A top beverage alcohol distributor's next growth opportunity is a step further upstream in its customers' supply chains.
Southern Glazer's Wine and Spirits announced Nov. 8 that it launched a subsidiary called Ankaa Global Logistics, a third-party logistics provider offering services such as temperature-controlled inventory storage, repacking and labeling for beverage alcohol suppliers.
Many of Southern Glazer's 1,700-plus suppliers are international companies that want to avoid managing their own U.S. warehouses but have extensive storage needs, Bobby Burg, SVP and chief supply chain officer at Southern Glazer's, said in an interview. They typically contract out those operations to 3PLs, which then aggregate suppliers' products before shipment to a wholesaler.
But most of the 3PLs used tend to handle and store goods from a variety of industries, so Southern Glazer's launched Ankaa as a provider focused on the wine and spirits industry, Burg told Supply Chain Dive. The 3PL offers temperature-controlled rooms for beverages and even storage for industry-prevalent raw materials like glass and cardboard.
"As we look to provide more value to the supply chain and to the suppliers that we represent, there's a logical connection between us running a 3PL for the suppliers, versus it being some unassociated third party who's not in the industry," Burg said.
Upside for suppliers and Southern Glazer's
Ankaa currently operates facilities in Fairfield, California, and Shepherdsville, Kentucky. Sites in Florida and Texas are slated to launch in 2024, according to its website, and Ankaa is looking to open a Northeast facility the following year.
This strategic placement allows Ankaa to reduce shipping timeframes, Burg said. Stored products at these facilities will eventually be picked, packed and shipped to their next destination, such as a Southern Glazer's distribution center.
"By having these all geographically spaced around the country, we can basically get to any one of our markets in two days or less," Burg said.
Burg noted that Ankaa's services are available for all wine and spirits suppliers, even those that aren't using Southern Glazer's. However, he added that using Ankaa does offer an upside for current customers, such as faster product integration into its systems.
Southern Glazer's will also leverage its subsidiary's facilities for storage and consolidating shipments.
"As we bring smaller quantities of product from various countries around the world, we consolidate them together with other suppliers and ship them to the final destination," Burg said.
A close eye on capacity
Sufficient capacity is one potential obstacle Burg is closely watching for Ankaa. Some Southern Glazer's suppliers need enough space to store more than 1 million cases on an ongoing basis, he noted.
As many supplier-3PL deals are multi-year agreements, losing out on a prospective customer due to capacity constraints could have long-term implications.
"If we're not ready at the time somebody wants, then they go sign with somebody else for multiple years, and we have some time before we could get them back," Burg said.
For now, Ankaa's immediate priority is to get its facilities up and running to serve whatever demand comes its way. This will allow the subsidiary to show potential customers its capabilities and provide them real-world examples of successful service, Burg said. Then, the subsidiary could potentially expand its services beyond the U.S. in the next couple of years.
"We'll likely open up other facilities in other parts of the country, opening up distribution into Canada … and then possibly, eventually, shipping stuff to foreign countries from products that get manufactured in the United States like bourbons," Burg said.
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