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Interview: Wayne Chaplin, CEO, Southern Glazer’s Wine & Spirits

March 21, 2022

Southern Glazer’s is the largest distributor of wine and spirits in the United States, with a footprint of 45 markets and projected 2022 revenues of $24 billion.Amid staunch challenges over the past few years—including the pandemic, supply chain issues, and fluctuating economic conditions—the company has continued its long-term expansion, stoking growth in hot categories like Tequila, Cognac, North American whiskey, and sparkling wine. Southern Glazer’s has also rolled out its Proof e-commerce platform nationally, sharpened its focus on fine wine and upscale spirits, and entered the evolving CBD category, among other moves. SND executive editor Daniel Marsteller spoke with Southern Glazer’s CEO Wayne Chaplin for an update.

SND: What’s your perspective on overall market conditions at the moment?

Chaplin: The market remains very hard to predict. With Covid starting to loosen up, we’re seeing the on-premise come back really nice and strong, especially on the premium end, which is nice to see. Obviously there are certain categories that have been really super-powerful lately—super-premium Tequila has just been on fire, and North American whiskey also remains very strong. Cognac and Champagne are also hot categories. We’re still seeing a lot of really good activity around Scotch, and in vodka Tito’s is just an incredible powerhouse. The on-premise is coming back, but we’re still thousands of on-premise customers less than we had in 2019, so that’s been a real change to our route to market. The off-premise is continuing to hold ground and it’s premiumizing as well. Overall the business has been very healthy.

SND: What are you seeing in the wine market?

Chaplin: On the wine side, the above-$15 category has been incredibly strong. A lot of people are talking about gloom-and-doom around the wine business. We’re very positive about the opportunities. Not only above $15, but also about the need to continue to refocus on wines below $10 to make sure that the wine business stays healthy for the long term. We continue to recruit new drinkers into the wine category.

SND: Are the supply chain issues across the business ironing out at all?

Chaplin: In 2021, obviously the supply chain was a huge issue. We had more out of stocks than I could remember in our company’s history, and it’s not over yet. Imports especially continue to be very difficult. And then, because of the increased business over the last couple of years, suppliers’ base inventory stock levels are lower than before. So we do have out of stock issues based on supply itself in addition to the actual supply chain. It looks like we are going to continue to deal with that during 2022.

SND: Southern Glazer’s has been on a mission to leverage its e-commerce capabilities in recent years. What’s the update on that area?

Chaplin: The continued expansion around our Proof e-commerce platform has been incredibly well accepted by so many of our on-premise customers and off-premise general market customers. We really believe that our in-person salesforce is our biggest asset, and we are never going to digitize the relationship between a salesperson and the customer. But we believe that e-commerce can be an important supplement to that relationship to make the transactions between a salesperson, the company, and our customer more efficient and a lot simpler. In addition to independent on- and off-premise, we’ve rolled Proof out to the national account on-premise as well.

SND: Last year, Southern Glazer’s launched a new SG+ initiative aimed at providing enhanced service across its fine wine, artisanal wine, craft, and luxury spirits business. How has that effort gone so far?

Chaplin: The fine wine segment is really one of the key pillars for Southern Glazer’s. It always has been. We continue to focus on fine wine. We believe there’s a huge opportunity there to serve our on-premise and high-end retail customers. We’ve created our Signature division for fine wine and Domaine & Estates for luxury wine. We’ve begun to roll those out across the country, and they are doing very, very well for our supplier partners and continue to help us build that segment of the business.

SND: Southern Glazer’s is also active in the developing U.S. market for CBD. Any news on that front?

Chaplin: We’ve made some nice progress on the CBD side, and we’ve created some very strong relationships with a lot of the top players. This is a business that we do believe will be a large segment for us to participate in in the future. It’s coming a little bit slower than we had hoped, but I think back to 50 years ago when fine wine was a very small segment and how it took time to be embraced by the consumer, and I feel the same way about CBD. It’s early days. We’re going to continue to invest behind it, and we believe it’s a big opportunity going forward.

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