support and in-store displays for three North Texas brewing partners. As a result, off-premise sales jumped 29 percent, McGuire says. The beer wholesaler also sponsored Furlough Kitchen, a curbside pick-up kitchen serving meals to furloughed hospitality and restaurant workers; and lent refrigerated beer trucks and team members to deliver perishables for hunger-based organizations, Allen Community Outreach and Hunger Busters.
Its rich history; its strong customer-centric philosophy and use of emerging technology to elevate the needs of retailers and its shoppers; a commitment to sustainability; and a willingness to go the extra mile to help its customers and community are among the reasons Andrews Distributing has been named Beverage Industry’s 2020 Wholesaler of the Year.
Brand-building from the start
With just 5,000 square feet of warehouse space, Andrews Distributing was founded 44 years ago by Barry Andrews (current Chairman of the Board) and his wife, Lana, in their hometown of Corpus Christi. At 29, Andrews was the youngest person at that time to have a Miller distributorship.
“With just 11 employees, Andrews sold 276,000 cases that first year with Miller Brewing as the only brewing partner and just two beer brands in its portfolio: Miller and Miller Lite,” Andrews says. “When we started in 1976, we were all premium and below premium beer.”
Today, McGuire and his wife Natalie — Barry and Lana’s daughter — have continued to operate the company based on the precedence of excellence, service and integrity set from the beginning.
“Miller Lite built our business and is still our No. 2 brand,” says David Holt, executive vice president of marketing at Andrews. “Today, imports have grown to be the top subcategory in our portfolio of brands with Modelo Especial as our No. 1 selling beer brand. Imports represent 51 percent of revenue year-to-date. The hard seltzer category is another salient call out, representing 4 percent of our revenue so far this year versus less than 1 percent last year.”
The company anticipates continuing growth for hard seltzers, noting that the segment could land at 10 percent of overall total beer category volume.
Although non-alcohol beer grew 23 percent totaling $132 million in 2019, according to Chicago-based Information Resources Inc. (IRI), right now, less than 0.5 percent of Andrews’ volume mix is non-alcohol beer, Holt says.
“We love seeing any growth and understanding what the consumer is looking for,” he explains. “Growth in subcategories like beer with no alcohol may be small, but we still work to understand it and build it to serve our customers.”
The next wave of growth
Noting how much the beer wholesaler business has changed in the past 44 years, technology, sustainability and eCommerce are driving growth like never before, McGuire says.
“We’re a multi-generational family business and we’re in for the long haul, recently investing over $135 million in building a true network of state-of-the-art distribution centers that gives us infrastructure for today and accommodate our future vision for our business,” he says. “This is part of our next wave of growth.”
The strategy and technology that goes into creating great beer experiences, and the team members who make it happen, is key to success.
“If you're in an actual distribution center, you’ll see a lot of different forms of technology,” Betz says. “For example, Voice Pick Technology, which is almost like a GPS system inside the warehouse, helps our order selectors be more productive, and they’ve rallied around it. Before Voice Pick, an average team member could load two trucks per shift. Today, we actually quadrupled the productivity of our order selectors. It’s remarkable because we actually have 4K and 5K clubs for teams that are able to pick 4,000 and 5,000 cases is a single eight-hour shift.”
The company’s aforementioned consumer insight software helps team members help their clients by giving them the best product mix for each individual customer, McGuire says. Other recent investments in technology platforms include Workday for human resource management and Salesforce.com for customer information systems.
Later this year, the wholesaler’s digital transformation will continue to evolve with a new eCommerce platform. Noting that the company operates with a continuous improvement mindset across its entire business, “digital transformation is key,” says Katy Wittig, senior vice president of customer growth strategy.
“Technology is more accessible and available than ever before, and we’re committed to staying on the leading edge,” Wittig says. “As an example, we invested in technology and systems to manage our supply chain (both forecasting and inventory), providing us the ability to make big data feel small. Ecommerce with a B2B focus is our next step in the journey.”
Debuting in 2019, Dynamic Routing software is shortening delivery miles and saving fuel. The software automatically optimizes the 18 million miles delivery personnel drive to retailers, restaurants and bars, ensures that trucks leave the distributions centers full, and saves an estimated 100,000 gallons of diesel fuel, while slashing driver miles by 350,000, Betz says.
Particularly during the past five months, the company’s purpose of “serving one another in pursuit of being our best” has never rang truer, McGuire says.
“As an essential business, we were fortunate that we could continue to serve our customers,” McGuire explains. “However, it also meant that that a significant portion of our team has been courageously working in our customers’ grocery and convenience stores, restaurants and bars, as well as in our distribution centers for the entirety of the pandemic. For individual retail accounts, our teams can enter a single account 20 times in one week.
“Throughout this, I have never been prouder of our team,” he continues. “Their dedication to their job, the community and our customers has been motivating and inspiring. We call it AndrewsStrong, and strong is such a good word to describe the team and their efforts.”
Like many alcohol businesses, Andrews Distributing has seen record sales during the pandemic along with a seismic shift to online shopping.
May and June generated the highest revenue and volume for convenience stores and grocery stores, respectively. “June 2020 was the biggest sale month in our company history, and the week leading up to July 4 was the biggest sales week ever for the company,” says Roy Foster, chief financial officer and executive vice president of shared services.
“We’re working to launch our eCommerce platform in the fourth quarter this year. We’re going to learn so much through the process, but I think it's going to be another way to better serve our customers,” Foster adds.
Andrews Distributing Chairman of the Board Barry Andrews notes that connecting with people was, and remains, a focal point of the business. While the company didn’t always have a purpose statement written down — it always had a purpose.
“The question has always been ‘does it make us better,’ not ‘does it make us bigger,’” Andrews explains. “Seeing people achieve things they never thought they could — and then collectively, seeing the company achieve things we never thought possible is what drives me. Our people make it happen, and I love to celebrate their successes with them.”
McGuire echoes that sentiment: “It’s true that our team is the heartbeat of our organization. They drive our culture. Our culture is totally focused on the customer and grounded in caring — caring for our stakeholders, caring for our people, caring about our business. We built our portfolio for today and tomorrow.
“We were honored to be named top distributor by Constellation Brands. It was an enormous compliment for the company,” McGuire continues. “The reason we’re recognized by our partners, and even by Beverage Industry, is because of the work our people are doing to serve our retail customers and brewing partners and to connect with beer consumers. We started as a beer company, and we’re 100 percent beer and beer innovation today.”
At a Glance | Andrews Distributing
Founding Year: 1976
Leadership: Barry Andrews, founder and chairman; and Mike McGuire, president and chief executive officer
Distribution Centers: 4 (Dallas, Allen, Corpus Christi, and Fort Worth, Texas); 1.2 million total square feet
Distribution area: 26 North and South Texas counties
Total case volume: 35 million
Revenue: $821 million
Number of brand families: 44 brewing partners/700 brands
Retail customers: 10,000