Crown Imports CEO Bill Hackett looks at a glass of beer not just as an industry executive but also as a guy who poured a lot of pints to make ends meet in college.
In an interview at his company's recently completed lobby and office bar in the Loop, the jocular executive pontificated about the importance of foam. More head on a beer means more carbon dioxide has been released, and the beer tastes better, Hackett explained.
Beyond knowledge of just how a draft beer should look in its glass, "being behind the bar gives you the insights into (the) consumer, and you develop social skills," Hackett said. "And that's really how I got to know people in the business."
Today, Hackett's job is a little more complicated, as he leads a $2.4 billion company with more than 350 employees and responsibility for some of the nation's top import beers. His company's recent history includes navigating a brutal recession and a jarring merger.
Chicago-based Crown Imports, which ranks third in U.S. beer sales volume, is a joint venture between Victor, N.Y.-based Constellation Brands and Mexico's Grupo Modelo, which makes Corona Extra, Modelo Especial, Pacifico, and Negra Modelo. Crown imports those beers as well as Germany's St. Pauli Girl and China's Tsingtao.
Imports in the $23.9 billion U.S. beer industry, as measured by Euromonitor, were particularly hard hit in the depths of the recession. Following a bumpy start to the joint venture in early 2007, Crown's Corona, the nation's top import, saw sales declines ahead of its peers. But Crown's sales rebounded in fiscal 2011, with it revenue rising 6 percent .
As a whole, the beer industry is expected to post a third consecutive year of declining sales in the U.S. for the first time in more than 50 years. . Shipments from beer manufacturers to wholesalers, a standard industry measure, are expected to fall by as much as 2 percent in 2011, according to Beer Marketer's Insights.
"As unemployment increases, beer volume decreases," Hackett said. "That's why the beer industry has suffered over the last four years."
Corona in the U.S.
Hackett's start at what is now Crown Imports came in 1984, when Mike Mazzoni, a beer industry friend, contacted him with a job opportunity. Mazzoni had been hired to start a beer division at Barton, a small, Chicago-based spirits company rolling the dice on a little-known Mexican brew called Corona.
Imports were a small fraction of the American beer business. Hackett wasn't interested.
"I said, 'Mike, are you out of your mind? Nobody knows this brand,'" Hackett said. But Mazzoni pushed back.
"He said, 'You're young, we've both got some pretty good experience, but this is a chance to see how smart we really are and to build a business a different way,' with different principles that were really different from how the beer business was established at that time," Hackett said, referring to beer in the 1980s as "an old boys' club."
In those days, he said, executives took wholesalers out to remind them to do their jobs and got angry if they didn't hit sales goals. Hackett and his team worked closely with the wholesalers , teaching them how to establish relationships with retailers and get the right placement in stores.
"We brought some process and discipline to the business, and a level of sophistication that we truly took on the spirit of being partners with wholesalers," he said.
Rocky Wirtz, president of Wirtz Beverage Group, chairman of the Chicago Blackhawks and a friend, said this approach helped Hackett succeed.
"He'll makes sales calls, work with salesmen — he understands everything" about the industry, Wirtz said. "It's the range of his business acumen that makes him successful. He understands the business."
Getting started, Hackett had a lot to learn about Corona, which was just beginning to attract attention in the western U.S. and major cities. In Austin, Texas, a retailer explained that Corona was popular with the ladies. Fraternities bought it for mixers because the girls liked it, but they'd end up trying it and liking it when they ran out of their own beer. He also traveled to San Diego, where Corona had become popular because surfers were bringing it home from Mexico.
"It was really kind of a cult brand," with little marketing support, Hackett said. He recalled wholesalers bemoaning the lack of promotional merchandise like mirrors or neon signs to give to bars that sold Corona. He suggested using the bottle itself as a display item on the bar. At the time, he said, a long-neck bottle was uncommon, as was the painted, rather than paper, label.
A bumpy merger
Hackett stuck with Barton after his friend, Mazzoni, left in 1991. After nearly a decade on the job, Hackett was named president of Barton Beer in 1993. Constellation Brands, a wine & spirits company, acquired Barton the same year.
Barton Beer was Grupo Modelo's importer for the western United States, while another company handled the business on the East Coast.
But having two importers grew cumbersome because it meant different pricing and promotions. It was particularly confusing for national restaurant chains, Hackett said.
Seeking to work with just one U.S. importer, Grupo Modelo selected Barton and created a joint venture with parent company Constellation in early 2007.
But Crown Imports was in for a wild ride as it worked to integrate its U.S. business.
Corona's East Coast importer sued to block the merger. It lost, but the rift left the Crown team with little insight into the workings of its business, including how prices were set in its region. The new company also faced an uphill battle to reach peaceful relations with East Coast distributors, Hackett said.
"We had no visibility of the business or into the wholesalers, we didn't know the numbers, we didn't know pricing. We didn't know anything," Hackett said. "So Jan. 1, 2007, we had to run the business, and we were literally flying blind in half the country."
Now, Hackett said, he "could give a class on joint-venture management."
"The reason you have a joint venture is that the two parties couldn't agree to begin with, so how are things going to work out once you are doing business?" Hackett said. "We've had differing agendas, and I had no idea the amount of time and energy I'd have to spend managing up rather than managing the business."
Corona shipments to retailers are still well below 2007 levels, and some experts wonder if what's still the nation's best-selling import by far will ever regain that ground.
But Crown is pursuing a number of initiatives to take back market share, starting with the introduction of draft beer.
Draft accounts for 10 percent of beer sales in the U.S., and Crown had no presence in the sector until 2008, primarily because draft is just beginning to grow in Mexico. Crown started in draft with Negra Modelo and Modelo Especial in just two cities, expanding in 2009 and branching out further in 2010 into more cities and with additional beers, including Pacifico and Victoria.
The Corona brand will have to wait, Hackett said, because consumers associate the beer too closely with its iconic bottle. (Although a wedge of lime is integral to some Corona drinkers, the company tries not to overuse it in advertising, and they teach bartenders not to routinely stuff limes into Corona bottles because not everyone wants one, Hackett said.)
Crown will also begin pushing Modelo Especial, which is the third-best-selling import in the United States despite receiving very little marketing support. The brand is very popular with Mexicans in the U.S., and it's cheaper than Corona. Crown is looking for an advertising agency and plans to launch its first Modelo Especial campaign for the general consumer market next year.
The company has also introduced Americans to Victoria, Mexico's oldest and second-best-selling beer, and Crown's answer to the growth in craft beers because of its fuller flavor. But unlike some craft beers, Hackett said, its finish is light enough that customers should be able to drink a few pints. Introduced in Chicago last summer, Victoria is now the 20th-biggest import in the U.S., according to SymphonyIRI data supplied by Crown, despite a presence in just 13 states.
Crown has also had success importing beers like Corona Familiar, a 32-ounce version of Corona Extra. The package is beloved by Mexicans but was previously unavailable in the U.S. Launched in Chicago this year, Crown is expanding it to other markets next year.
As the second of 11 children growing up in Milwaukee, Hackett was probably destined to be social. He also learned how to change diapers and make dinner for a crowd. His father worked as a road construction engineer, and while he spent one summer working for his dad, he said, "I was not an engineer."
Hackett selected St. Norbert College, a Catholic school in De Pere, Wis., because it served as a summer training ground for the Green Bay Packers. There, he met Raynelle, his wife of 34 years.
Graduating with a finance degree, Hackett worked as an underwriter for six months.
"I realized, 'Wow, that's not in my blood,'" he said. "And I got back in the restaurant business." He took a job in a bar, and during the day he worked on his master's in business at the University of Wisconsin at Milwaukee.
As part of his bartending job, Hackett met executives from nearby beer companies Schlitz and Miller, who told him that his gift for blarney would translate well to the beer industry.
"I finally had a guy from Pabst Brewing Co. say, 'Bill, we've got a new group coming in. You'd fit this very well,'" Hackett said. "I said, 'You know, I'm fed up with grad school, and this retail business is killing me.'"
Hackett was given a car and an expense account and told to start traveling to visit accounts. A year later, Raynelle became a critical-care nurse.
"It was a nice offset," Hackett said, as her work often put his wins into harsh perspective. He might be excited about a new account, but his wife would "come home and tell me how she'd saved a life."
"And I'd say 'You know, honey, from now on we're not going to bring work home,'" he said with a laugh.
The couple, who recently relocated to Chicago's Streeterville neighborhood from Glen Ellyn, have three grown children: Ryan, Nora and Margaret. Ryan works as a sales consultant at Wirtz Beverage Group, and Nora is a field sales coordinator with Crown on the West Coast.
"Growing up, we went out to dinner all of the time, and I thought it was the coolest thing," Nora Hackett said. "Looking back on it, he was following up on accounts, showing them love, making sure he was constantly in touch."
On the way out, she said, he'd be talking to managers and waiters, thanking them for the business.
"My sister and brother and I hated it. We wanted to go get ice cream or something, but he always took the time," she said.
Margaret was born with a rare bone disease that required a series of life-saving surgeries throughout her teens, Nora said. She graduated near the top of her high school class, and her story has been documented by the Discovery Channel in a program called "Chicago's Lifeline" in 2004.
Celebrating his 60th birthday in July at Shaw's Blue Crab Lounge, Hackett was reminded by Raynelle that he had taken the job at Barton thinking it would last just a few years.
"I said to my wife, 'You don't want this 24 hours a day do you?'" he said, pointing to himself to imply that she might not want him around the house all the time.
"And she said, 'Ah, you're right, honey. Maybe you can do a little less of it, but no.'"
Title: CEO, Crown Imports LLC
Hobbies: Golf, sports, grilling. Hackett makes a point to get out and visit bars and restaurants that carry his beers but says he rarely drinks at home, unless he's grilling. Then, he's got to have a Corona in his hand. "It's part of the ritual," he said.
Cubs or White Sox? "Sox. I'm a competitor. The Sox take what they do seriously. The Cubs don't. The Cubs are out there and they fill the stands. They can fill the stands no matter what. But the competitors go to the South Side."
As a manager: "Energetic, empathetic, but also committed, and looking for that same commitment from our team. … I'm looking for people that reflect the same kind of energy and passion for the business and are willing to direct that commitment. I'm not a guy that has people punch in. You're here to do a job, I expect you to do the job, and I expect you to be here until the job's done."
Advice on a career in beer: "It's 24 hours a day, but it's very rewarding. You can readily define whether you win or lose, account by account. And for someone (who) wants a score card (for) how they do and what their contribution is, it's very easy to do. But it's a lot of hard work, absolute commitment and passion."Copyright © 2014, Los Angeles Times