Miller CEO: Retailers Need Distributors More than Ever

Local knowledge is crucial.

The changing nature of the retail environment is making distributors more important, not less, to big chains such as Costco, Miller Brewing Company CEO Tom Long in a speech Thursday to the California Beer and Beverage Distributors.

As big chains both consolidate and expand their footprint, they are becoming more headquarters-centric. For suppliers that means increasingly taking the lead in the relationship.

For distributors it means the opportunity to become retailers’ local market experts. Knowledge and insights are crucial to retailers as they try to develop their brand image and tailor their stores to local demographics. This expertise comes on top of the distributors’ role as the “DSD Army” for retailers (a function that would cost retailers thousands of labor hours to replicate).

From Long’s speech:

“There is a growing need for local insights -- insights that can only be mined from people connected to the community, people who service the stores on a regular basis, people who see what trends are going on locally. So retailers will have a need for distributors who can feed them this type of information. And it’s going to be up to the distributors and suppliers to find a way to make that happen together.”

Brewers can help ensure their distributors get their fair share of growing chain store beer volume by delivering programming that complements the store “brand.” Meeting the needs of big retailers has driven Miller’s increased investment in chain capability.

By delivering value to retailers, brewers and distributors can put to rest some of the fears for the future of the three-tier system raised by the Costco case and other legal challenges.

Again from Long’s speech:

“If we keep our eyeballs continually focused on making our retailers as successful as possible, we will have demonstrated the true economic value that the three-tier system delivers to retailers…and that will ultimately make the Costco litigation moot.”

Beer Marketer’s Insights Express (subscription required) has more about the speech.