Breakthru Beverage Uses E-commerce to Expand Distribution

At a Glance

• COVID-19 leads to e-commerce acceleration at Breakthru Beverage, sets company on the path for technological innovation.
• Achieving a single source of truth in its ERP data reveals new market opportunities.
• A leading North American distributor implements vision for a single integrated system of technologies.
• Breakthru Beverage concludes: The key to a successful product or team is people, vision, and trust.

By John Yuva, Editor, SAPinsider

Since the onset of the coronavirus pandemic, the consumer packaged goods (CPG) industry continues to adapt to changing market conditions and consumer preferences. The pandemic forced CPG companies to accelerate the digitization of their supply chains as e-commerce adoption and omnichannel distribution suddenly became the new normal. More than a year later, these external pressures remain a driving force for CPG companies to align with their supply and customer partners.

For Breakthru Beverage Group, a leading North American distributor of the world’s top luxury and premium wine, spirits, and beer brands, a transformation initiative was already underway prior to the pandemic, which enabled the company to pivot more successfully as demand and distribution patterns shifted. Joe Bruhin, Executive Vice President and Chief Information Officer for Breakthru Beverage, says that two critical factors associated with e-commerce helped expedite the company’s transformation timeline:

• COVID-19 prompted us to accelerate our investment and pace of delivery to ensure customers had a solution to purchase our products, manage their business, and interact with Breakthru in a safe and secure manner for them and our sales teams.
• Our sales teams are benefitting from our e-commerce solution, affording them the opportunity to glean insights into what our customers are interested in (based on shopping behaviors) and enabling them to reduce time spent on administrative tasks and focus more on consultative selling.

Bruhin says the company’s core mission is to be the best and most assessable distributor in the industry to work with. The company operates 36 facilities (including more than 15 distribution centers) throughout all of Canada and 14 U.S. states. Breakthru Beverage’s response to the impacts of the pandemic is helping to make its mission a reality.

Accelerated E-commerce Integration

As a wholesaler, Breakthru Beverage is responsible for ensuring product is available for customers where and when they need it. Thus, Bruhin says the company greatly accelerated the design, development, and implementation of its e-commerce solution. Originally slated as a three-year plan, the company’s e-commerce initiative was completed in one year.

“We’re able to move fast and adapt to changing demand patterns because of our end-to-end SAP Commerce Cloud and SAP Customer Data Cloud solutions, as well as SAP ERP Central Component (ECC) for our ERP, which has helped us tremendously in meeting customer demand,” Bruhin says. “Our New Horizons project involved the harmonization of the company’s internal data into a single source of truth within SAP HANA. All the noise about the data not being accurate or inconsistent has been eliminated as a result of that initiative.”

Bruhin says he’d like to see all of the company’s customers (bars, retail, and restaurant businesses) on its e-commerce platform by the end of 2022, which means having every market on e-commerce within a two-year period. Regardless of the technologies or processes in place, Bruhin says Breakthru Beverage can no longer be thinking just about driving its own business outcomes, but must also consider its suppliers, customers, and even consumers in everything it does.

“Our ability to take this core data and establish one source of truth enabled two critical things to occur,” Bruhin says. “First, we now have insights into our own data and inventory to prevent mistakes like not purchasing enough stock. Second, we can now go back to our suppliers and help them understand the demand profile from our perspective so that together we can make better informed decisions about shifting demand.”

A New Breed of Data Analyst

Becoming a fully data integrated business with SAP at the core to drive insights, actions, and other capabilities is a true competitive advantage for Breakthru Beverage. What’s required to achieve that is taking the harmonized, internal data and combining it with third-party data into a single source within a hybrid cloud environment running SAP, Snowflake, and Microsoft-centric Software as a Service, Infrastructure as a Service, and Platform as a Service architectures.

Bruhin explains that during the New Horizon project, it was critical to first have clean internal data. Trusted, accurate insights are unattainable without cleansing your data. This effort took Breakthru Beverage two years to identify, comb through, and cleanse all of its internal data to remove inaccuracies and inconsistencies that challenged its market insights in the past.

The second data requirement is integrating third-party data, which has already started and Bruhin says should be completed late in 2022 when the company’s full strategy, structure, and tools are fully implemented, and third-party data is integrated into their cloud-based data lake.

“It’s going to require constant maintenance because you must maintain that data since it’s coming from outside sources,” Bruhin says. “As the market dynamics of those sources (suppliers, customers, and consumers) change, you need to change with them. It’s a constant focus that must occur to really use the data to its full potential and value.”

Monitoring the data for strategic decision-making goes beyond today’s data analyst skill set, Bruhin says. Most data analysts understand how to examine historical data and create insights about what happened. However, he says what companies like Breakthru Beverage need are people who can predict what’s going to occur, using the analytics for greater business intelligence.
“That’s a big requirement that we have yet to figure out with the right degree of specificity. We need people who are not just data analysts but also quantitative thinkers and mathematicians who deeply understand the business. There’s a significant amount of work to be done in that area,” Bruhin says.

“The possibilities around data are exciting because of the constructs in place. The technology offerings are already present, but it means little if you don’t have the appropriate people with the right skill sets to extract the data, analyze the data, and then determine the right actions to take.”

A valuable partner for Breakthru is Protivity, says Bruhin. The company has enabled Breakthru’s change journey.
“You can implement the world’s best technology, but if you haven’t done your change journey it means little if your people can’t or don’t want to use it. And Protivity has been invaluable to us in that change journey initiative.”

Single Integrated System

Breakthru Beverage has made significant investments in its technologies to achieve the results its now experiencing. Bruhin says the primary focus is on SAP Commerce Cloud and SAP Customer Data Cloud solutions and the company’s e-commerce strategy. Understanding what customers are doing helps the company drive value to suppliers in return.

The company is also leveraging all three major hyperscalers — Google Cloud, Amazon Web Services, and Microsoft Azure — to determine their greatest impact on the business. Hyperscalers allow Breakthru Beverage to quickly spin up new infrastructure in the cloud without worrying about preplanning, allocating things like disk space, memory, and central processing unit (CPU), as there is a limitless pool for the company to utilize in the cloud, Bruhin says. The company continues to learn how cloud providers can contribute to its business objectives, case by case. “One important thing we need to be very aware of is managing and governing the cloud infrastructure to ensure we are using it most efficiently. We don’t want to find ourselves in a situation where we are spending more than we planned.

Moving forward, the company has deployed SAP E-commerce and is exploring SAP Marketing Cloud, while also eyeing an upcoming acceleration in the implementation of SAP S/4HANA. Bruhin says the company is also building application program interfaces (API) to ease and expedite current and future integrations.

“We have SAP across the board all coming together as a single integrated technology. And having analytic cloud capabilities for things like smart insights is going to change how we think about and run our business,” Bruhin says.
Bruhin says none of this would be possible without both end-to-end SAP across our entire footprint and high-quality, clean, and trusted data. These two things have enabled Breakthru Beverage to leverage its technologies to move with the pace of change.

Value and the Measurement of Success

Measures of success, such as clean code and stable operational environment, are two significant areas where Breakthru Beverage is thriving.

However, Bruhin says the next critical measure will be determining the value of implementing all the technology into the cloud and integrating third-party data. “What I’m going to be looking for as a metric is how quickly and easily will our cloud-based data lake and the analytical tools that surround it tell us things about our business that we couldn’t otherwise see,” he says. “We will be asking ourselves if we are we actually using this massive investment and capabilities in technology, data, platforms, and human capital to shape and drive our business in a different way. I believe we absolutely will.”

For example, Bruhin says in the company’s e-commerce business, the full suite of applications is providing visibility into products that consumers haven’t purchased in a long time or at any point in the past. Its sales representatives can use that data to understand what the company’s customers really want and upsell them on other offerings.

“To make a great product or to have a strong team, you need three things. You need to have a clearly articulated vision, strong and talented people, and you need to have trust. If you have those three things, then you can get just about anything accomplished,” Bruhin says.

Most importantly, you need to have a plan before you start, he says. And getting everyone aligned to that plan and vision is a lot of work but companies can get there.

“I am thrilled with the Breakthru Beverage team and am constantly surprised at the incredible capabilities of this business — our people are action-oriented thinkers and doers,” Bruhin says. “And we can’t overlook the criticality of partnerships either. Our partnership with SAP has enabled us to do all the things we’re accomplishing today and in the future.”

 

What Does This Mean for SAPinsiders

1. Get ahead of the future. Companies can’t wait until trends materialize to respond. By then, it’s likely too late. Invest in what you are seeing on the horizon today in order to leverage the conditions of tomorrow.

2. Invest in clean data. It can’t be stated enough that without cleansing your data, the accuracy of data analysis is compromised. In the case of Breakthru Beverage, it spent more time on cleansing its e-commerce data than on implementing the technology itself.

3. Work through your vision before implementation. Implementing multiple SAP solutions and integrating non-SAP applications into a cohesive system does not occur without serious investigation and planning. Breakthru Beverage understood the future state of the business and focused on the technologies required to reach it.

 

Company Snapshot

Breakthru Beverage Group

Headquarters: New York, New York, and Cicero, Illinois

Industry: Wholesale beverage

Employees: 7,000+

Revenue: $6 billion+ annual sales

Company details:

• Family-owned and operated company since 1922
• Newly formed in 2016 upon merger of Charmer Sunbelt and Wirtz Beverage
• Operates 36 facilities (including more than 15 distribution centers) throughout all of Canada and 14 U.S. states
• Delivers world-renowned brands to the doorsteps of North America’s retail, bar, and restaurant businesses

SAP solutions: SAP Commerce Cloud, SAP Customer Data Cloud, SAP E-commerce, SAP ECC, SAP HANA, SAP BusinessObjects Web Intelligence, SAP Information Steward, SAP Concur, SAP Hybris, and Vistex solutions