A.B. Beverage Takes on Craft Brew Business with Warehouse Makeover

THE SITUATION:
During the past decade, the craft beer invasion has sent giant ripples throughout an industry that was basically unfettered for more than a century. While consumers enjoy the wide variety of choices for their beer-drinking pleasure, the beer distributors are clamoring to find space in their warehouses to store all of the new brews which add to inventories on an almost weekly or monthly basis.

The largest and most successful beer distributors in the Southeast, A.B. Beverage Co. in Evans, Ga is a third-generation family-owned business that distributes beer to more than 1,000 businesses. Its 24 hour, 50,000-square-foot controlled environment warehouse (CEW) and its three, 3,000-square-foot draft coolers are stocked with more than 225,000 cases of beer at any one time. The company distributes more than 2.5 million cases annually, mostly Anheuser-Busch products.
THE CHALLENGE:
About eight years ago, the company noticed a big change in the industry – the rapid influx of microbrews. In fact, The Brewers Association predicts that craft beer will capture 20 percent of the U.S. $105 billion beer market by 2020.

According to Terry Wicklum, A.B. Beverage warehouse manager, to best sustain the company’s history of success and profitability and not be left behind in this trend, it decided to add craft beer to its mix. After a few years, and as the new brands began stacking up on warehouse pallets, storage space became a critical concern -- so much so that it affected the company’s willingness to absorb new microbrewer brands into its already large inventory.

“Then the question was: do we add more space, or do we do more with what we had?” Wicklum said. “After working with PDC, Inc., a consulting company specializing in warehouse design and optimization, we decided to follow its recommendation to use Twinlode Automation, a leading material handling company known mostly for its expertise in beverage storage solutions.”

“Based on Twinlode Automation’s study of our entire operation, including sales, equipment and the warehouse facility itself, we decided to reconfigure our existing space,” he said.
THE SOLUTION:
Wicklum said the Twinlode Automation’s team recommended its Selective Rack and Push Back Rack systems with rollers to maximize space utilization and increase pallet access time.

“We installed the single-deep Selective Racks for one side of the aisle,” he said. “Each is designed for versatility and strength with structural steel, and have adjustable beam heights to accommodate various load sizes. On the other side of the aisle, we put up three-deep Push Back Racks which now allow us to load pallets and pick cases from the same side for last in/first out (LIFO) inventory retrieval. In addition, the Push Back Racks increase pallet storage density by up to 35 percent, and stabilize the loads for improved efficiency and safety.”

He added that “although we lost about 20 percent of our aisle space, we actually gained several smaller, more functional spaces. For our business process, if there is a rack space that is designed to hold 10 pallets, but only three are on the shelf at a time, then we are operating at only 30 percent efficiency.

“We used to have long rows that would hold 40 pallets and it was like driving our forklifts down a tunnel, only to have them go in and out several times to retrieve the pallets. Now, all of our fast-moving beer brands are in smaller rows for great efficiency and speed to the docking doors.”
THE CONCLUSION:
As a result of its decision to work with existing warehouse space, the company was not only able to save the costs of construction, it saved the jobs of six employees and allowed investment in crucial inventory management technology. And, according to Wicklum, “whenever a new brewer comes to the state of Georgia, we can welcome it with confidence. In fact, we are now gaining at least one new brand each month.”

As for the company’s assessment of Twinlode Automation, Wicklum said: “We were amazed at how organized Twinlode Automation was. During installation and after, we were able to get through the entire transition without ever stopping daily operations.”
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