How the beverage distribution business works (yawn)

Discussion in 'LTL and Local Delivery Trucking Forum' started by Mike2633, Feb 14, 2015.

  1. Mike2633

    Mike2633 Road Train Member

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    Hi guys,
    I want to share something with all of you, you new guys looking for local jobs might find this interesting, you guys already established just might find it interesting for general knowledge.

    As some of you know currently I work for a whole sale beverage distributor. I work for a company that has rights to distribute alcoholic beverages in 33 counties throughout the state of Ohio.

    The company I work for has 2 warehouses and 4 drop yards. The main warehouse and headquarters is where I work out of.

    Anyhow I want to talk to you guys a little bit about the business so if you go into beverages you not only know what you are getting into as a truck driver, but also have a full understanding of how the industry works at least to the best of my knowledge that I can get across.

    Beer well like anything else has been turned into a complex business kind of, but not really.
    For one lets start with distributors and different kind of distributors:
    First you have company owned distributors this would be more along the lines of soda pop companies Coca Cola, Pepsi Dr.Pepper-Seven Up a lot of soda pop companies, (not all) but a lot do self distribution meaning the manufacturer is also the distributor. This is more common in pop then in alcoholic beverages.

    However where I live in Cleveland we have a Coca Cola bottling company and plant that is not owned by the Coca Cola company of Atlanta, GA. Basically anytime you see a Pepsi Truck that says NEW BERN TRANSPORT on the door that is a Pepsi truck owned and operated by Pepsi Co. With Seven Up if you see one that says SPLASH TRANSPORT that is 7 UPs DSD fleet.

    However if you see a Pepsi truck and the trailer says Pepsi but the name on the truck says VICTORY BEVERAGE WHOLE SALE GROUP INC that truck is not owned by Pepsi and the driver does not work for Pepsi the driver works for a Pepsi Franchiser. Beverage Whole Sale Franchisers are very common in the beer and alcoholic beverage industry.

    Most beer distributors have very common and simple names I.E. United Beverage Distribution, Victory Beverage Whole Sale, Cleveland Whole Sale Beverage Group, American Beverage Supply, Premium Beverage Supply, City Wide Beverage Distributors, Beverage Distributors Inc, Heritage Beverages, Kane Beverage, Buckeye Distributing, Pittsburgh Whole Sale Beverage Company. L.T. Verosa Beverage, North West Ohio Beverage Distributing.

    The reason for the common simple names is because the distributors do not want to show favor to one brand over another. There are exceptions to this though, (however the exceptions are rare) Anheiser-Busch Sales of Canton, Ohio is a good example of this. However for the most part beverage distribution franchise companies have simple names. That are just simple words.

    Anyhow what is a Beverage Distributor? A Beverage Distributor by in large is a franchise it is a company that handles the warehousing, distributing, sales and marketing to a certain extent for the larger manufacturer. Beverage Distribution is different then food in a way because there is no real nationwide beverage distributor like a Sysco or US Foods. Most beverage distributors are smaller or mid sized companies that really don't have a foot print much large then one state. Usually most of them just cover a few counties.

    Through out the years there has been a lot of consolidation in the beverage distribution industry. The company that I work for has bought out at least 3 distributors that I can think of and that is how they grew there distribution foot print.

    A lot of beverage companies started off as smaller family run business, the father and son and neighbor did the sales and drove the trucks and delivered the product and worked in the warehouse, while the wife and daughter ran the office.

    However over the years manufacturers have favored one distributor over the other and in term those distributors have bought out other distributors with the states blessing of course to grow there distribution territory.

    Here's what you have to understand though about beverage distribution, the company that distributes the product is a franchise meaning they are paying a very large bill and taking a huge cost that the brewery does not have to take on. The margins on certain products really are not that great. Also beverage can in a way become a stagnant business. If you are a Budweiser Distributor and you're warehouse and distribution compacity is at the point where you are full, it is very hard to get new brands so what ends up happening is you get stuck in you're territory and that's pretty much it, it becomes a no growth stagnant business. However hey if you're making a million dollars a year that's not to bad I'll take that kind of stagnation!

    The franchise beverage distribution business is all dedicated to one thing and that is getting the most brands to distribute as possible.

    Beer can be grouped into catagories:
    Domestics-Macro Brews Budweiser, Coors, Miller
    Imports
    Craft Beers
    Micro Brews
    & Ciders
    This is a model I built of what a modern day beverage distribution business looks like:
    005.jpg 001.jpg

    As far as beer goes there are two sides keg products and package products. You have keg beer which is beer on tap and then you have packaged beer which is cases of beer sold in packages to bars and also retail establishments.

    Some times beer is categorized by product. For instance Blue Moon is actually a very popular keg product, while it has a package side it is very popular for keg use in bars and restaurants, because they use it for cooking in the kitchen.

    002.jpg
    The keg on top that has the bubble is called a bubble keg Miller-Coors always bottles Blue Moon in a bubble keg and bubble kegs never go on the bottom always on top when you are loading them on you're two wheeler.

    Most beer brands are considered franchise products for instance a Coors Light Distributor will have Coors beer as it's main product, but would also pick up the other beverages as well like Redds, Blue Moon, Molson and a whole other host of finely made Miller-Coors products.

    Each brand in it's self can be considered a business where I work we are the largest distributor of Redds Apple Ale in the state and country.

    The job of a whole sale beverage distributor is the job of warehousing the products, effectivley marketing the products and then trucking the products to the market place. While at the same time enhancing business for the supplier the better job they do at enhancing business for the supplier the better chance they have of bring on newer and better brands.

    Beverage Distributors also have a roll in designing how all the beer is going to be set up and merchandised on the store shelves it's called a reset. Also beverage distributors have the job of hanging up the neon sings that say something to the effect of drink more beer right now.

    Say we owned a beverage distribution business and the name of that business was Tri-County Beverage Distributors are job from day one would be to market the living crapola out of the brands we have while trying to get new brands to distribute and also gain distribution territory into other counties. Like maybe we can get distribution rights to any thing like say we get Uncle Ned's Hose Water on the non-alcoholic side and . Once you get a brand to distribute it is very hard unless the manufacture changes ownership to have that brand taken away from you. So say we get Uncle Ned's Hose Water on the non-alcoholic side and you know Miller Brewing Company on the alcoholic side. In general to be a beer distributor it's always good in my opinion to have a big macro brew as the core product offering and then ad craft beers and non-alcoholics on as you go.

    So we have Miller which is our big product line naturally pretty much any place then that wants to buy Miller Beer from Milwaukee, Wisconsin is going to have to buy from us. This pretty much gets us into the majority of places.

    Our fleet of trucks is generally going to be maybe a couple bulk trucks for grocery store deliveries and a lot of side loader trucks
    Door Logo.jpg
    Edited Fall Pic.jpg
    These are side loader trucks hard at work making sure the beverages get distributed.
    So you new guys know beer distribution routes are very dense and usually you don't drive much more then a few miles on you're route.

    There are also bulk truck that do store and regular stops as well depending of course on the place and route:
    003.jpg 006.jpg 005.jpg This Freightliner Cascadia is a Convertible which is a bulk truck and side-loader basically a dock high side-loader for doing both small stops and grocery stores.

    Anyhow I hope this gave you some insight into the whole sale beverage distribution business and how it works. If you are a new guy you can bring all this information to you're interview and really wow them!
     
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  3. Shaggy

    Shaggy Road Train Member

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    Sell me the Conrail engine.


    I like how the railroad tracks/ Building can be easily switched around the property, Future Management in training lol
     
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  4. EZ Money

    EZ Money Road Train Member

    I pull full beer loads.
    Other than it being heavy and the wait times at Bud and Miller it is ok.

    I see you local distribution guys loading up at my drops early in the morning...
    Looks really busy!
    I think "I'm too old for that"....lol!
     
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  5. 8thnote

    8thnote Road Train Member

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    Very informative thread. Thanks for the info. One thing you left out is how drivers are paid. I've heard they get a base salary and then a percentage of everything that is sold on their route? Is that correct? If so, I bet there is intense competition among drivers to get the top paying routes.
     
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  6. TruckrWnnaB

    TruckrWnnaB Bobtail Member

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    i work for PBV (pepsi bottling venture) here in charlotte, we no longer get paid percentage, hourly, overtime after 8, i usually 14 hour days, no more than 60 a week
     
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  7. road_runner

    road_runner Road Train Member

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    The most informative thread I have seen in regards to the system to beverage distribution. Thanks for taking the time to put this together. It should be a sticky.
     
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  8. rearview

    rearview Medium Load Member

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    Things have changed.

    Back in the 70s, in LA we had open bays and used bungee cords to hold the pallets in.

    We had a daily shrink allowance built into the run. Beer trucks got the roll up doors before the soda guys did.

    I hated those glass two litre bottles when they came out. Still have a scar over my eye from one of those.
     
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  9. 77smartin

    77smartin Road Train Member

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    When I worked for Millis you got to see every kind of beer distributor....from hole in the wall like Watertown, NY (Miller) to the big boys like JJ Taylor in Minneapolis and Tampa. Most beverage places were ok to unload at...but some really sucked. Found that Miller places were a lot friendlier that Budweiser. I don't miss hauling all that beer.
     
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  10. Shaggy

    Shaggy Road Train Member

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    +1


    Everyone loves " the beer guy " also Interacts with some hot bartenders.

    Delivering Wine & Spirits to my state stores doesn't have the perks, Dang you beverage guys!!! :biggrin_25516:
     
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  11. road_runner

    road_runner Road Train Member

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    Bartenders are only "hot" without a ring on a specific finger. Game on then.
     
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