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Interview, Part 2: Breakthru President And CEO Tom Bené

January 26, 2022

In the second part of our interview, Breakthru Beverage Group president and CEO Tom Bené discusses the middle tier’s e-commerce drive, as well as supply chain issues and the possibility of more M&A activity moving forward.

SND: Breakthru has placed an emphasis on e-commerce initiatives in recent years, as much of the transactional part of the drinks business moves online. What can you tell us about the status of those efforts and Breakthru’s plans in the e-commerce space for 2022?

Bené: Huge growth is happening in this space. Rabobank had some numbers out there showing $6 billion in beverage alcohol e-commerce for 2021, more than doubling from 2019. Even with that growth, it’s only about 4% of off-premise sales going through e-comm, but it’s going to continue to grow. We’re rolling out our own proprietary system called Breakthru Now. It’s currently in four markets with another coming online in early February. And we’ll get to the majority of the rest of our markets by the end of the year. It’s accelerating dramatically. Customers and suppliers have access to a platform that puts all the information they need in one place, as well as marketing materials and a much smoother and simpler ordering process. In addition we’re partnered with Provi on the B2B side—and work with Instacart, Drizly, BottleCapps, and so on—so even where our proprietary system isn’t running yet we’re active in the e-commerce marketplace.

SND: M&A activity has continued lately in the middle tier, with Breakthru’s latest move being to acquire Missouri’s Major Brands. Do you foresee significant M&A opportunities for Breakthru as a possibility over the next year or two?

Bené: We’re very focused on growth both organically and through M&A. Ultimately we want to be known as the distributor of choice for the supplier community. We need to continue to improve our position in the markets we’re in today, enhancing our portfolio and our capabilities. And then secondly, we want to grow through M&A. We’re incredibly excited about building out our footprint in the Midwest with Major Brands. That’s step one, but we certainly have the ambition to grow further, get more scale, and ultimately be able to serve our partners in more geographies. We’re absolutely committed to growing in additional markets.

SND: Supply chain and labor issues have been a factor in the drinks business lately. Where do you see that situation headed?

Bené: On the labor side, there’s more work to do than ever, so it’s not about just having the same number of employees you may have had two years ago; we need even more employees because we’re growing. That will continue to be out there as a challenge for us. But I certainly like our chances as an employer given the environment we have here. More broadly, this was a situation where the global economy was somewhat shut down for a period of time and just can’t ramp up fast enough. It’s not just our industry, you’re seeing it everywhere. I think it’s already starting to get a little bit better, but these things take months sometimes to finally get back to some sense of normality.

SND: How are you addressing the topic of diversity, equity, and inclusion at Breakthru?

Bené: It’s very impressive, the commitment that’s been made by the families and the management here, but probably more important is the passion and the engagement of the organization around the DEI efforts. They’ve stood up three strong associate resource groups: one for Latinos, one for Black Americans and also one for women. We’ve also accelerated our efforts around family leave and maternity leave for 2022. These efforts are important not only inside the company, but also in terms of how we show up as a business in the marketplace every day.

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