Charles MerinoffWSWA Chairman

AGENDA

• Living My Two Roles

– Chairman & CEO of The Charmer Sunbelt Group

– Chairman of WSWA

• Value of a Distributor

• How Our World is Evolving

• Looking Forward 5-10 Years

• Aligning with key suppliers

• Building brands faster, garnering market share

• Delivering exceptional customer service

• Developing associates• Externally

– Unique legislative challenges in each market

– Responsible consumption

– Opportunities & risks

• Drive collaboration across three tiers to deliver a healthy vibrant market• Strong consumer

selection• Broad range of

players: suppliers, wholesalers & customers

• Insuring legislative change involves input from all constituents

• Responsible consumption

Brands SuppliersSKUs

OutletsOutlets

ClubsClubs

GroceryGrocery RestauranRestaurantsts

BarsBars Package StoresPackage Stores

Wine ShopsWine Shops

StateGovernment

VALUE OF A DISTRIBUTOR

Producers

VALUE OF A DISTRIBUTOR

To the State• Precise Control Throughout Route to

Consumer Ensuring Quality• Tax Collection & Requisite Record

Keeping of Location/Quantity/Price• Advocates for Responsible

Consumption

HOW OUR WORLD IS EVOLVING:CONSOLIDATION

Source: Adams Liquor Handbook and Market Knowledge

Top 4 Suppliers

All Other Suppliers

WHAT’S CHANGING – Supplier Alignment• Traditionally, distributors heavily focused on

securing supplier relationships

Distributorscarrying the same

brands

Distributorscarrying the same

brands

Many CustomersMany Customers

Many Mid-Sized Suppliers

Many Mid-Sized Suppliers

Distributors carrying exclusive brands with

dedicated orgs

Distributors carrying exclusive brands with

dedicated orgs

Many CustomersMany Customers

Few Large SuppliersFew Large Suppliers

• Gain or loss of a supplier makes our distributor businesses profitable or unprofitable

HistoricallyHistorically TodayToday

HOW OUR WORLD IS EVOLVING:CONSOLIDATION

Top 5 Wholesalers

All Other Wholesalers

Next 5 Wholesalers

Source: Impact Ranking – estimated revenue

Wholesaler Market Share Evolution (2005-2011)

WHAT’S CHANGING – AlignmentTraditional Supplier Management Model

West SVP

Southwest SVP

Central Control

SVP7 Distributo

r Contacts

7 Distributo

r Contacts

FL SVP

West Control

SVP IL/IN SVP

TX/LA SVP

CA SVP

Northeast Control

SVP

Southeast Control

SVP

Northeast SVP

Central SVP

South Central

SVP

Mid-Atlantic

SVP

11

11

33

22

11

11

22

22

33

66

66

55

33

ILMAMNNDNERISD

ILMAMNNDNERISD

ARCTGAKSMONJNMNVTNWI

ARCTGAKSMONJNMNVTNWI

AZCODEMDDCNYSC

AZCODEMDDCNYSC

LAOKTX

LAOKTX

AKCAHIINFLKY

AKCAHIINFLKY

WHAT’S CHANGING – AlignmentNew Supplier Management Model

CharmerSunbeltBusiness

UnitDirector

ControlBusiness

UnitDirector

Wirtz,MartignettiJohnson &

Other BusinessUnit

Director

FranchiseBusiness

UnitDirector

SouthernW&S

BusinessUnit

Director

Glazer’sBusiness

UnitDirector

WHAT’S CHANGING – Customer Focus

• As supplier-distributor alignment deepens, distributors are highly focused on customer relationships– Brands (and hence both distributors and

suppliers) can only win with customer ambassadorship

– Distributors & suppliers understand value of a broad customer base – critical for product access

HOW DO WE SEE THE NEXT 5-10 YEARS

??