Raise a Glass: Southern Beverage

Employees maneuver forklifts around the climate-controlled warehouses, where it looks like children have been building really tall box forts out of colorful cardboard. And come spring, there will be even more room to make really tall stacks.

The United State’s beer market saw $109.5 billion in overall sales in 2015 (a growth of 0.2 percent over 2014). Hattiesburg and the Greater Pine Belt area are doing their part to keep those numbers on the up and up.

Of the two distributors in the Hub City, Southern Beverage saw 2.5 million cases leave their Hwy. 49 North warehouse last year.

“We’ve had big movement and are proud of the growth the company has seen,” said Chad White, who has been general manager of the Hattiesburg operation of Southern Beverage since 1997. “We’re just blessed to keep growing.”

That growth is evident in a new 30,000-square-foot warehouse going up onsite. The new structure, which should help alleviate some of the storage concerns in the existing structure, is slated for a spring completion.

Southern Beverage is an Anheuser Busch distributor, which means Bud, Bud Light, Michelob Ultra and its other friends, as well as Mike’s Lemonade, and a few other non-alcoholic beverages such as Sparkling Ice and a juice drink.

It also is proud to handle its share of craft beers, especially Southern Prohibition, produced right here in downtown Hattiesburg, Slow-Boat Brewing out of Laurel and Chandeleur, the product of University of Southern Mississippi graduates and twin brothers, Cam and Cain Robards. Chandeleur Brewing Company has its brewery in Gulfport

“Southern Prohibition has done good in this market and we’re thankful that we have it,” said White. During the past year, Yuengling, known as the original craft beer, has been a good fit for Southern Beverage.

“Having that in this house has been a big boost to us,” said White, of the Pennsylvania-based company, who spent two or three months in the area doing research before committing to a distributor.

Yuengling arrived on the scene around Super Bowl time last January. “It’s always been the craft brewery everybody wanted to go with,” said White, who explained that Yuengling isn’t partial to the “craft” name. “It’s the oldest U.S. brewery and everybody wanted them. They came from Pennsylva-nia and saturated the area before moving into Florida, the Carolinas, Tennessee, Alabama and eventually Mississippi. Due to heavy courting by WalMart, based in Arkansas, they settled there and then moved into Louisiana.”

D.G. Yuengling & Son is the oldest operating brewing company in the United States, established in 1829. It is also one of the largest breweries by volume in the country. Based on sales in 2011, Yuengling was tied with the Boston Beer Company, maker of Samuel Adams brands, as the largest American-owned brewery. With headquarters  in Pottsville, Penn., Yuengling produces about 2.8 million barrels annually, operating two Pennsyl-vania facilities and a brewery in Tampa, Fla.

“The Hattiesburg customer is one who wants to drink the craft beers, but hasn’t truly developed the taste for it yet,” said White. “They are still working on developing their palate for that kind of beer.” He said with Yuengling coming in as strong as it has, it has served as a go-between beer for the people who wanted to try craft.

“It’s your Bud Light, Michelob Ultra, Miller Light and Coors Light group, who wanted to drink craft, but really couldn’t taste it,” White said, “so Yuengling has been a go-between beer and has helped develop some drinkers.”

But for the hometown brewer, SoPro has been excellent. “It’s a good hometown brand; people here like it and back it.”

 

Back in the beginning

Southern Beverage goes back to its start in the state in 1939 by Theo Costas Sr. The company started in Jackson and now covers seven major areas and services 27 counties throughout Mississippi. The Hattiesburg plant covers Collins, Bassfield, Prentiss, Oak Grove and parts of Hattiesburg, over to Richton, down into Perry and Green counties and Wiggins… about five or six counties.

What started out as a small family-owned business with one distribution center is now Mississippi’s largest family-owned beer wholesaler, making Anheuser Busch’s market share in the state the strongest in the nation. Other houses are located in Batesville, Yazoo City, Laurel, Magee, Vicksburg and Richland (Jackson), the home office

White said both Mississippi and Alabama are strong states with Anheuser Busch. He also noted that Corona was a great brand in the state and is popular in pockets they don’t necessarily have, but they’ve seen market share go up as a result.

And while the craft beers have made a name for themselves, Bud Light reigns supreme in the No. 1 spot, with Michelob Ultra quickly becoming No. 2, followed by Miller Light, Coors Light and Budweiser.

“Bud Light really outsales Miller, Coors Light and Bud combined,” said White, noting that Mike’s Lemonade also makes a strong showing.

Of the 467 brands Southern Beverage distributes, the Anheuser Busch products are tops, followed by Yuengling, Corona, Mike’s and Southern Prohibition.

White said while Southern Prohibition numbers aren’t yet up close to the other suds, “you’ve got to consider these other brands have been around for a long long time. When Yuengling first came here they did more in one month than Southern Prohibition did all last year, but that’s the nature of the beast,” he said. “This is relatively a small town and outside of this area, not a lot of people know SoPro. But they are growing and who knows where they will be 10 years down the road?”

And while Slow Boat is floating along nicely, what hurts its owners, Kenny and Carrie Mann of Laurel, is the fact is it’s sold strictly in kegs. “He’s not there yet,” said White. “It takes a lot of money for small breweries to get there. This husband/wife team is doing well and they are hitting niches, and getting people to sample their wares, but until you can get to a packaging site, you’re really not going to get any volume, because people need to be able to take it home and drink it.”

Two weeks before Christmas, White also took over the running of the Laurel facility, which covers Jasper and Jones counties, Bay Springs and the Waynesboro area. “I’m still learning that area,” he said.

The Hatt-iesburg plant is second behind the main office in Jackson. “We’ve got a good market here in a perfect situation,” said White. “With the colleges, hospital, doctors, Camp Shelby and a lot of white collar people and outlying areas of blue collar workers.”

The white collar areas outside of town are where most of the concentration of craft sales are, according to White. Outside of that, the sale of domestics, Corona and Mike’s does a good business, because those areas don’t have wine, which a lot of the women like.

SoPro has been on board with Southern Beverage for about four years and “they’ve grown every year with us,” White said. “This year with Yuengling and Slow-Boat, another local brewery coming in, sales will probably be flat, but as long as you can hold your own, you’re doing good.”

White believes the Pine Belt will see other craft breweries surface. Southern Beverage has one coming in from California in February – Stone. And while it takes a good chunk of change to get up and going, White believes we’ll see four or five pop up during the next couple of years. “It will just depend on which make it,” he said.

“Local for us is where we are at, whether Chadeleur, SoPro or Slow-Boat. These are the ones the local people want. Who cares about a craft beer that comes out of Texas, unless there’s a local connection? We want to be local.”

With the Raise Your Pints movement starting in the Hub City, SoPro has done a very good job at what they are doing with Suzy B being its most popular offering, according to White.

“But then Yuengling is doing a good job also with a local rep, who lives in town and is a USM grad. It’s a plus for him and I’m glad he’s doing what he’s doing.

But White believes the beer culture in Hattiesburg will always see growth, whether craft or domestic. “We have the right mix here to make beer popular,” he said.

The end of July is big for the company and they also see a spike at the end of February into March, also around Christmas and New Year’s and the Super Bowl. “And Easter is now pretty big,” he said. “And three-day weekends are big – Memorial Day, Labor Day etc.”

The summer is also popular, but things tend to be slow prior to Christmas when people are spending their money to buy presents and August is slow with people going back to school.

“We can see where people spend their beer money,” White said. “They don’t have $20 to spend, but they do have $5, so the volume is going to fluctuate like that.”

 

The daily routine

Southern Beverage has trucks leaving out every day. Following presales, stock is pulled and stacked, loaded onto trucks ready for drivers to arrive and leave out early in the morning. In a week during regular times, they’ll see 25,000 cases leave the facility (about 4,500 cases a day), while during peak months it’s as much as 35,000 cases (approximately 7,000 a day). Some delivery patterns are Tuesday/Friday, Monday/Thursday,  Monday only or Wednesday only.

WalMart gets deliveries twice a week, as do other bigger stores.

 “The Keith’s Superstore just up the highway may sell 600 cases of just my brand in a week,” White said. “Overall we have about a 67 to 70 percent share of the market. In town, it’s a bit weaker because of the craft beer.

“That’s why when you go into a grocery store that stocks a lot of beer it confuses people, especially if they want to try something new.”

He noted that the fact that Southern Beverage carries cans, bottles and kegs, which go to restaurants, is also a big plus.

The new expansion, slated for a spring completion, is the result of outgrowing their existing building, which isn’t that old. “But it’s exciting for the beer industry and for Hattiesburg. It means growth,” White said.

He believes the beer industry will always grow, “unless something happens to the population.”

“Of course you’ll have new drinkers coming in and it’s the tastebuds of the new drinkers that the breweries are fighting for,” he said. “A new 21 year old… kids have to figure out what they are going to try first – beer, wine, vodka.”

White said for the last four or five years, a lot of drinks have been on the sweet side with Lime-O-Ritas, wine coolers and the like.

“Back when I was in college wine coolers and  Boone’s Farm got big and died down, but the last several years, we’ve seen the sweet stuff come back. It comes in cycles and we’ll see the sweet stuff fall off. Crafts are coming back and picking up.”

White said there will always be a battle, whether someone wants to try wines, spirits or beers.

“I think that’s what our breweries are going to fight for and figure out where to go. It’s an ever-changing business and in order to keep growing, you have to have change. The craft industry is going to have to change. What sells is what’s new, so drinkers are going to want to try what’s new.”

White mentioned SoPro’s new schedule that will debut a new beer every six weeks, starting this year.

“That should help pick up sales and will be popular for customers, who want to try something different,” White said. “It’s the occasional drinker who gets the new stuff. The guy who comes home every day from work with a six-pack has a Bud Light in his hand. He’s not going to drink the craft. It’s not your everyday workers, but the guy at the bar, who drinks craft. The ones who drink at football game or a party, where a bigger package allows them to drink a lot will drink domestic.

White noted Michelob Ultra, which he “has done something in Hattiesburg. They’ve been in the double digits for the last five years. It’s easily drinkable, has low calories and everybody loves it. And it has more alcohol than Bud Light.

“It’s just an ever-changing business, and every day is different,” said White. “We’ll just have to wait and see what happens.”

 

 

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