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Not long ago I gave a talk to a beer wholesalers convention on the three-tier system and how things might look after it went away. After the talk, we went out for dinner and I saw a SYSCO truck delivering restaurant supplies. "That’s the future of beer wholesaling," I said, "consolidated, multi-state, and huge."
Just then a much smaller truck pulled in behind it, a guy hopped out and grabbed two baskets of live lobsters out of the back. As he hustled the lobsters into the store, one of the wholesalers said, "That’s the future of wholesaling, too: small, service-oriented, high-margin luxury products."
He was so right. There’s always room at the top, especially in a market where customers prize variety. It’s a narrow space up there, so you have to be small and move quickly to avoid being crushed. These are the small wholesalers, the little guys who bring you the beers you really crave: the rare, the small, the expensive.
Most of them got into wholesaling because of beer passion. Dave Masterson of Hunterdon Brewing in New Jersey explained the name of his company. "We were planning on becoming a brewery," he said. "It’s the passion for Mike Short and I, that’s why we started the company. But we quickly realized that wholesaling was the real opportunity."
Some guys backed into it. Vecenie’s, in Pittsburgh, has been around since Repeal, selling regional brands like Iron City and Straub. "The first PA craft brewery we hooked up with was Stoudt’s," said Ken Vecenie. "We were intrigued by their zest for the quality and specialty beer. We had no idea the craft segment would grow the way it has."
Like the lobster guy, small wholesalers have to hustle. "In this business, you’re only as good as your name and you are your job," said George Bradley, of Westy’s, in Camp Hill, PA. "I haven’t had a day off in three weeks. We’ve developed a reputation for having and acquiring products that are a cut above and knowing more about them than our competitors. That reputation didn’t happen over night. More than anything, you have to be there, put the time in, and have the perseverance to overcome adversity."
It’s all about hand-selling the beer. It’s an article of faith with these little guys that wholesalers who represent major brands don’t really sell beer. "The mega-houses are ‘pull’ houses," said Chuck Greenstreet, partner at Stockertown Beverage in eastern PA. "They ask ‘How many cases of this, how many of that,’ and then they go back and pull the cases out of the warehouse. They’re order-takers. We push the beer. We match customers and needs with the proper products. A small craft brewer doesn’t have an ad budget; he might have some glasses. It’s a totally different way of selling beer."
Why not? After all, they’re selling a totally different kind of beer. How do they pick the beers they represent? They’re looking for great beers, to be sure, but they’re looking for beers that they can make money selling, too. Masterson looks for the quality/price ratio, and it’s hard to satisfy him these days. "The quality level has risen dramatically," he noted. "When we get somebody pushing a product at a price level that doesn’t match the quality of what’s already on the shelf, we say thanks but no thanks."
Bradley has a list. "After you’re in the business for a while, you know the variables it takes for a product to succeed," he said. "A couple of things I have a keen eye for are packaging, brand name, uniqueness, price, taste, style, information, success rate of comparable products, and reputation. Is it just one thing a new beer has, or is it a sound combination?"
Then once you’ve got the beers, you’ve got to deliver them. One common complaint you’ll hear about small wholesalers is when a small guy signs for distribution rights to a whole state. It’s not easy getting beer all over a big state, but you can get it done. Greenstreet is way over in eastern PA, against the NJ border, but he has some state-wide rights. "Sometimes people come to us, sometimes we go to them," he said. "You fill up a truck and you go out. We’ve done some runs out to Pittsburgh. Everything about it is specialty: specialty beer, specialty distribution."
Masterson’s in a smaller state, but he’s totally committed. "We have state-wide rights to 95 percent of our brands," he said. "It’s a bit of nightmare logistically, but we manage to pull it off. The stores that want to carry the beers understand. I’m in Cape May right now: we’ve come down here once a week for 10 years. You’re either there for them, or you’re not."
The little guys are wired in, they really know what’s going on, because they see it happening. "We’re working in outlying counties now to open up new markets," said Ken Vecenie. "What I’m finding is that what was happening in Pittsburgh 10 years ago is now happening in the outer markets. A guy called me earlier today, he’s opening a beer bar in Punxsatawney. It’s getting there."
It might be getting there too quickly. Masterson is worried about expectations these days. "We need to convince our suppliers that they can’t double their growth every year," he said. "The market is so strong, but everyone’s gotta slow down and get realistic. Everyone wants more taps, and I don’t know where they’re going to come from. It’s just not possible for everyone to get 40 percent growth on draft at the same time. I’m concerned about everyone losing sight of reality."
And in the end, if you work hard, and hustle, and pick the right brands, and build their sales…a big guy might come along and make you an offer. That’s what happened to Little Guys Distributing, in Scottsdale, AZ. Bruce McConnell and his partners wanted to open a multi-tap bar. "But we realized that we couldn’t get the beer we wanted," said McConnell, "that the ‘big guys’ were limiting the market. They had decided to tell the public what would be available." McConnell’s son got a wholesale license, and Little Guys was born.
They were so successful that in two years a big wholesaler made them an offer. But the big guy realized that the little guy had knowledge, contacts, and street credibility, so now McConnell and his partners are the Little Guys Division of Crown Crescent Distributor. "It’s a good deal," said McConnell.
Is it all about the money? "I grew up in it, and it’s exciting to me," said Vecenie. "It wouldn’t be if I were sitting here selling Bud like everyone else."
"My fire burns in this business," said Bradley, "and sometimes I’m so excited about what I’m going to do next I can’t sleep at night. My joy in this business comes from giving my customers the best products available. Our best days
are ahead of us." That’s real beer passion, from one of the little guys.
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