Interview, Part 2: Breakthru President And CEO Greg BairdFebruary 24, 2021
In the second part of our interview, Breakthru Beverage president and CEO Greg Baird discusses the potential for an on-premise rebound, the company’s cannabis business in Canada, and the outlook for M&A activity moving forward.
SND: How is Breakthru preparing for the recovery of the on-premise? How difficult will it be to get restaurants back up to speed, considering the resources that were reallocated to the off-premise?
Baird: Unfortunately, the on-premise is not out of the woods, but we are seeing light at the end of the tunnel. Our focus is to help them get back up and running as quickly, as efficiently and as effectively as possible. This means staying on top of local restrictions, which obviously vary by market. Being a supportive partner today includes facilitating creative ways to reach the consumer, such as helping them design and execute carry-out wine, beer and cocktail-to-go programs, or stock up on innovations typically suited for retail, but which now are effective to-go selling solutions. It’s about being more of a consultative partner, which has helped us maintain high service levels despite significant changes to the way we work over the past year.
SND: On the cannabis front, Breakthru has an early start through its Kindred operation in Canada. How has that business developed so far, and what are your thoughts on how the middle tier could participate in cannabis in the U.S. looking ahead?
Baird: Kindred is exceeding our performance expectations. The recreational adult-use market in Canada is young and moving rapidly. You have category expansions, product innovations, and changing regulatory environments, all of which drive a constant adjustment to consumer preference and sales velocity. Our immediate priority with Kindred is growing the share of adult participants across cannabis categories. Ensuring widespread availability of these products and education is essential to growing the consumer base. As recreational cannabis legalization makes its way across the country, we believe that robust federal and state regulatory systems are essential to protect the health and well being of all Americans—regardless of whether they choose to consume. Regulatory frameworks should ensure the same core tenets that have been so successfully achieved by our beverage alcohol system—ensuring product integrity and accountability, safe dosing, and efficient tax collection.
SND: Is Breakthru actively pursuing acquisition opportunities?
Baird: Strategic growth is extremely important to us. We consistently explore opportunities that make sense for our suppliers, customers, associates, and our future. We recognize that change is constant in our industry and we are always open to new opportunities to grow in strategic and thoughtful ways. That includes proactively seeking out like-minded partners to advance our business and offer new and innovative solutions for our suppliers and customers.
SND: Looking longer term, what achievements from Breakthru’s first five years stand out to you as most important, and what’s your vision for the future of the business?
Baird: The foundation for our success so far and what will drive our future growth are our investments in technology and digital capabilities. That includes our marketwide SAP rollout, Business Intelligence SAP HANA, our B2B e-commerce platform Breakthru Now, and leading commercial tools and technology that convert data into intelligence for our associates and partners. We’ve made significant investments to modernize several of our facilities and operational processes, including inventory management capabilities to enable increased efficiencies and enhanced customer service. We’ve strategically shaped our total beverage alcohol commodity portfolio, strengthening relationships across our footprint and expanding on our leadership position with emerging categories such as our Trident portfolio, which specializes in artisanal spirits, and our Yama Japanese beverage portfolio. We’ve continued to deliver for our strategic suppliers while simultaneously growing our beer and fine wine portfolios. In the coming weeks, we plan to share additional details regarding our ambitious fine wine strategy. And, since Breakthru was formed five years ago, we’re proud to have donated more than $10 million to a variety of important causes. In honor of our associates and customers for our five-year anniversary, we’re donating $100,000 on their behalf to six non-profit organizations that address food insecurity, equality, and support for restaurant and hospitality industry workers who have been hit so hard by the restrictions brought on by Covid-19.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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