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2018 Wholesaler of the Year: Hand Family Companies

Zoom in font  Zoom out font Published: 2018-10-11  Views: 6
Core Tip: It all started with a case of Oertel’s ’92. Shortly after the end of World War II, Raymond C. Hand began working for a local distributor selling beer out of a pickup truck in Clarksville, Tenn.
It all started with a case of Oertel’s ’92. Shortly after the end of World War II, Raymond C. Hand began working for a local distributor selling beer out of a pickup truck in Clarksville, Tenn. On March 22, 1949, the former wholesaler employee took his passion for the beer business to the next level, founding Ideal Distributing. Through hard work and perseverance, in 1956, Raymond C. Hand got the break he was looking for when he was awarded distribution rights for St. Louis-based Anheuser-Busch (AB) in an eight-county area surrounding Clarksville.
 
After Raymond C. Hand passed away from Lou Gehrig’s disease in 1961, his 22-year-old son, Charles W. Hand, dropped out of college and took over the family business. Exponential growth followed, and in 1985, nearly 25 years after Charles Hand assumed the mantle of leadership, the company achieved its first major milestone: selling 1 million cases.
 
But for the second-generation wholesaler, that was just the beginning. Under the leadership of Charles Hand, the small, regional wholesaler acquired an AB wholesaler in Cookeville, Tenn., in 1996, and continued pursuing strategic growth opportunities for Budweiser, Michelob, Busch and other Anheuser-Busch beer brands.

In recognition of Charles W. Hand’s dedication to customer service, the renamed Hand Family Companies was recognized as the Anheuser-Busch Tennessee Wholesaler of the Year five times: in 1985, 1991, 1996, 1998 and 1999. It also was named a Key Wholesaler by Anheuser-Busch InBev (A-B InBev).

Charles Hand’s son, JR Hand, who earned a degree from Vanderbilty University, joined the company in 2003, and its upward trajectory continued. From 2003 through 2013, the wholesaler’s annual beer volume jumped from 4 million cases to 17 million cases.

In 2009, JR Hand became equity manager and assumed the role of president and chief executive officer (CEO), becoming the third generation of Hands to lead the company, while serving as the driving force behind several acquisitions. As chairman of the Board of Directors, Charles Hand still is actively involved in the company’s daily operations.

JR Hand says the decision to work alongside his father was easy. “Dad and I sat down as a family and discussed if I wanted to be involved in the family business,” JR Hand recalls. “My dad has done, and continues to do, an amazing job with this company. In the beginning, there was so much consolidation going on with suppliers and distributors in the beverage industry. We decided to go ‘all in’ and be with distributors on the acquiring side. It has worked out extremely well, really beyond our wildest dreams.”

With nearly 70 years of experience under its belt, the Hand Family Companies now has distributorships in Tennessee, Kentucky and most recently, Illinois. The company has about 1,100 employees, a case volume of 40 million, annual sales of $650 million and represents about 200 suppliers — from A-B InBev to numerous import and craft beer players, JR Hand says.

“Today, we handle about 2,650 SKUs in Illinois and about 220 SKUs in Tennessee and Kentucky, including alcohol and non-alcohol brands,” JR Hand says. “My vision for this company is to be the best beer distributor, and really the best beverage distributor, in the industry.

“I’m very proud that we do things very differently,” he continues. “We’re not afraid to react very quickly and to think outside of the box and you know there’s not many people out there who are doing it the way we’re doing it. We have some of the best brands in the world and it’s our job to get them out there. I think our customers really enjoy doing business with us.”

Its rich history, diversified portfolio and commitment to providing best-in-class service are among the reasons that the Hand Family Companies was named Beverage Industry’s 2018 Wholesaler of the Year.

All in the family
The decision to change the wholesaler’s name from Ideal Distributing to Hand Family Companies originated from a roundtable discussion about how to best represent the company, suppliers and brands.

“We had recently finished with several years of acquiring distributorships and brands under separate entities and made the decision that, moving forward, we needed to bring all of our wholesalers together under one umbrella — the Hand Family Companies,” JR Hand explains. Two of JR’s sisters, Charlsie Hand and Aim-ee Hand, also work for the company, serving as property manager and office manager, respectively.

Together, the Hand family and its dedicated employees have grown the company into a multi-state beer and beverage distributor operating seven plants in three states and covering roughly 23,000 square miles.

Despite relatively flat sales in the overall beer market, Hand Family Companies has continued to flourish through organic growth and acquisition of beverage distribution operations in Tennessee, Kentucky and Illinois.

In addition to its 82,400-square-foot headquarters in Clarksville, Tenn., and the aforementioned Cookeville, Tenn., location, which operates a 71,000-square-foot plant, the company expanded operations with a Chattanooga, Tenn. 100,500-square-foot plant, and 46,000-square-foot plant at its Hopkinsville, Ky., location.

Perhaps the most dramatic and challenging acquisition in the Hand Family’s history came about five years ago with a series of moves that created Chicago-based Lakeshore Beverage, an acquisition that would not have occurred without Redwood Capital, JR Hand says. The Hand Family’s Lakeshore Beverage distributes beer, wine, artisanal hard ciders like McKenzie’s Original and Black Cherry, Goose Island IPA and Founders All Day IPA and several non-alcohol brands like Essentia, San Pellegrino and several LaCroix sparkling waters in flavors like Berry, Lime, Orange and Cran-Raspberry.

One of the largest beer distributors in Chicago, Lakeshore Beverage is an offshoot of two companies. With help from private equity firm BDT Capital, the Hand Family acquired A-B InBev’s 30 percent ownership in Chicago City Beverage and also acquired River North Sales and Service to found the new beverage distributor.

When he looks back on the company’s success, JR Hand says he’s most proud of the Hand Family’s ability to adapt to different markets. “As we’ve grown, we’ve gone from a very small, rural town to a large city like Chicago,” he explains. “We’ve entered new markets with our eyes wide open, and we do our best to adjust to the particular market conditions. If we see something we like in a company we’re acquiring, we integrate that into our way of business.

“It’s interesting because many of our functions are now centralized out of Clarksville,” he continues. “Last year, we handled more than 32 million cases of beer — including 23 million cases in Illinois alone — and I think we’ll see a volume increase this year of around 2 percent.”

Along with a Chicago-based 40,000-square-foot headquarters and sales operation, the company has three distribution plants in Illinois: Bloomington (40,000 square feet), Arlington Heights (260,000 square feet), and Chicago (285,000 square feet).

“Our Illinois warehouses run three shifts and are open 24 hours, Monday through Thursday,” JR Hand says. “The plants in Tennessee and Kentucky run two shifts, Monday through Friday. We are operating at 85 percent capacity during our peak inventory but have plans to add on/build facilities in Bloomington, Halsted and Arlington Heights.”

As the Hand Family Companies continues to expand, its CEO says it will be looking to modernize its operations.

JR Hand notes that employees are picking and loading more than 1,300 kegs a day, and a vacuum pick system in its Chicago location is “dramatically lightening the load” of the kegs, reducing the number of injuries for pickers.

“For picking, we use a combination of material handling equipment from a layer picker, forklifts and walkie riders. Pickers use VIP’s ‘easy pick’ software for picking and loading,” he adds.

To bring the suds and other products to bars, restaurants and retailers, the Hand Family Companies operates a fleet of 225 trucks and 230 trailers out of nearly 60 loading docks.

Tapping into growth
Contributing to the Hand Family Companies’ growth has been its fortune to distribute well-known beers that are backed by years of quality and commitment to brewing. “We represent some very large breweries in Anheuser-Busch and represent some very, very small breweries. We are a sales organization so the most important thing is that we sell very well. We make sure that our folks come in with a lot of beer knowledge, and if they don’t have that, we hire talented, smart people and we teach them.

“The great thing about our size is that we are able to leverage our 70 years of experience with our employees, our customers and our brewing partners,” he continues. “We have a lot of advanced technologies that smaller distributors just can’t offer, and I think we bring a level of sophistication that makes breweries and our customers happy. We are the local beer knowledge for the people we represent.”

The company’s portfolio of nearly 2,875 SKUs is expanding based on alcohol and non-alcohol trends. For example, most of the non-alcohol products are still and sparkling waters, aligning with today’s beverage market trends, JR Hand says.

To date, the portfolio is comprised of roughly 90 percent alcohol brands and 10 percent non-alcohol. The company’s core brands include AB-InBev, Pabst, Constellation, Diageo, Gambrinus, Yuengling, Bell’s, Founders, Dogfish Head, Boulevard, Duvel Moortgat, New Belgium and many more.

“Michelob Ultra, Modelo, Diageo, LaCroix and Essentia are some of our hottest brands/suppliers,” JR Hand says. “We sell it all — domestic, imports, craft, flavored malt beverages and non-alcohol products. We have some new local craft suppliers that are doing very well in their respective regions.

“With craft brands, we look to our more craft-centric accounts and then discuss with the decision makers about how their market is doing, what their customer preferences are and what makes the best business decision for all parties,” he continues. “The beauty of having such a great portfolio like ours is being able to offer some of the best brands available for any market or consumer.”

When deciding whether to add a brand to its portfolio, JR Hand notes the company tends to look for similarities with other successful brands/suppliers. “Does it fill a hole in our portfolio?,” he asks.

The CEO is pleased with the company’s growth trajectory but notes “we aren’t going to chase down opportunities that don’t make strategic sense.”

He adds: “I’ve been at the helm since 2009 and we’ve built out an infrastructure that has allowed for growth, but we’ve done it very methodically and with a lot of calculation and skill so as to not bog down our other businesses. It’s very satisfying that we’ve grown from a small business into one of the larger wholesalers in the country.”

A helping ‘hand’
In addition to growing sales, the Hand Family Companies’ mission also is focused on giving back to the communities where the company lives and works.

JR Hand serves on many business and charitable boards including the YMCA Board of Directors, Better Business Bureau Advisory Council, Tennessee Malt Beverage Association, Keep Tennessee Beautiful Advisory Council and the Tennessee Center for Performance Excellence Board of Examiners.

Charles W. Hand also is involved in numerous philanthropic and developmental efforts in his home community of Clarksville as well as in greater Tennessee. He sits on the Board of Directors for the Clarksville Academy, Clarksville Area Chamber of Commerce and the Tennessee Malt Beverage Association, among others.

The company works with several Chicago sports’ teams, including the Cubs, Bulls, White Sox and Blackhawks. It also sponsors several music venues and minor league baseball teams.

“While we’re fortunate to be one of the largest beer distributors in the country, at the same time, we like to be local,” JR Hand says. “We’re very passionate about the individual cities we do business in. We truly try to be a member of every community where we have a presence. We have offices in every city and our senior management team and our employees are encouraged to be involved in charitable and civic events and to truly make sure ‘our hand’ is involved.”

As leader of the Hand Family Companies, JR Hand says he wants to build a sustainable business that will last for generations. “My goal is to remain family owned and family controlled, but all my children are under five years old, so what their future dreams are, your guess is as good as mine,” he says. “I would like to get our sales revenue to $1 billion and continue to reduce turnover so that our employees enjoy even happier day-to-day activities whether it’s through benefits, perks, wages, etc.

“To accomplish this, we have to continue to grow the top line,” he continues. “We will strive for that.”

As JR Hand reminisces about the company’s seven decades of longevity, he credits his father and grandfather for orchestrating a company culture with a steadfast foundation.

“We’ve come a long way since that old pickup but even with all the growth, Hand Family Companies remains dedicated to faithfully representing our breweries and providing unparalleled customer service — a vision that Raymond C. Hand set in motion seven decades ago,” JR Hand says.

“It always starts with the liquid and ends with the liquid,” he continues. “We look for customers that want to grow with us so we can grow together. At the end of the day, that’s how you’re going to be the most successful.”


HAND FAMILY COMPANIES
At a glance

Headquarters: Clarksville, Tenn.
Founding Year: 1949
Leadership: Charles W. Hand, chairman; JR Hand, president and chief executive officer; Jay Smith, chief financial officer; Mike Flynn, regional vice president (VP), Illinois; Rock Haines, regional VP, Tennessee and Kentucky; Barry Batson, VP of operations; Pat Goodwin, VP of human resources; and Chris Davis, chief of staff
Number of plants/facilities: 7
Locations and number of cases produced: Clarksville, Tenn., 2.6 million cases; Cookeville, Tenn., 1.4 million cases; Chattanooga, Tenn., 2.4 million cases; Hopkinsville, Ky., 1.3 million cases; Bloomington, Ill., 2.3 million cases; Arlington Heights, Ill., 6.7 million cases; and Chicago, 14 million cases.
Distribution area: 3 states (Tennessee, Kentucky, Illinois)
Total case volume: 40 million
Dollar sales: $650 million
Number of brand families: 250, including alcohol and non-alcohol brands
Employees: 1,100

 
 
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