Sean Rose, chief executive officer of Clare Rose, the exclusive distributor of Budweiser and Heineken (HEIA:NA) on Long Island in New York, worries a lot about the weather. “Like this, I don’t need,” he says, pointing out the window of his headquarters in East Yaphank. It’s a Tuesday afternoon in the middle of June. The sky is overcast. There’s been a lot of rain, discouraging Bud drinkers from venturing out to the local 7-Eleven (3382:JP) and loading up on 12-packs.
A loquacious 41-year-old with a deep tan, Rose is particularly climate-sensitive this time of year. The week of July 4 is his biggest “power week,” more lucrative than the weeks before Memorial Day (a close second) and all other holidays. The company, founded in 1936 by Clare Rose, Sean’s grandfather, has 5,000 customers throughout Nassau and Suffolk counties. Half are retailers such as Costco (COST) and 7-Eleven, the rest are bars and restaurants—and they all watch the skies with as much interest as Rose.
If the weather looks good for the Fourth of July, they’ll fill their shelves and coolers with beer. If not, they’re likely to trim their orders, and Rose can forget about recouping that income. “It’s very weather-driven,” he says. “You can’t get those sales back. No one is going to party on Tuesday afternoon because they didn’t do it on the Fourth of July.” Two of his top executives, each wearing golf shirts with the Clare Rose logo, nod in agreement, looking equally pained by the idea of aborted barbecues.
If the weather cooperates, Clare Rose will have a 400,000-case week. Employees have been working 12-hour shifts, wheeling beer into the company’s cavernous 109,747-square-foot warehouse with 35-foot-high ceilings in East Yaphank. All told, the company has 750,000 cases in that facility and a smaller warehouse in Melville.
Anheuser-Busch InBev (BUD), Budweiser’s owner, requires distributors to maintain warehouse temperatures at 62F in June, no small feat. When Clare Rose built its East Yaphank warehouse two years ago, it installed 6-foot-tall, 6-foot-wide, and 12-foot-long air conditioners. The distributor also keeps 8,000 kegs of beer refrigerated in a separate room at 36F.
Clare Rose needs the extra space to keep up with the increasingly fragmented beer market. Brewers don’t just peddle different brews; they peddle the same ones in an ever-expanding range of packaging variants. “We sell Budweiser 28 different ways: 10-ounce, 8-ounce, 7-ounce bottles, 12-packs, 18-packs, 30-packs, 6-packs, 3-pack 24-ounce cans,” Rose says. “I mean, that’s just one brand.” It drives him crazy, especially when it takes his 100 salespeople, many of whom make their rounds in 10-wheel trucks, as long as three hours to restock a supermarket.
Rose says the strategy isn’t lifting Budweiser sales. He says he’s still selling more Bud than Bud Light, but he’s preparing for the day Bud loses its crown. He’s hosting Bud Light tastings in local bars—strangely enough, there still are people in the U.S. who have yet to sample it. “And even if they have,” Rose says, “that doesn’t mean they can’t try it again.” He’s also pushing spinoffs such as Bud Light Lime-A-Rita and Straw-Ber-Rita. “Straw-Ber-Rita is hot right now,” says Rose. “Pour it over ice with salt, and you would never know it was malt-based.”
Higher-margin craft beers account for 4 percent of Rose’s sales; he thinks he can get that share as high as 8 percent. It all comes down to picking the right ones. Rose is partial to local breweries such as Blue Point and Long Ireland. He says the same selectivity applies to nonalcoholic beverages: “You know, people say to me, ‘Oh, do you want Nantucket Nectar?’ I’m like, ‘Who from Long Island goes to Nantucket unless they have a house in East Hampton and a helicopter?’ ”