At the beginning of 2016, the US alcoholic beverage industry was forever changed when Southern Wine & Spirits combined with Glazer’s to form what is now the largest North American wine and spirits distribution company. As Southern Glazer’s Wine & Spirits, LLC, the combined company employs more than 20,000 team members with operations in forty-four states, plus the District of Columbia, the Caribbean, and Canada.
“For more than a decade, our industry has been experiencing an increase in consolidation, and we’ve leveraged that trend by making strategic acquisitions to drive our own growth,” says Steven Becker, Southern Glazer’s executive vice president, treasurer and compliance. “We got to the point where we were very strong on both the East and West Coasts, but did not have a significant presence in the middle of the country. So that became one of our priorities, to get into the Midwest and Texas.”
The two distribution giants actually talked about a partnership about eight years ago, but they couldn’t come to an agreement at the time. Regardless, the leadership teams of both companies stayed in touch through the years, and the conversations became serious around 2015.
“Both sides became comfortable with the idea that if we could come together, we could offer more value than anyone else in the industry and truly be the market leader,” Becker says. “This deal just made so much sense because we were so strong on the coasts and they were so strong in the middle of the country. Our footprint just overlapped perfectly.”
Once contracts were signed with Glazer’s, Southern Wine hired PwC as consultants to help with the integration.
“They really did a great job shepherding us through the transition, so once we signed, we had the right structure in place and it was an incredibly smooth transition,” Becker says. “If this deal was going to happen, the scope and scale was so large and important that we didn’t want any hiccups. Once we finalized and closed on July 1, 2016, everyone knew what their roles were. It was smooth and almost effortless.”
Becker’s title changed somewhat with the combined company, adding compliance to his official list of responsibilities, but he notes that the effect on his job wasn’t significant.
“I was always the corporate treasurer. Because I have a legal background, I have been involved in our compliance issues forever,” he says. “I didn’t get as much involved in all aspects of legal, but we operate in a very heavily regulated industry and I was always involved in our regulatory compliance, both on a state-by-state basis and federally. Now, that’s just more formalized.”
And while the company is now larger, it has actually made strategic shifts so that the smaller suppliers don’t get lost in the shuffle.
“We reorganized into regional structures; there’s a whole infrastructure now for the East region, Central region, Western region, and control-state region. In effect, we are running smaller companies, which makes it easier for us to be closer to suppliers and customers,” Becker says. “Our challenge was integrating the two entities so the combination was seamless for customers and suppliers and making sure that we were able to treat all suppliers and customers the same.”
When Becker started with Southern Wine & Spirits in 1985, the company was in three states: Florida (though not state-wide), Nevada, and California (in the southern region). From 1976 to 1992, those remained the organization’s only states, as the company concentrated on building the business and becoming more prominent.
“In 1992, we had the opportunity to buy an operation in Arizona, which wasn’t particularly large, but it was our first foray into a new state in a long time,” Becker says. “From then on, we added a state or two every year for the next twelve years.”
Naturally, some of these additions were more significant than others, with the goal always being to eventually have a presence in each of the five major alcohol beverage consumption states: California, Florida, New York, Texas, and Illinois.
By the time Southern entered Illinois, it cemented the company as a leader in its field, as it was the first wholesaler to operate in three of the top five markets. And it wasn’t done yet. In December 2004, it bought a small operation in New York, which increased its footprint to four of the five major footprint states.
“It took twelve years to enter the Texas market, and the only way it was going to happen was partnering with the Glazer family and the Glazer companies,” Becker says. “Now, we can cross off all five.”
Becker may have a new title, and the company may have a new name, but nothing has changed as far as his drive to continue helping the company grow.
“We now have operations in Canada and the Virgin Islands, which is the first time we’ve been outside the United States. So, that’s something we’ll be looking at and seeing how it goes,” Becker says. “Having an international presence is an interesting opportunity for us. It has different regulations, and we’ve never pulled the trigger before. However, now that we’re operating internationally, that could be the beginning of a different approach or trend for us.”
