Interview: Danny Wirtz, Vice Chairman, Breakthru Beverage GroupApril 19, 2016
In October of last year, two of the leading U.S. spirits and wine distributors—Charmer Sunbelt Group (CSG) and Wirtz Beverage Group (WBG)—joined forces to create Breakthru Beverage Group, a distribution giant with operations in 16 states and yearly revenue of well more than $5 billion. Danny Wirtz, who had been president of Wirtz Beverage, was appointed vice chairman of Breakthru, and has since been driving the integration of CSG and WBG into the new entity. He recently sat down with SND managing editor Peter Zwiebach to discuss how the deal came about, the integration process and what lies ahead for Breakthru.
SND: Why did WBG and CSG decide to come together and create Breakthru?
Wirtz: From day one, when we began talking about a partnership, it was about creating a great company, with aligned values, a shared culture and really trying to create a new model. That spirit of innovation was apparent from the first meeting, and helped carry us through negotiations and to closing. We were very purposeful about the name, and not just some hyphenated coming together of the two, because it really is about creating something new.
SND: What’s the integration process been like?
Wirtz: Integration is never easy, but we’ve chosen the path of taking the best of both companies—and potentially finding a third path in some cases. That’s all still in progress. Beneath the surface, there are tough decisions to be made about systems, finding the best route to market and other areas. The good thing is that both teams are moving in the same direction. Frankly, there haven’t been as many challenges as we might have expected.
SND: Breakthru is active in spirits, wine and beer. Are you realizing synergies across all three categories?
Wirtz: Spirits currently account for around 60% of our business, with wine at 30% and beer at around 10%. In some markets, we have the same truck carrying all three. From a strategy standpoint, anything that allows us to become more relevant to the customer is good. For instance, in the on-premise, to be able to engage with a restaurateur for all three categories makes us a more valuable partner. Considering how much is going on in craft beer, if we put our blinders on to that category, how can we be trusted consultants when it’s such a big part of so many beverage programs? Consumers are bouncing across all three categories, as are restaurants, bars and in certain markets, the off-premise. It’s really only in our tier that the wall is up. Clearly that doesn’t make much sense.
SND: After the Breakthru and Southern Glazer’s deals, everyone is waiting to see what will happen next on the consolidation front. Do you anticipate further moves?
Wirtz: I don’t think we’re ever going to stand still. Right now, we’re very focused on our integration, but we still have a strong appetite for growth. It needs to be smart, responsible and done in conjunction with our supplier partners. We’re always open to it and looking, but it won’t be done for scale or to become the biggest. We want to do it in a way that builds long-term value. So on the one hand, we’re focused on integration. On the other, we have to look at the opportunities out there, and frankly, the formation of Breakthru and Southern Glazer’s have created a lot of energy in our tier.
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