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| Southern Wine & Spirits of America Inc.: Vintage Service |
| Distributors | |
| By Chris Petersen | |
| Friday, 28 March 2008 | |
 Headed by Wayne (left) and Harvey Chaplin, Southern Wine & Spirits is an industry leader that distributes more than 5,000 brands from more than 1,500 suppliers in 29 states. “When you look back to the beginning, the business itself was much more fragmented,” Chaplin continues. “There were many more brand owners on the spirits side and wine was a fledgling industry.” In this seemingly hostile environment, how did Southern Wine & Spirits become the United States’ largest distributor of wine and spirits? Chaplin says the answer is a combination of factors, including the company’s singular focus, its role in expanding the domestic market for wine, and a strategy of growth – both organically and through acquisitions. Southern Wine & Spirits distributes more than 5,000 brands from more than 1,500 suppliers in 29 states, including California, Florida, New York and Illinois – four of the top five markets in the United States. The company says it ships more than 80 million cases a year. Chaplin says the company’s size and footprint put it in an elite class of distributors, a class in which Southern Wine & Spirits sits at the top as the leader. However, the company didn’t reach this position by being complacent, nor did it by expanding indiscriminately. Chaplin says being strategic about acquisitions and paying close attention to each local market have also contributed to Southern Wine & Spirits’ standing. “For us, it’s all about continuous change and improvement that keeps us ahead of everybody,” he says. “Being the biggest by itself is really not the answer. It’s really about being the best, and this is a centerpiece of our company culture. “It’s our single-minded focus on the business,” he adds. “This is our business; it’s the only business we know. It’s our extreme focus on the spirits and wine end of the business that differentiates us from our competitors, since many of them are heavy into beer. I also believe that Southern’s deep in-market commitment and knowledge sets us apart. Throughout much of our history, we were the underdog and had to out-hustle our competitors. That culture now fully permeates Southern; we are the biggest wholesaler out there because we work the hardest to be the best.” Total Partners Southern Wine & Spirits strives to be a true partner to its suppliers and customers, and says the value-added services it offers help build brands and strengthen both sides of the supply chain. For example, in recent years, the company developed corporate national accounts, category management, trade marketing, product sampling and strategic programs teams. These were the brainchild of Executive Vice President and General Manager Brad Vassar, a 23-year veteran of the industry with 17 years at Southern Wine & Spirits. Vassar was named to the position in early 2005, and Chaplin says he brought a history of professional management from the sales and marketing side of the business. “Southern Wine & Spirits and Brad worked with our suppliers to ensure that we really are the local marketing eyes and ears for our major suppliers in the local markets,” he says. The company accomplishes this, in part, through its home-grown, sophisticated marketing tools. As Vassar explains, “Given our broad footprint across 29 states, deep customer base of over 200,000 accounts and significant market shares in our markets of operation, Southern has richest depletions database in the industry. This data can be translated into useful customer and consumer targeting information by our Category Management Group. For example, we can pinpoint – with a high level of statistical confidence – the accounts that matter for specific categories of wine and spirits. No other wholesaler is close to being able to match this capability.” The company also taps important industry information through its strategic partnership with AC Nielsen, which provides resources such as off-premise customer data and analytical tools. Furthermore, key national accounts can count on dedicated contacts at Southern Wine & Spirits, with 44 account managers and senior corporate managers located in all large national account markets. Southern covers more than 60 percent of the total units of both major on- and off-premise national/chain account customers – and the states Southern is in represent 68 percent of total U.S. wine and spirits consumption. “One of the advantages of our footprint is that we do cover a very large percentage of the total units these chains have,” Chaplin says. Popping the Cork “The wine business is a very important driver for Southern Wine & Spirits,” Chaplin says, although at the time the company was founded wine was only a seedling of what it is today. Much of the growth in wine for the company, as well as nationwide, can be attributed directly to Mel Dick, senior vice president and Wine Division president. Dick says that when he was hired as general wine sales manager in 1969 he had to start from the ground up. “Everyone I told that to said, ‘What wine division?’ because we didn’t have one,” he says. “I was hired to put Southern into the wine business and to develop a wine business at the very beginning when we were basically a liquor company.” Despite the fact that a wide variety of wines can be found at any supermarket today, Dick says it was much more of a niche product when he got started. “In 1960, 60 million cases of wine were sold in America,” he recalls. “Most of that was port, sherry, muscatel and dessert wines. Very little table wine was sold and what was sold was basically consumed on the East Coast by Italian and Portuguese families – people from Europe who grew up with wine.” In time, however, Dick built the company’s wine division into an engine that helped propel domestic and imported wines higher into the public consciousness. “My approach was to develop wine-only salesmen, and also to make those salesmen that were selling spirits more wine-knowledgeable, finding small and new suppliers from all over the world and bringing them to Southern,” he says. “Our people had to learn where our wines came from – their stories and histories – to be able to entice the restaurateur and retailer. “I started by educating myself; I studied, I tasted, I traveled the world, and it became a labor of love,” Dick continues. “Today, there are so many well-trained people at each level of the company that our influence truly reaches right down to the consumer making a wine selection.” The tenacity of Southern’s salespeople, Southern’s hiring of 11 master sommeliers and hundreds of certified wine educators across its footprint, as well as the emergence of quality domestic wines have all converged into a booming market. In 2007, total wine sales in the United States were in excess of 300 million cases, according to Dick, approximately 70 percent of which came from domestic sources. That’s more than five times the size of the wine market when Dick first started. “The great wines of California received such wonderful press that people started exploring the great wines of Europe and South America as well, and everybody in the industry worked harder and smarter to make America what it is today-the largest-consuming wine country in the world,” Dick says. Dick has done so much for the wine industry, in fact, that in 2000 he was presented with the Legion of Honor by French President Jacques Chirac, and in 1985 he received the Merite Agricole from the French agricultural minister. Both were in recognition of his work in making French wine widely accepted in the United States. “It was magnificent; it was a wonderful experience for me and my family,” Dick says of the 2000 honor. ‘A Great Hobby’ Chaplin says the market is changing, but Southern Wine & Spirits is prepared to adapt to the changes. “I think the demographics of the consumers that are coming of age are very different than in the past,” he says. “On the wine side, consumers are less brand-loyal and less country- or origin-loyal than ever before. As a distributor, you have to make sure that you are offering those customers a wide variety of choice. “On the spirits side, because of our large footprint that covers so many of the different demographic groups across America, we not only get a good feel for trends in specific areas, we can help drive them with our team of accomplished mixologists and spirits specialists,” Chaplin continues. “Our goal is to try to take advantage of these trends early on and expand them into other markets. We’re focused on the U.S. economy. It’s important to understand what effect a slowdown in the economy might have on the different sectors of the business. Our feeling is we’re seeing some softness in the casual dining area – as well as the broader on-premise market.” However, he adds, there is still strong demand for high-end products, especially super premium brands. “For us, our focus is really to continue to add value to the brand owners, and that can be done in a number of different ways,” Chaplin adds. “We are uniquely structured to be a very efficient brand representative for many of these brand owners.” No matter what services it provides, Southern Wine & Spirits is a team, Chaplin emphasizes. “If you’re lucky to have a business this size, this is not a one- or two-man operation,” he says. “This is a team effort.” Dick adds that there’s no other industry he’d rather be in. “Wine is a great hobby,” he says. “It certainly tastes better than licking stamps!” As Southern looks to the future, it never loses sight of where it came from. “The strength of Southern has always been its people,” says Southern Chairman and CEO Harvey Chaplin. “We look at the big picture and set our strategic course here at corporate, but we never overlook how our success is achieved – through determined and dedicated execution at the market level by our thousands of talented professionals.” Forty years down, Southern is indeed like a fine wine – aging gracefully and still reflecting the high-quality foundational ingredients that set its course for greatness from the start. “In our industry, 40 years is really not that much time,” Wayne Chaplin notes. “We are still young as a company and look forward to continuing to enhance our supplier and customer services long into the future.” |
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