Thursday, February 09, 2012

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Business on Tap

coverIt’s been 14 years since Dan Henry decided to trade in the corporate life for entrepreneurship. The small beer distributorship he purchased has grown to a company with over 100 employees. It is housed in a 110,000-square-feet facility and loads about 10,000 cases of beer a day. Dan Henry Distributing trucks have become a familiar sight in Greater Lansing.
Henry grew up in the Milwaukee area and went to college there at Marquette University. After graduation, he was hired by a CPA firm (now called Deloitte & Touche) where he spent four years. He then went to work for Miller Brewing Company, specializing in troubled markets. He traveled the country visiting distributorships that were struggling, and either helped them improve or bought them on behalf of Miller Brewing Company, making them branches until they improved to the point that they were ready to be sold again.

It was a job he enjoyed, but the extensive traveling made it difficult to have a home life. “At some point I decided I wanted to do it for myself,” said Henry, “and part of the reason for Lansing, Michigan, is I got married to a girl from Detroit. I had a job that was 100 percent on the road, and I needed to change that in order to be married. This became available, so I bought it.”

That was in 1990, and the distributorship that he bought was called DeRose Distributing, located on Aurelius Road in Lansing. DeRose had been in business since Prohibition and carried Miller, Labatt and Heineken® brands. Since that initial investment, Dan Henry Distributing has doubled in size through organic growth and acquisitions. Miller Brewing Company still represents the bulk of their volume, followed by Labatt; and Henry has added many other brands, most significantly Molson, Corona, Coors®, Pabst Brewing Company brands, Samuel Adams®, and several imports.

“Growing at a terrific rate are all the specialty and import brands,” said Henry, “largely because people today are trying different beers and experiencing different beers, stouts and wheat beers…things that were in limited distribution, but today are mainline brands.”

The system of beer distribution is unique in the retail world. At the repeal of Prohibition, it was decided that there needed to be a separation between manufacturer and retail so the manufacturer could not exert influence over retailers. Territories are set by law, which means that anyone who sells the brands that Dan Henry distributes in Clinton, Eaton and Ingham and half of Livingston counties, has to buy it from Dan Henry.

“So all the bars, restaurants and stores have to buy alcohol products through the designated distributor. It’s a little different than common products that you get in a store because they have to go through this tier of distribution,” said Henry.

Dan Henry Distributing is unique among beer distributors because of the diverse portfolio of brands. “We also provide the best service in the market,” said Henry. “We have a team of people who stock shelves, we build displays, we run bar promotions that feature are products, and we spend a lot on advertising. We are very community minded as well. We support a number of charities and Michigan State University sports.”

Each year Henry sponsors a fundraiser benefiting Sparrow Hospital’s pediatric emergency room. They also support United Cerebral Palsy and sponsor the Lansing Lugnuts and Frontier Days in Charlotte.

Henry distributes many brands of beer as an answer to customer demand. He explained that today’s consumer drinks a variety of products. His goal is to meet those consumer demands and taste preferences.

With the portfolio of products complete, Henry is looking to grow by expanding his territory, “Still based in Lansing, but we’d add geographic territory. And that’s happening in our industry. Michigan hasn’t been leading it in consolidation, but throughout the country there’s a lot of consolidation that’s gone on, and it’s going to happen here in Michigan.”

How does one add territory?

“You have to buy it,” said Henry. “There are no unclaimed territories. You have to buy an existing wholesaler.”

Henry keeps a close eye on trends in his industry. He explained that, while people tend to have a favorite brand that they go back to, they are more willing to experiment with different products than in the past. People are drinking higher end beers and wines, which they tend to consume on premise, then buy their typical brands at the store.

“I think people are drinking less on premise, and that’s largely because of our driving laws. People are doing the house party-type consumption.”dhenry

The holiday season has less of an impact on Dan Henry Distributing than in years past. People don’t have Christmas parties like they once did. “It’s driven both by the economy and the potential liability. We’re a very litigious society, and people try to limit their exposure, so Christmas parties are out. Unfortunately the irresponsibility of a few kind of drive the rules and it’s on the decline. It’s certainly an important time of year for us, but beer sales are always higher in the summer,” said Henry.

Maintaining quality benefits for his 106 employees is one of Dan Henry’s biggest challenges. Both health insurance and workers’ compensation insurance are escalating costs. Another challenge is keeping the employees safe and healthy in an environment where repetitive handling of heavy objects is part of the culture. They constantly work with drivers, training them to load and unload trucks in a safe manner. Each driver delivers over 1,000 cases of beer a day. The warehouse loads 10,000 cases a day. Kegs weight 165 pounds.

“We issue nonskid boots. We have ongoing training of employees to make sure they’re handling beer correctly. We instruct people on the correct way to lift, a correct way to load and unload a truck, and we enforce safety requirements. If people get in a hurry, they get hurt,” said Henry.

Also with an eye toward safety, the company regularly hosts Tips Training. It is a program available to retail employees who will be serving alcohol to the public, and teaches the ways in which to do so responsibly.

Dan Henry has been rewarded with a growing company over the last 14 years. He enjoys being his own boss and the many challenges his job brings. “I enjoy the flexibility of topics. We’re a sales organization, we’re a trucking company, we’re a warehousing operation, and to a degree we’re a marketing company. As owner, you touch all those topics, and so it makes your day go fast. It’s rewarding when the company grows; it’s very rewarding. And fortunately we’ve been successful.”

Author: Amy Sands
Photography: Roger Boettcher

Dan Henry, president
5500 Aurelius Road
Lansing, MI 48911
(517) 393-7700

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