Distributors Sound Off on Trucking Shortage, Legal Weed and More

FILED AUGUST 17, 2018

Dear Client:

Earlier this month, we had a few distributors on the hot seat to talk about all things "productivity" at our Distributor Productivity Summit.

One of the most burning questions: How are they dealing with the trucking shortage -- getting and retaining good route drivers? Commercial Drivers Licenses-holding workers seem in shorter supply due to all sorts of competition, and more.

COLUMBIA: WE'RE THROWING MONEY AT EVERYONE. In the Pac Northwest, Columbia's VP of Corporate Supply Chain & Strategy, Bryce White, said they're "throwing money at everyone" -- at least, to retain and attract good drivers (and those with other special skills). They're "trying to give everyone bonuses," he said, particularly as these guys are in high demand. "The railroad is offering a $20,000 signing bonus for engineers," for example, so they've "gotta be competitive with wages."

Another piece: "we wanna give people the best trucks ... we spend a tremendous amount of capital on fleet [to] make sure people are driving the best trucks, [with] the nicest graphics."

And there's a certain amount of cache to being a beer truck driver. "These are like adult ice cream trucks. ... with lots of cool perks." If workers want to come in as a merchandiser, for example, and they want to get their CDL, "we'll pay for it, get you trained," said Bryce -- and those guys tend to stay longer.

BEN E KEITH RIGHT SIZING THEIR TRUCKS. Ben E. Keith VP of operations, Paul Holton (based in Texas), said they're looking at several options to deal with the trucking crunch, including trying to start a CDL school.

"We're also looking at our routes, what their cube and weight is," and seeing if they can move to non-CDL.

"Our volume per truck is getting less. So we're looking at those volumes, making sure we're right-sizing the truck."

Speaking of shortages, panelists were also asked about the dearth of overnight workers. With some state laws, they said, overnight workers don't even show up - sometimes up to 30 or 40 out of 200 workers a night, said Bryce. The solution? They're trying for more automation.

WHAT ABOUT LEGAL WEED? Another hot topic: Is legal weed a headache for driver sobriety? Ryan Burke of River City Distributing said they haven't had a lot of drivers fail a random test, though "I think it does keep some from going down the CDL path," he said. Bryce said they only test their drivers for weed at Columbia, but for other departments, what they do at home is their business, he says.

CANOPY GROWTH CEO DISHES ON STZ DEAL, HOW BEV ALC FEARS CANNABIS AND MOVING QUICKLY ON A LEGAL WEED MARKET

Yesterday, Canopy Growth CEO Bruce Linton got real specific about their relationship and plans with Constellation Brands, who of course this week announced another $4 billion investment in the Canadian marijuana company.

Bruce got dishy on the STZ deal with a Marijuana Business Daily editor, Matt Lamers, at MJBizConINT'L in Toronto. MBD reported the chat.

The way Bruce talks, their arrangement sounds almost like a prenup. As important as what it will focus on, is what Canopy will protect as its own, it seems.

STZ IS THEIR "SOLE PARTNER FOR BEVERAGES" -- ONLY. For example, in answering how Constellation and Canopy defined the deal, Bruce said specific domains were important. Like, Constellation is their "sole partner for beverages, but if we wanted the same outcome not in a beverage, that was all our business," he said.

They made "really specific boundaries" regarding "how intellectual property was created and shared and what duration of access people had."

The deal apparently took close to a year to construct, "so that everybody would understand where they could play and where they couldn't play (so) the conflicts would be minimized."

MOST BEV ALC "FEARS" CANNABIS, SAYS BRUCE. Though most bev alc companies, in Bruce's opinion, fear cannabis, Constellation did the "progressive" thing by jumping in.

In contrast to the STZ approach, Bruce poo-poo'ed the reaction that many other beer companies have taken: the "committee" approach.

He conjured a hypothetical shareholder meeting at such companies.

"Somebody's going to say, 'What is our cannabis plan?' They'd say, 'We have a committee.' You want to fire that person, right?"

His point: "What's the interface between an entrepreneurial startup marijuana company and a really old liquor company with a committee? How well does that work?"

HOW WILL THEY SPEND THE $4 BILLION? But while this is really a global deal, Bruce seemed to give a hint as to how quickly they could be prepared to move if and when the U.S. market were to federally legalize marijuana.

Answering how they'll spend what he called their "rocket fuel" of an investment, he replied: "We're looking at all the countries that are open to legalization, but we're also looking at the catalyzing events that can cause a country to be open to it. And then how fast can you move on it." U.S.A.

BEER DRIVERS SAVE LIFE OF SUICIDAL JUMPER

Route drivers are the salt of the earth. They drive and deliver, but they also sell and interact with accounts and have a sympatico that is rare. So it was fortunate that two Breakthru route drivers (MillerCoors distributor) in St. Paul, MN saw a man clinging to a fence on a bridge and stopped to talk to him. According to the Pioneer Press, Kwame Anderson saw the man clutching for life and asked, "Hey, what are you doing? If you're thinking of jumping, you don't have to jump."

But the man told Kwame, "You don't know me, you don't care. Why are you trying to save me?" the 29-year-old recalled. Kwame responded, "If I didn't care I wouldn't be here right now." Kwame, who moonlights as a comedian but is a beer salesman with Breakthru by day, channeled Denzel Washington when he played a negotiator in "Inside Man." So he knew to engage and develop a rapport. He learned the man was from Chicago: "Chicago's tough,'" Kwame said. "I said, 'I grew up on the East Side of St. Paul, in the hood just like you.'"

Then Kwame showed his trump card. "If you come down from there, do you want to get a drink with me and talk about what's going on? I have a pack of Coors Light for you. Follow me.'"

That case of Coors Light -- and Kwame's quick thinking -- most likely saved this young man's life. We dedicate this issue of BBD to Kwame Anderson and his fellow driver Jason Gaebel, who cared enough to stop and help a fellow man in dire straits. And we invite them both to an all-expenses paid trip to the Beer Industry Summit at the Hotel Del Coronado in January. (I'll speak with Rocky Wirtz about the details -- call me).

A policeman at the scene said, "Beer has been bringing people together for a long, long time. Today, it brought people together in a life-saving way." Amen.

WHAT YOU MISSED AT SIERRA NEVADA'S SALES MEETING

Craft Business Daily was on the ground in Asheville this week to report on Sierra Nevada's National Sales Meeting. For those of you that missed our coverage, or aren't subscribed to CBD, we've opened up the two issues below. Check them out:

Sierra Nevada Investing Millions to Tell "the Greatest Story Never Told"

Hazy Little Thing the "Biggest Opportunity" For Sierra "since Torpedo"


Until Monday,

Harry, Jenn, and Jordan

"Life is short. Smile while you still have teeth."

- Mallory Hopkins

BEER SUMMIT 2019 REGISTRATION OPEN. Join us for the 16th Annual Beer Industry Summit, January 27 - 28, 2019 at The Hotel del Coronado in San Diego, CA. We are offering an early bird discount of $200 off the full price if you register now. Speakers TBA.

Register here: https://www.beernet.com/beer_summit.php

Or give Jessica a ring at 210-805-8006. Looking forward to seeing you there.



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Today's Sell Day: 13
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Sell days this month last year: 23
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This month last year ended on a: Thur.
YTD sell days Over/Under: +1

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