Interview, Part 1: Tom Bené, President And CEO, Breakthru Beverage Group
January 25, 2022Breakthru Beverage Group is the third-largest wine and spirits wholesaler in the U.S., with estimated 2021 revenues of $6.1 billion, according to Shanken’s Impact Newsletter.
The distribution giant enters 2022 under new leadership, following the retirement of chief executive Greg Baird last year. Stepping into Baird’s role as president and CEO is Tom Bené, who took the helm effective in October. Prior to joining Breakthru, Bené, a 30-year veteran of the food and drink industry, led the National Restaurant Association, Sysco Corporation, and PepsiCo’s foodservice business. SND executive editor Daniel Marsteller spoke with Bené on his new role and the business outlook for one of the middle tier’s leading players.
SND: As a veteran of Sysco and PepsiCo, you have long experience leading large organizations. How is the challenge of leading Breakthru similar to those prior roles? How is it different?
Bené: Breakthru is a very large, people-driven organization, and I’m a big believer that our people are our biggest asset. That’s very consistent with my role at PepsiCo. Sysco is another big distribution organization that relies on that big front line of associates to get things done. There’s also a lot of consistency with PepsiCo in that the customer and the consumers are critically important. In terms of what’s different, this is the first time I’ve worked for a family-owned business, rather than a big public company. It’s a chance to work for a private, multi-generational family business that is really committed to the long term and wants to give back to the communities they operate in. The regulatory environment is also a big difference, when you think about all the different laws from state to state, and it’s something I’m still learning.
SND: How is the current business climate for both wine and spirits across Breakthru’s markets? As we approach the two-year mark of the pandemic, what is the outlook for the overall business for 2022?
Bené: We’re optimistic and bullish on the future. We’re continuing to see the channel shift returning back to pre-pandemic levels, although we’re not quite there yet with the on-premise. The off-premise has been strong all along and we’re hoping that continues this year. In wine, there are some good tailwinds at the higher end and challenges at the lower end. Between the supply chain challenges—which might drive some incremental cost increases—and the trading up, there’s some balancing out that’s probably going to still happen there. But we’re very well-positioned for that transition to higher-end wines with all the work we’ve been doing over the past year with our Aspect fine wine division. The spirits side has been growing great for the last two years, with premiumization happening there too. There were of course lots of challenges during the Q4 timeframe around supply constraints, which led to cost increases for everybody, whether it be in packaging, freight, or other areas.
SND: You led the National Restaurant Association prior to joining Breakthru, offering a unique insight into the challenges the on-premise has faced during the pandemic. What changes from the past two years are likely to be permanent?
Bené: There are a couple things that are going to stick. Many states have taken cocktails-to-go and changed their legislative stance to make those programs more permanent. That’s great for the industry because it not only allows consumers access to the beverages they want, but also opens up more takeout opportunities even from restaurants that hadn’t historically been known for that, which is good for both them and the consumer. Virtual brands and ghost kitchens are another area where operators have jumped in with creative ideas and some great brands have been built. And the last thing I’d say is technology, which probably accelerated by five years during the pandemic, whether it’s things like QR codes or being able to order through delivery apps more easily. There’s a whole generation of people who never went online to order or make reservations before the pandemic, but now they do, and that’s not going away.
SND: You mentioned Breakthru’s new Aspect fine wine initiative, which rolled out last year. How is progress there?
Bené: It’s a great opportunity, because we’ve created an environment where our partners’ brands are being showcased and highlighted, and we’re backing that with dedicated selling resources to give our customers access to those great supplier portfolios. It really allows us to educate more both on- and off-premise, as well as leverage our capabilities around e-commerce, data, and analytics. We’ve done something similar, though not quite as far along, on the spirits side with the Trident division, which we think of as an incubator for emerging craft spirits. Both can bring new suppliers into the fold and give customers and consumers access to products that may have previously struggled to get to market.
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