Charles Merinoff
WSWA Chairman
AGENDA
• Living My Two Roles
– Chairman & CEO of The Charmer Sunbelt Group
– Chairman of WSWA
• Value of a Distributor
• How Our World is Evolving
• Looking Forward 5-10 Years
• Aligning with key
suppliers
• Building brands faster,
garnering market share
• Delivering exceptional
customer service
• Developing associates
• Externally
– Unique legislative
challenges in each market
– Responsible consumption
– Opportunities & risks
• Drive collaboration across
three tiers to deliver a
healthy vibrant market
• Strong consumer
selection
• Broad range of players:
suppliers, wholesalers &
customers
• Insuring legislative change
involves input from all
constituents
• Responsible consumption
VALUE OF A DISTRIBUTOR
SKUs
Producers
Brands
Suppliers
State
Government
Outlets
Bars
Wine Shops
Package Stores Clubs
Grocery
Restaurants
VALUE OF A DISTRIBUTOR
To the State
• Precise Control Throughout Route to Consumer
Ensuring Quality
• Tax Collection & Requisite Record Keeping of
Location/Quantity/Price
• Advocates for Responsible Consumption
HOW OUR WORLD IS EVOLVING:
CONSOLIDATION
100%
Spirit Supplier Market Share Evolution
(1996-2011)
All Other
Suppliers
80%
60%
40%
Top 4
Suppliers
20%
0%
1996
1999
2002
Source: Adams Liquor Handbook and Market Knowledge
2005
2008
2011P
WHAT’S CHANGING – Supplier Alignment
• Traditionally, distributors heavily focused on
securing supplier relationships
Today
Historically
Many Mid-Sized Suppliers
Few Large Suppliers
Distributors
carrying the same brands
Distributors carrying exclusive
brands with dedicated orgs
Many Customers
Many Customers
• Gain or loss of a supplier makes our distributor
businesses profitable or unprofitable
HOW OUR WORLD IS EVOLVING:
CONSOLIDATION
Wholesaler Market Share Evolution
(2005-2011)
All Other
Wholesalers
Next 5
Wholesalers
Top 5 Wholesalers
Source: Impact Ranking – estimated revenue
WHAT’S CHANGING – Alignment
Traditional Supplier Management Model
Southwest
SVP
West Control
1
SVP
7 Distributor
Contacts
Central
Control SVP 3
Central SVP 6
IL/IN SVP 2
Northeast
Control SVP 2
Northeast
6
SVP
West SVP 3
CA SVP
1
Mid-Atlantic
3
SVP
South Central
5
SVP
Southeast
Control SVP 2
TX/LA SVP 1
FL SVP
1
WHAT’S CHANGING – Alignment
New Supplier Management Model
Charmer
Sunbelt
Business
Unit
Director
AZ
CO
DE
MD
DC
NY
SC
Southern
W&S
Business
Unit
Director
AK
CA
HI
IN
FL
KY
Control
Business
Unit
Director
AL
IA
ID
ME
MI
MS
MT
NC
NH
OH
OR
PA
UT
VA
VT
WA
WV
WY
Glazer’s
Business
Unit
Director
LA
OK
TX
Wirtz,
Martignetti
Johnson &
Other Business
Unit
Director
Franchise
Business
Unit
Director
IL
MA
MN
ND
NE
RI
SD
AR
CT
GA
KS
MO
NJ
NM
NV
TN
WI
WHAT’S CHANGING – Customer Focus
• As supplier-distributor alignment deepens,
distributors are highly focused on customer
relationships
– Brands (and hence both distributors and suppliers)
can only win with customer ambassadorship
– Distributors & suppliers understand value of a
broad customer base – critical for product access
HOW DO WE SEE THE NEXT 5-10 YEARS