Beverage Distribution News
Soave Soars
When the opportunity arose for Soave Enterprises, LLC to acquire Kalamazoo Beer Distributing in 1984, president and CEO Anthony Soave, a successful entrepreneur with a strong vision and investment portfolio to match, jumped at the chance. While the acquisition provided an opportunity for the Detroit-based management and investment company to expand its core businesses with a foray into beer distributing, Soave’s decision also was based on another compelling idea: the chance to gain a wholesale relationship with Anheuser-Busch.
“I was definitely intrigued by what an investment in beer wholesaling seemed to offer, but what attracted me most of all was the opportunity to be an Anheuser-Busch wholesaler,” Soave says. “I thought they were an outstanding company with terrific products and exceptional marketing strategies. They were the absolute best in the industry by far. They still are.”
The 1984 acquisition of Kalamazoo was the first step along the road to the formation of the Soave Distributing Group, which last year boasted an impressive volume of 19 million cases and sales of more than US$238 million. Owned by Anthony Soave, the Soave Distributing Group now consists of five major Michigan and Illinois wholesalers under the Kalamazoo Beer Distributing and CITY Beverage umbrellas, employing more than 450 workers in all.
Much of that growth is due to Soave’s success as a wholesaler for the Anheuser-Busch products that gave Soave Distributing its start, including Budweiser and Bud Light, as well as Busch and Busch light. And the company’s growth has not gone unrecognized by--A-B; Soave is noted by the brewer as one of its fastest-growing and most dedicated wholesale organizations.
Kathleen McCann, Soave Enterprises’ senior vice president in charge of the beverage distribution, is emphatic about the key role the Anheuser-Busch relationship has played in the growth of the company’s wholesale business. “Through the years, we’ve enjoyed an incredibly close relationship with Anheuser-Busch, and it’s been critical to our success,” she says. “It’s been a long and fruitful partnership and one that we are confident will continue into the future.”
Anheuser-Busch’s recent acquisition of InBev’s Rolling Rock and its purchase of US importation rights of the Leuven Belgian-based megabrewer’s European brands, has represented yet another boon for Soave. Those developments have expanded the brewer’s existing successful relationship with A-B and allowed Soave to augment its own portfolio which, says McCann, is much more complete now. It also has afforded Soave an opportunity to be more responsive to its own customers’ need for choice, while also allowing the distributor more time with its retailers.
In addition to the InBev imports and A-B’s home-grown brands, Soave Distributing Group also carries brands from A-B’s craft partners Redhook, Goose Island and Widmer, the newly formed A-B/Modelo JV Crown Imports, Diageo USA, Gambrinus, High Falls, Huber, Kirin, Labatt, Mickey Finn’s, Sapporo and Tiger brands, as well as non-alcohol products like Icelandic Glacial water and Hansen’s.
Soave’s continuing portfolio expansion and wholesaler acquisitions might lead an outside observer to wonder whether Soave Distributing struggles with employee retention. Cecil Troutwine, president of CITY Beverage-Illionois, however, explains that turnover is not a problem; in fact, employee retention is excellent, as the company’s management policies are geared toward encouraging both employee and employer loyalty.
“The one thing about our organization that I am most proud of,” Troutwine says, “is our commitment to the policy of promoting from within.” While many companies can claim similar commitments, Soave follows through by literally investing in employee growth. CITY Beverage, for example, has financed the college educations of each member of its top management team. Hiring from within whenever possible—even when hiring an outsider might seem more expedient in the short-term, says Troutwine, “has enabled us to prove our loyalty in the minds of our employees...[promoting from within] has served us well in terms of management stability, allowing us to weather the many changes that came along with these acquisitions, and provided us with qualified individuals to meet the challenges of new opportunities as they were identified.”
Troutwine believes that the policy has demonstrated, in the minds of employees and brewers alike, CITY’s commitment to success.
According to Soave, commitment is paramount, and the distributor’s success in wholesaling hinges on its commitment to relationship management.
“The people in our organization invest a significant amount of effort in building solid relationships and earning the trust of their customers and their teammates,” he says. “Execution is everything, and it’s fundamentally built on each individual’s commitment to do what they’ve said they will do...Our team is proving that you can accomplish great things when everyone is pulling in the same direction.”
While commitment certainly plays an important role in the outstanding success of the Soave Distributing Group, it would be difficult to ignore the advantages that the distributor has over smaller wholesalers. Unlike smaller players, the Soave Distributing Group is backed by the Detroit-based Soave Enterprises, LLC, a private investment company with organizations generating collective annual sales of US$1.6 billion. Founded by Anthony Soave in 1961, the company’s core holdings are in beer distribution, real estate, automotive dealerships and an array of diversified areas ranging from metals recycling to transportation to hydroponic greenhouse operations. In 2006, Forbes magazine ranked Soave Enterprises as the 251st largest privately held company in the US.
Soave Distributing gains not only the capital infused by Soave Enterprises, but also its substantial business acumen. McCann points out, for example, that the diverse array of businesses held by Soave Enterprises facilitates the growth of the distribution group, which has at its fingertips support in the wide-ranging areas common to every business, including legal, information systems, human resources, strategic planning, accounting, tax, finance and risk management.
According to Kalamazoo Beer’s president Randy Siesser, capital backing, business savvy and customer service are important elements of the company’s success; but Soave’s leadership might just be the key driver.
“Having Soave as an owner has also been a huge asset for our companies and for our partner brewers,” he says. “A lot of owners have money, but Soave’s been instrumental in the strategic direction and management of the companies. (Anthony) sets the tone for excellence in customer service and is a major motivator for his people.”
Siesser says the most important characteristic Soave brings to growing the distribution business is the same principle that helps him retain the best employees: He is “willing to forego short-term results for long-term returns, which allows management to invest in our people, facilities, technology and brand development.”
But even a powerful partnership with A-B and experienced, committed and well-funded leadership cannot neutralize the industry challenges distributors face. “There have been many changes since Soave entered the business in 1984,” Siesser says. “The number of major brewers has significantly decreased and the number of micro-brewers has grown substantially. We have to be on top of our game to deal with the challenge that so many new players to the market brings.”
Soave is optimistic the distributing group will meet these challenges, and if the past is any indicator, this confidence is well-founded. “This has been an exciting time to be growing in this industry,” he says. “We’ve got a great team, great products and great partners--all with an insatiable desire to win. I expect the future will be equally exciting as we continue to expand our holdings.”
VITAL STATS
SOAVE DISTRIBUTING GROUP
PRESIDENT AND CEO: Anthony Soave
HEADQUARTERS: Detroit, Mich., USA
’06 VOLUME: 19 million cases
’06 DOLLAR SALES: US$238.1 million
EMPLOYEES: 590
GOALS: Finding new opportunities for our business and our team.
From Beverage World September 15, 2007
