What sets J.J. Taylor Distributing apart from other wholesalers is what president and general manager Jay Martin calls “the three P’s.”
“It’s our people, it’s our portfolio, and it’s our planning process,” he says, while conceding “I guess you could say some of that sounds cliché-ish.”
Perhaps, but it’s helping the Florida distributor move beer in a growing, albeit underdeveloped market (according to the Brewers Association, Florida ranked 46th in the nation in 2013 with .5 breweries per capita). Of the roughly 20 million cases J.J. Taylor will sell this year, 2 million will be craft brands, representative of year-over-year growth of about 25 percent in the category. Boston Beer, Cigar City, New Belgium, and Sierra Nevada are among the company’s 10 largest suppliers, which when combined represent 96 percent of the wholesaler’s overall volume.
Citing that commitment to craft, the BA, along with the National Beer Wholesalers Association, recently named J.J. Taylor the 2014 Craft Beer Distributor of the Year, an honor that has been bestowed annually for the last eight years at the Great American Beer Festival.
Brewbound caught up with Martin to discuss not only the “three P’s,” but a number of other topics ranging from tap rotation, the implementation of technology and the politics of beer.
This conversation has been condensed and edited.
Q: J.J. Taylor has been around for a long time (founded in 1958). How has the emergence of craft changed the way you do business?
A: It has changed us top to bottom. I can just throw some examples out and this comes from our owner, John Taylor, back in 2004. Are you familiar with the 250 club? The 250 club, legend has it — I think several wholesalers did this — every Monday morning, we’d get together and have our SKU rationalization meeting or whatever. If on that Monday morning we had 251, we had to go down the list and find which one we’d discontinue. God forbid you go over 250 SKUs.
Sometime in 2004, Mr. Taylor, John, walked in and said what are you doing? That’s when he set the record straight, that it’s not up to us to decide, it’s up to the consumer. I was challenged, we’d have to figure out, operationally, delivery, and sales wise, how to handle as many SKUs as the consumer wanted.
Today, at any given time, our number of active SKUs is around 1,700, about 1,100 packaged SKUs, 600 draft SKUs. In total, we have closer to 2,500 or 3,000 SKUs throughout the year if you take into account the limited releases and seasonal rotations.
Q: How has business planning changed with the addition of so many SKUs?
A: We started, with our top 10 suppliers about five years ago, what we call our trimester planning cycle, and that’s driven benefits for us and for our suppliers. We collaborate on planning that and then the next four months, we go out and get it done.
When you’ve got 10 suppliers that make up 96 percent of your volume, that’s a lot of balls to juggle. So you know, in the old thought process of having monthly planning meetings, you meet with 10 suppliers every month, that’s 120 meetings. One has to step back at some point and scratch your head and wonder, wow, we’re in meetings all the time, how do we get anything done? We developed the trimester planning and there’s two advantages: One is we cut down on the meetings. And I don’t want to say our organization is large and we have a lot of executives, but we have three locations [and seven executives]. It’s impossible for all seven of us to be in 120 meetings. Now we block out a week with supplier partners and say you’ve got all seven of us.
A: Yeah, I think so. I’m sure other people have told you this. You read it every day, about the “rotation nation.” It is a challenge. But we have also found that retailers that, you know, maybe don’t have as many handles — what’s not as many? What’s the right number? I don’t know. Are 100 handles too much? I don’t know, maybe. Are 10 handles not enough? Probably — but we have found a little less rotation benefits the consumer and benefits the retailer in actual volume.
You don’t have to rotate all your handles. I think that consumers, while they talk about wanting variety, and variety is very, very important, I think part of that is they want to know when they want a great lager, they can get a Sam Adams after maybe they tried a couple breweries they’d never heard of.
I think that over time things will settle in to where you’re going to have static handles and not be rotating everything.
Q: How do you foresee J.J. Taylor’s business might evolve next as the industry evolves alongside it?
A: It evolves every single day. We’re going to continue to go back to our vision and our mission of being the first choice for our employees, our customers, and our suppliers.
We’ll have to go back to what our three strengths are and that’s people, portfolio and planning. As long as we continue, which we will, to invest in our people, as long as we continue to build our portfolio, and that can mean adding great suppliers or parting ways with other suppliers that may not be happy with what were doing, we’ll need to be diligent there. We’ll continue to look at our planning process and I think with each passing trimester it gets better.
[Also, the use of] Technology. We’ve converted away from order import mechanisms, handhelds, and gone to iPads. We don’t see them as order input tools, we see them as selling tools where we can bring up presentations and price lists and be paperless. Bring up videos and commercials that suppliers furnish to us. Part of that planning and investing in your people is investing in technology, which is great when it works, but can be frustrating because it changes daily.
Q: There’s a pretty contentious climate in Florida with regards to the legalization of 64-ounce growlers. You’ve voiced support for reform in the past. What do you make of what’s going on at the moment?
A: On the surface it seems pretty simple. It can be. Going back to, you know, Florida beverage law, everything up to and including 32 ounces is legal and then above 128 ounces, that’s to accommodate basically for draft. Why nothing between 32 and 128? I don’t know. Could it be at some point the state felt having a 40-ounce was not in the best interest of the public? I don’t know what the reason is, but maybe that was it.
Growlers are important, they’re something that consumers want, and it’s important to craft brewers in their tasting rooms because that’s their source of marketing themselves and their brands.
I think it’s certainly unfortunate that it came across as contentious. I don’t think that was good for the state of Florida, for craft brewers, or for distributors. Hopefully we can get something done this year that satisfies everybody.
As you stated up front, we support a 64-ounce growler because at the end of the day, the consumer can purchase two 32s or they could purchase a 128-ounce.