Friday, December 23, 2011

Interview: Wayne Chaplin of Southern Wine & Spirits

(by Shanken News Daily) Southern Wine & Spirits is the nation’s largest spirits and wine distributor, with estimated revenues of more than $9 billion for calendar year 2011. The company now has operations in 34 states and Washington, D.C., and also has a distribution license for the state of Texas, although it has yet to make a move in the Lone Star state. It’s always a busy time at Southern—even if 2011 has been relatively quiet on the deal-making front, the company is constantly on the move. Shanken News Daily recently spoke with Wayne Chaplin, Southern’s president and COO, about the company’s performance in 2011 and the strategic issues that lie ahead.

SND: How has your business progressed in 2011?

Chaplin: Despite the challenging economy, wine and spirits is still a great business. It continues to outperform many other consumer product categories. When you look at brands over $2 million in sales through the grocery channel in Nielsen data, volumes in wine and spirits both are in the top 10 among consumer goods categories. As for Southern Wine & Spirits, our volume year-on-year is up by more than 5% for both wines and spirits. In dollar terms, our spirits business is up 6% and wine is up by more than 7%. Overall, we’re in a great position to exceed our revenue projection for 2011.

SND: In our last report on the U.S. wholesalers, we reported that you were projecting total revenues of $9.14 billion for 2011. Are you on target with that?

Chaplin: That’s conservative.

SND: How big is your national footprint now? How many states are you in?

Chaplin: Currently we’re operating in 35 markets—including 17 open markets and 18 control states. We’re the only broker in all control markets. In the Pacific Northwest, Maryland, Washington, D.C. and Minnesota, we have joint ventures where we take the lead on sales and our partners leverage their distribution platform. In Texas and Nebraska, we’re licensed but don’t yet have an active operation in either market. We’re challenging the residency requirement in Missouri, and if successful we’ll seek the right opportunity to enter that market as well.

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