Beer Still Big Business in State?s Party Capital

Hemmed in by Arkansas counties that don’t allow alcohol sales and states with looser liquor laws, Fayetteville’s three beer distributors have finite territories.

Combine that with rising health consciousness, tougher DWI enforcement and a saturated restaurant and club sector, and their market appears tighter than a shaken can of suds. But Premium Brands of Northwest Arkansas Inc., McBride Distributing Co. and Coors of Northwest Arkansas Inc. still combined for $30.3 million in 2000 gross sales. (See chart).

The reason, they say, is for every disadvantage in Northwest Arkansas there’s another benefit to being here.

“There’s probably not many beer distributors in the U.S. who wouldn’t trade places with us, and kick in a few million dollars to boot,” said Corky Chappell, sales manager of Premium Brands, the local Miller Brewing Co. distributor.

Chief among the benefits sits across Washington County’s northern boundary. Benton County is the wettest dry county in Arkansas. It’s one of five alcohol free or “dry” counties that surround “wet” Washington and Carroll counties.

Benton County’s 50 private clubs represent 26 percent of all of the private club permits in 43 dry counties statewide, according to filings with Arkansas Beverage Control in Little Rock.

Since distributors aren’t allowed to deliver in Benton County, private clubs must buy from specially licensed retailers across the county or state lines. Most of them buy from Springdale retailers serviced by Fayetteville’s wholesale trio.

So for the overhead of servicing one county, the distributors basically get the sales of two. That increases margins and allows them to give more customer service than is possible in other markets.

“It’s easier for us to sell to the liquor stores and let the private clubs in Benton County drive down to Springdale to get it,” Chappell said. “The only thing that would be better is if [the retailers] came down and got both theirs and Benton County’s straight from us.”

During the late 1970s and early 1980s, the University of Arkansas in Fayetteville routinely made “Playboy’s” annual list of top “party schools.” Times have changed, and Chancellor John White’s commitment to a safer campus has quieted things down.

The distributors say in recent years they’ve seen a dip in on-premises sales for restaurants and clubs. They say anti-DWI advertising has promped more people to hold parties at home. New bars and eateries have also diluted sales for individual venues.

“There are so many more on-premises accounts than there used to be,” said Lloyd Porter, sales manager for McBride — the local Anheuser-Busch affiliate.

“But we’ve just had two of our best years ever. I attribute it to the population growth and economy here, and because from [local owner] Bob McBride on down we stress the importance of teamwork. With 300 accounts, we have to.”

Premium Brands has about 250 clients, but it doesn’t serve Baxter County — the nearest wet county in north central Arkansas —like McBride and Coors of Northwest Arkansas do. Other factors driving competition include cheaper taxes in wet neighbors Missouri and Oklahoma, which gives them smaller markups, and vying to win prime retail display spots.

Chappell once used 2,000 cases of Lite Beer to build a store display in the shape of a golf hole, and his sculptures have even included a race car. Chris Walters, general manager of Coors of Western Arkansas, said for a smaller distributor creativity is only one requirement. Walters said his firm makes service its top priority.

Porter said McBride focuses on teamwork. Gary Randolph, president and general manager of Premium Brands, said his company has gained its own advantage.

Premium Brands handles most of the area’s popular import beers, which have higher margins. Brewski’s Restaurant and Draft Emporium on Fayetteville’s Dickson Street, which carries more than 200 beers including 71 on tap, is one of Randolph’s biggest customers.

“We’re building revenue because import sales are going crazy,” Randolph said. “Our imports are popular in the college market here, and everyone wants to try new beers.”