Brien Fox moved into the chairmanship at the Lansing-based Michigan Beer & Wine Wholesalers Association as the craft brewing industry in Michigan continues to gain in popularity. The CEO of the family-owned Henry A. Fox Sales Co. in Kentwood was elected to a two-year term as chairman on July 31 during the annual meeting of the association, which represents nearly 50 beer and wine distributors across Michigan that employ about 6,000 people. He spoke with MiBiz about his role and the state’s beer and wine industry.
What’s at the top of the agenda for the association today?
We have a really interesting regulated alcoholic beverage system in Michigan and in the United States, which creates a real accountable, safe, transparent system. If you think about when you purchase a glass of beer or a bottle of wine, there’s a plain line of sight all the way back to the manufacturer. One of the big issues with alcohol right now is just safety. The Dominican Republic, Costa Rica, Mexico — those countries that aren’t far away from us and because of having a lack of a regulatory environment like ours, they’ve had a lot of safety issues (with alcohol). Our group is really focused on making sure our system remains intact to prevent those types of things from happening and that the safeguards for the public are there. We’re also focused on making sure that there is a clear licensed system so that everyone in the system is accountable.
What’s another high priority for the wholesalers?
Shipping alcohol in from a website that’s not licensed in the state of Michigan is also on our priority list to make sure those people are held accountable and make sure they’re following the laws of Michigan.
How has the alcoholic beverage industry evolved with changing consumer buying habits?
Michigan is one of the first states in the nation that has licensed third-party delivery services. Think about Shipt at Meijer, and there are other ones. There are, I think, seven licensed delivery services in the state. So we’re forward-looking. We understand the consumer wants to shop on their phone and do e-commerce, but there’s a way to do it where there’s still accountability. All of the third-party delivery companies are licensed by the state and have to follow the state laws, but that still allows the consumer to get what they want in a more timely manner in this day and age.
How have distributors adapted to the emergence of so many craft breweries in recent years?
Because we have a framework that allows for a level playing field at the retail level, and also at the brewer level, Michigan is kind of a poster child for success with craft beer. There’s no coincidence that is happening in Michigan because of the system that’s in place. We work very closely with the craft brewers. We have a lot of dialogue and we’ve worked to have a lot of positive results. Michigan has one of the top number of breweries in the country and that’s based in part from the wholesale distributors that are doing their part to build the brands.
Has that required you to do more for your customers?
As wholesalers, we’re here to execute the marketing plans of our suppliers, every one of us. Just in general across beer and wine, there’s a higher level of specialization, a higher level of local marketing, especially with the advent of the technology that we can do with printing now and with social media. The wholesalers are doing significantly more marketing to build brands at a grassroots level, not only with craft beer and the fine wine. If you look at the demographics, the younger consumers that are of legal age and older are looking for more unique experiences, and that’s the nature of consumer products as we go forward. What that means is more fragmented business and more selection.
Do you see craft brewers continuing to grow at their present pace?
I would say that the craft beer space is vibrant and healthy. It’s also maturing, and when you get to a more mature space, then the best operators and the best marketers and the best producers of quality product will rise to the top. I think that’s what we’re seeing right now.
We’re hearing more today about softening economic growth. How concerning is that for the industry?
From a business owner’s standpoint, there’s limited signs right now that we’re nearing a recession. The benefits of our industry and why our jobs are so sought-after and high-paying is we have a very stable and consistent growth industry, as opposed to so many other industries that can have wild growth and wild declines when there’s ups and downs in the economic cycle. We’re a little more resistant to that in the alcoholic beverage space. Some people will say that people drink more in a recession. That’s not true. That’s not accurate. Disposable income is a factor, but it is still resistant. The vast majority of our members have never laid anybody off, for instance. We’re a very consistent, stable industry.
So many industries are affected by the tight labor market. How has your industry felt the effects of that?
We’re pretty lucky in that we have really good, high-paying jobs. I can speak to our company. We have an average tenure of over 13 years. We have very low turnover. Even in this environment, especially at the entry level, when you’re trying to get people in the door, either part-time or at an entry-level delivery position, it’s hard because there are just not a lot of people available. It’s most acute at the entry level across all positions. Think of a merchandiser in a grocery store. That’s a part-time position, and we’re competing against a lot of other people at that price point.
Take us out five years to the future. What do you see as an issue the industry will be dealing with?
I don’t see consumers’ want (and) need for variety and selection diminishing, so I think you’re going to continue to see more variety than today. You’re going to see a consumer that wants things anytime, anywhere, any place and that’s going to continue to change the environment not just for our industry, but for society. The exciting thing about alcoholic beverages today and what I think you’re going to see in five years is this amazing trade up. We’re in this great environment now where the consumer is striving for better product, whether it’s better beer or better wine, and so you have this great interest from the consumer to trade up and spend a little more for a nicer product. Five years from now, we’re going to continue to see better products out there.