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Interview, Part 2: Breakthru President And CEO Tom Bené

January 18, 2023

Yesterday, Shanken News Daily exclusively reported Breakthru Beverage Group’s entry into the California market with a deal to acquire Golden State wholesaler Wine Warehouse for an undisclosed sum.  The transaction is slated to close this spring. In the second part of our interview with Tom Bené, Breakthru’s president and CEO discusses current market conditions for spirits and wine, the distribution giant’s progress in furthering its digital transformation, and the overall outlook for 2023.

SND: How did Breakthru finish out last year, and how has 2023 started off from a business perspective?

Bené: We actually feel good about how we finished the year. We went in cautiously optimistic and ended up finishing very strong. October was not as strong, but November and December came in very strong. Cautious optimism applies to 2023 as well. There are lots of positive trends in the industry, but obviously there are also macro headwinds that we’re all facing as consumers. We started the year excited about some of the new partnerships we have, but also recognizing that the overall industry and market is going to be affected by the macroeconomic challenges, and we’re anxiously waiting to see how that plays out.

SND: What are you seeing in terms of market dynamics in the on-premise?

Bené: We continue to feel bullish about the on-premise side. Food prices didn’t go up quite as much in December as they had in prior months. That segment of the industry continues to have its headwinds for sure, but I always fall back to the fact that consumers love to eat out. It’s a solution of convenience for many of them, whether it’s dual-working households, or people just looking to continue to get out. And it’s still one of those affordable luxuries. We got a great bounceback in 2022, and we’re watching to see if that trend continues this year.

SND: What trends are you seeing in spirits recently, and how is the wine category performing across Breakthru’s markets?

Bené: The lower end of the wine category continues to be a little bit soft, but the higher end continues to do well. In spirits, the spirit-based ready-to-drink products are certainly taking share from other areas. We’re well positioned there with Gallo being one of our largest partners, but many other partners also continue to launch new products in that space, Brown-Forman with Jack and Coke for one. I think spirits will continue to see a nice run driven by innovation. And hopefully the wine business on the lower end is kind of bottoming out and we’ll start to see things flatten and then move forward in a positive manner.

SND: Digital transformation has been a key theme in the middle tier, including the development of your Breakthru Now platform. How is progress there?

Bené: We launched five additional markets last year and we’re very pleased with our results and the feedback we’re getting, both from our supplier partners as well as customers using the platform. So we continue to accelerate it. The marketing platform that exists for our customers to use in conjunction with our suppliers and get insights and information has also been pretty well received. We’ll round out the rest of our markets in 2023.

SND: Are you still using third-party digital partners as well?

Bené: We continue to use Provi, and our position on this is that we try to create choice and options for our customers. Whether they want to order on Breakthru Now or they want to use a platform like Provi or just give the order to our customer service folks, we give them the flexibility to let them do business with us however they like.

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