Random Thoughts From Chicago
WOW… and they call me Johnny Sunshine ;-) This year’s NBWA convention was an interesting time. First as I have repeatedly noted, all things considered this industry is kicking butt and taking names. In terrible economic times with darn high unemployment the vast majority of distributors are seeing profitability hold, and in many cases it’s even up… many are seeing tougher volume numbers but still quite a few are up in these tough times. Compare yourself to almost any other industry out there (other than those on the government teat) and things look pretty dang good. This is a stable, profitable, and fun industry which is difficult to match. That’s the good news… which wasn’t discussed nearly enough in my opinion.
As for the bad news… a lot of the general session was focused on the existential threats the beer wholesaling industry faces. That’s a big word, existential and its definition in this usage is of, relating to, or dealing with existence, i.e. these threats are threats to the very existence of beer wholesaling. Note that these threats are not to the beer industry in general but specifically to the beer distribution industry. Don’t forget that.
As Jim Koch was quoted by Harry regarding the three-tier system, "Large suppliers don't need it, and large retailers don't want it." Don't look to consumers or legislators for relief: they "don't understand" how the system works. Yikes! The theme of the convention could have been a call to arms… for the battles have already begun. I think I’ve been noting this for the past few years and all I’ve got for it was grief ;-)
Let me once again repeat my words of wisdom… either take your chips off the table and run to the door or prepare your business (and your industry) for long-term survival. Either one is acceptable… nothing else is. A lot of the Chicago talk was about preparing the industry for long-term survival.
And if you want to take your chips off the table, there is still time to get out this year but you’ve got to get moving now. Give me a call. If the exit isn’t your goal, that’s OK too. But if that’s your choice you need to strongly support your state associations and NBWA to help fight the existential threats which are not going away any time soon. You also need to examine your organization to ensure it is maximizing profitability… in uncertain times pocket the money now. In addition, be prepared to step to the plate if any acquisition opportunities present themselves. In a nutshell those are your options.
On a more positive front, as I was hanging around the Joose booth… those who were there will understand… I was tapped on the shoulder by someone I hadn’t seen for a few years and what he said warmed my cold little black heart. He is an owner’s son and he wanted to thank me for pushing him to leave his distributorship to go work where he’d be just another employee… just another regular schmoe. He spent a couple years working for another distributor and said it was the most important and rewarding experience of his business career. He finally knew what it was like to be just “one of the guys” and he loved it. He said one of the most important things he learned was what work-load you can truly expect from an employee. I always tell owner’s kids that in many ways they are screwed at their company… half the employees are going to suck up to you since you’re the owner’s kid. Thus you never really learn what reality is. The other half will try to stab you in the back anytime they get the chance… and again, you never really learn what reality is. The only way to truly learn and experience the “real” world is to leave your distributorship and go work elsewhere.
We spoke for quite some time and my attempt here doesn’t remotely capture his eloquence in describing this profound experience. To top it off he specifically searched me out to thank me. Wow. Experiences like this help make all my travel worth it. For those who follow the wisdom of Dr. Seuss, I almost felt like the Grinch of Christmas fame whose heart grew to twice normal size… almost ;-)
I also engaged in a few craft beer discussions… I was noting that historically beer drinkers drink brands while wine drinkers drink styles… I posed the question, is this a danger to the craft beer segment since they don’t seem as brand loyal as other beer drinkers… as is often the case my associate Steve Cook put his finger on it and noted that craft beer people drink the category… and that concept is driving the exciting growth of this dynamic category. So over many a craft brew we settled on… historically beer drinkers drink brands, wine drinkers drink styles, and craft drinkers drink the category.
Lastly I have to call bull. For those who don’t know what this means, you call bull when what someone is saying simply goes too far. Calling bull means I don’t believe you and I publicly challenge you to defend what you were saying. And who do I reserve this call for? For the hypocrite Terry McAuliffe. I would have publicly called bull at the convention but they stopped taking questions before I could get to the mike.
Why is Terry a hypocrite? During his speaking session Terry was bragging about how much money he makes and how he doesn’t need all the tax cuts of the Bush years. In fact he called for higher taxes rates for all “high income” individuals. I challenge you Terry… no one is stopping you from paying higher taxes. It is quite easy to do and the government has no problem cashing your check. Do you do so Terry? Do you simply file 1040EZ and let the tax burden fall where it may? Or do you spend a lot of money to employ accountants and tax attorneys to minimize your taxes? If you believe what you say why don’t you take the lead? Send the Feds an extra 10% or 20%... or even more if you desire. Instead you lecture others while you do just the opposite. Typical hypocrite politician.
On a side note Terry, why did you decide to locate your new car company in the south? Michigan is hurting and has a lot of excess capacity on the entire automotive front… the United Autoworkers would love the additional work. Yet you move to the south. How does this action square with your supposed political beliefs? Again I hear that “h” word stalking you.
If anyone knows Terry please feel free to forward this to him… I’ll post his response, unedited… but I do reserve the right to comment. What say you Terry? I say bull.