For most companies, a mission statement hangs framed on the wall serving as a guide for employees and a guideline to customers. For Kohler Distributing Co. (Hawthorne, N.J.) its mission statement serves the same purpose, but “is something we stay focused on,” says Frank Politano, vice president of sales and marketing. “It’s our driving force throughout every department in the company.”

Politano adds that you might even say Kohler’s four-pronged mission statement serves as the ingredients for its “recipe of success.” He credits the company’s focus on execution, customer satisfaction, supplier partnership and integrity for its 16th year of consecutive financial growth and its 55 percent share of its four-county market—Bergen, Passaic, Sussex and Morris counties—in northeast New Jersey.

The second-generation family-owned business that was purchased in 1947 by Andy and Irene Graham has grown from a company that sold 50,000 cases annually to more than 5.5 million cases and generated $102 million in sales in 2007, earning its rank as one of the top 50 beer wholesalers in the United States, relays the company.

At the core of the wholesaler’s recipe are its top-selling brands—Molson Coors (Coors Light, Blue Moon, Killian’s, Molson); Crown Imports (Corona, Corona Light, Modelo Especiale, Negro Modelo); Heineken USA (Heineken, Heineken Premium Light, Amstel Light); Boston Beer Co. (Sam Adams, Twisted Tea); Yuengling; Mike’s Hard Lemonade; Sierra Nevada; Spaten and Carlsberg.

“We really have a great portfolio,” says Gary Graham, Kohler president and general manager. Graham and his brother, Scott, vice president of operations, took over the company in 1983 when their father retired. “Keeping a strong management team that knows the market” and “keeping them motivated and focused on our key brands” has allowed Kohler to provide second-to-none customer service, says Graham.

Staying focused on its execution of product offerings, Kohler, a 60-truck operation, has recently expanded its beer portfolio to include specialty beer brands, adding crafts as well as import beers like the Hofbrau brand from Germany and Erie Brewing Co. based in Erie, Pa., to reflect the current trends in the market, notes Politano. “We’ve remained very diligent, disciplined and focused on our core business and we’ve been very careful in choosing our suppliers and very careful in our business expansion plans,” he says.

Kohler recently expanded its business to include a wine division in 2005. Kohler’s wine unit, A.I.G. Importing Co., led by vice president Tony Chelpaty, is run as a separate company and came to fruition as a result of a consolidation among wine distributors in New Jersey, explains Politano. A.I.G. Importing offers wines from Chile, Argentina, Italy, Spain, Germany, France, Peru and Australia.

Kohler made some in-house changes as well. Within the last 14 months, the wholesaler has become more focused on segment selling to strengthen supplier partnerships. It dedicated two on-premise specialists and an off-premise impact sales representative as well as four sales and merchandising draft specialists. “There are a lot more on-premise chains coming into the market, a lot of off-premise mass merchandisers coming into the market, and draft is becoming a more important part of the retailers’ portfolio,” says Politano. (Kohler currently has 44 percent of all draft lines in its entire trading area and devotes more than 40,000 square feet to the refrigeration and storage of cooperage.) “So, we’ve made sure we are reflective of what is happening in the marketplace.”

Kohler employs 14 route salespeople and 10 merchandisers, plus five brand managers to oversee the company’s more than 70 brands from 20-plus suppliers. Brand managers not only focus on execution and sales of brands, but also programming and marketing. Dan Downing, district/brand manager, responsible for the Molson Coors portfolio in addition to Sierra Nevada, Spaten, Mike’s Hard Lemonade and Carlsberg, says that the brand manager system is one thing that makes Kohler successful. “We come up with a plan and then the whole company is committed to it and that revolves into our standards,” he says. “Right from the top, from Gary and Frank right on down through the system we are all involved from the beginning of the process to the end… Everything is done as a team.”

It’s that team effort and feeling of integrity that translates to the everyday interaction between Kohler’s 160 employees and its customers. “Our salespeople see our top customers a minimum of twice a week,” says Politano. “We have one merchandiser per sales route, so in a given week a customer can see a salesperson twice, a merchandiser twice, speak to customer service once and see a driver twice. That’s a lot of Kohler people walking into an account.”
Being able to keep up with the needs of customers and suppliers has been one of Kohler’s strengths over is 60-year history and the company continues to invest in its employees to keep outperforming the industry. Despite challenges the wholesaler faces with consolidation on the supplier side of the business—the recent joint venture between Molson Coors and SABMiller, the Crown Imports takeover of Corona brands and the leadership changes at Heineken USA—one thing remains the same and that is Kohler’s employee stability. Politano estimates that about 80 percent of the company’s most recent promotional cycle was filled with in-house employees.

The future for Kohler is one of expected continued growth. It recently built a 190,000-square-foot, state-of-the-art warehouse and offices in Hawthorne and has plans to expand its territory as well as its portfolios beginning with its wine division and additional imports and crafts, notes Politano.

“We can look back at our mission statement and say that we really put plans against those four things—execution, customer satisfaction, supplier partnership and integrity,” he says. “It is a recipe of success for us.”

VITAL STATS
KOHLER DISTRIBUTING CO.
PRESIDENT & GM: Gary Graham
HEADQUARTERS: Hawthorne, N.J.
’07 CASE VOLUME: more than 5.5 million
EMPLOYEES: 160
GOALS: To remain committed to the growth of all current and new brands through the continued development of people and focus on execution while maintaining the highest level of customer satisfaction, supplier partnership and integrity.

From Beverage World January 15, 2008