Challenges? Sure, of course there are challenges. It wouldn’t be the beverage business without challenges. The economy is a challenge. It’s challenging everywhere, but in South Florida, with the housing market in uncomfortable flux and home building off from a spate of post-hurricane rebuilding, it bears particular watching. Good products are on board the trucks, but some of them have maybe already had their greatest growth spurts, so it will be a challenge to keep them flying, not to mention the blocking and tackling of wholesaling—aligning company and employee
incentives, creating route efficiencies and, well, everything.

So yes, the good folks at Gold Coast Beverage Distributors can tell you about the many challenges that face them. But complaints about selling beer for a living in the warmth of winter at accounts that border the beach when the rest of the country is shivering?

Gold Coast has no complaints.

“That puts it in perspective,” Art Friedman, Gold Coast president and CEO admits. “To deliver beer in Miami and Fort Lauderdale while in the middle of the country it’s minus 2 degrees and snowing...” Let’s just say that weather and geography combine for not altogether unpleasant conditions at certain times of the year.

Friedman’s perspective, however, comes from more than a map and a thermometer. He “grew up” in construction and realizes that beverages like the beer, wine and spirits that Gold Coast traffics in are more than a commodity. “People drink them in good times and bad,” he says. “They’re affordable. You can enjoy and relax with wine—escape, whatever you want to call it. There’s always a strong demand for our products. When you compare us to the construction and mortgage industries, our industry is not faced with issues like write-offs. I love the beer business.”

But the challenges do exist for the Pompano Beach, Fla., USA-based wholesaler (proudly describing itself as Florida’s largest beer distributor). And Friedman and his crew are facing them eagerly, even if “the business is softer than it used to be” and even if Gold Coast’s territory has been impacted by “the crazy real estate market” whose dips and dives (a little more treacherous in South Florida after the reconstruction from Hurricane Wilma was over) have made for fewer construction workers, the kind of people who buy a lot of beer.

Still, Gold Coast’s draught business was up in 2007, outpacing packaged growth, which provides the distributor with a point of difference versus wines and spirits, great opportunity for sampling and a platform for the profitable crafts like Blue Moon Belgian White Ale and Samuel Adams to take off.

“Draught is good for on-premise,” Friedman says. “There are good margins on draught.”

The last decade has been good, too, with overall growth steady up to 2007, led by two high-profile imports.
“Heineken and Corona have been our big guns in the marketplace,” according to Friedman, “accounting for big share points.” For a period of 10 or so years starting in the late ’90s, “they were animals.”

And it’s not like they’ve morphed into houseplants either, even if they have cycled out a bit in terms of astronomical strides. Now the brands are enjoying something more akin to “an industry-average type number. We’re adding more incremental growth for Heineken USA than any wholesaler,” Friedman estimates, “but now the numbers are more normal.” Whereas the annual bounce had ranged between 8 and 10 percent, it now figures to clock in between 2 and 3 percent.

Gold Coast’s platinum imports “haven’t run their course,” Friedman cautions, “but when you get to a certain size, you have to be more realistic about what you can attain in a soft marketplace.”

And sometimes reality leads to wine, a segment into which Gold Coast “tipped our pinky toes” by buying a couple of local wine wholesalers and now has mushroomed into a full-fledged business for a house that was heretofore beer.

There may be no sturdier sign of validation that Gold Coast is a wine wholesaler, too, in that it has built itself a strong category relationship with Florida’s major supermarket chain, Publix, which handles some 70 percent of the wine volume in the South Florida marketplace.

Friedman credits Felix Williams, Gold Coast’s executive vice president of sales, for driving the relationship between the companies, a bond built at the store level by supporting execution to such an extent that in 2007 “it opened up the eyes of the category.” Wine, Williams and Friedman agree, is definitely more of a chain game, whereas beer requires “a lot more hands-on selling at the store level.” Store managers call the shots on beer displays. Headquarters have a greater say on wine as a rule, though at Publix, Friedman emphasizes, “the store managers are not afraid of wine,” so Gold Coast better know its vino stuff, too.

Whatever the beverage, “training is the most challenging aspect of a multi-brand house,” Williams assess. “It’s not one size fits all. There are nuances that differentiate the SKU mix you would recommend for a convenience store in Hialeah versus a convenience store on the beach in Fort Lauderdale. You have to think outside the box in every account, question what’s in the cooler, why something is selling, why something else is not. It’s no different when you go in on-premise accounts and understand bottled beer versus draught. It’s too simplistic to go sell Miller Lite and Coors Light and think you’re OK. You go into one neighborhood with one brand and then you drive five miles down the street and you find that brand is not relevant. Plus, when you manage all this real estate, you have to make sure the competition is not cluttering the shelf to grab share.”

It’s all part of the tapestry of challenges facing Gold Coast in South Florida. It’s good then, that there are worse things you could be doing and worse places you could be doing them.

From Beverage World April 15, 2008