The Bernick Companies

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The Bernick Companies

P.O. Box 7008
St. Cloud, Minnesota 56302
U.S.A.
Telephone: (320) 252-6441
Fax: (320) 656-2121
Web site: http://www.bernicks.com

Private Company
Incorporated: 1916 as Granite City Bottling Works
Employees: 550
Sales: $81.3 million (2004)
NAIC: 312110 Soft Drink Manufacturing; 424810 Beer and Ale Wholesalers; 424810 Vending Machine Operators

The Bernick Companies with its three divisions, Charles A. Bernick Inc., Bernick's Pepsi-Cola Bottling, and Bernick's Full-Line Vending, is one of the largest privately owned beverage bottlers and distributors in the Midwest. With over 40 acquired businesses in its recent history the company services over 10,000 regional accounts that add up to over one million customers throughout its geographic region.

1916–29: The Beginnings of Soda Pop Bottling in St. Cloud

Charles A. and Elizabeth Bernick could be considered pioneers when they bought out a small bottling company in St. Cloud, Minnesota, in 1916. The young married couple launched into a business that was relatively new to central Minnesota. Soda pop was considered a fancy treat, not your standard Minnesota fare. Although owning a soda pop company was exciting, it was not the first adventure for the young married couple.

Charles Bernick left home at 16 with some friends to fulfill his dream of becoming a cowboy out in Colorado. From Colorado he ventured to Teddy Roosevelt's ranchland in Medora, North Dakota, where he continued to pursue his love of horses and his interest in herding cattle.

It was not long before his cowboy lifestyle proved too solitary and decidedly male. Bernick indulged other interests when he met and married Elizabeth Kraemer in 1891. They moved to the Iron Range of northern Minnesota, settling first in Tower and then in Biwabic, where they opened a general store. When a fire destroyed the store in 1892 the Bernicks moved back to Stearns County in central Minnesota, and settled in Cold Spring. There, Charles opened a livery stable.

In 1916 the couple moved to St. Cloud and bought a 720-square-foot concrete block building and its contents of bottling equipment. Ironically, the building stood at the very spot where Elizabeth's father had built a brewery years before and which a fire destroyed in 1864. Unbeknownst to them, the couple's venture would become their lives' work and continue to remain family owned and operated for at least five generations.

For the first few years the company continued operation under the name Granite City Bottling Works. Its inventory included a pop filling machine, a crown cork and seal machine, a bottle soaker, a carbonator made by the Niagra Company, a pot-bellied wood stove for heat, a horse named Queen, a wagon, a sleigh, and less than 200 cases of beverage bottles and five ceramic syrup crocks.

Charles Bernick proved to be a good businessman. He was known to be personable, hard working, and adept at numbers; under his leadership the company steadily grew.

Despite his love for horses, when the horse and wagon would not get somewhere quickly enough he relied on an old motorcycle. With the advent of the automobile it was not long before Charles realized that a truck would make much shorter work of his 30-mile delivery route. He sold Queen and the wagon and bought a Model T delivery truck with side curtains. When the weather was too snowy to make his way with the truck Bernick would rent a horse and sleigh to deliver his goods.

Early fashionable soda pop flavors were ginger ale, grape, blackberry, and orange. Bottled soda pop with such names as Cherry Blossom, NuGrape, Eskimo Pop, and Green River were recognizable brands around Stearns County. In the 1920s Coca-Cola was a popular new choice.

Producing a large volume of carbonated beverages was a labor intensive and messy process in the early years. The procedure involved mixing syrup that came in 55- and 25-gallon color-coded wooden barrels, filling the bottles one at a time largely by hand, using a primitive machine the workers nicknamed "The One-Armed Bandit." Bottles were delivered and picked up again when their contents were emptied. They were then washed and reused, leaving the floor in a constant state of disorder and dampness.

Success was slow but steady and the company added inventory to meet the needs of its growing customer base. Choices in the 1920s and 1930s included Hires Root Beer, Bernick's Chocolate, Wineberry, Howdy Orange, and "near beers" named Schmidts City Club, Malta, Kato Beer, Rock Springs, and Pale Dry Ginger Ale.

1930s–50s: The Repeal of Prohibition and a Nation Ready for Beer

The company gained a foothold in the newly reopened beer market with the 21st constitutional amendment. The prohibition of the sale and distribution of alcohol was repealed and the bottling works was poised to capitalize on the new freedom. Charles Bernick approached the Jacob Schmidt Brewing Company with an offer to distribute the newly legal beer. He was the first local salesperson to reap a profit from the long awaited return to legalized alcohol.

On May 25, 1934 tragedy struck the Bernick household when Charles Bernick drowned while fishing up north, leaving his son Francis J. Bernick to take his place as head of the company in 1935. Francis Bernick was named manager and continued to establish Bernick Companies' reputation for community public service. Throughout the decades Francis Bernick received numerous awards and citations for his involvement in charitable activities around St. Cloud and its neighboring communities. The company established itself as a supporter of many family-centered activities at local festivals throughout its market.

The 1940s were a time of corporate expansion both in the types of goods the company provided and in the equipment and production facilities the company built. Bernick Companies added Dr. Pepper and Orange Crush franchises. The company began its automated production by purchasing new machinery. Although the 1940s brought the company new growth opportunities, these were tempered by raw material shortages brought on by World War II. Sugar for flavoring and metal for bottle caps were particularly hard to procure, and kept industrial growth in check. Still the company in 1941 bottled over 100,000 cases of soft drinks, employed 22 men, operated 14 trucks, served 1,300 accounts in a 60-mile radius of St. Cloud, and grossed $300,000 annually.

Growth continued when Bernick Companies bought area franchises to distribute the cherry cola flavored Dr. Pepper and the orange soda pop labeled as Orange Crush, two very popular beverages in the retail market. The company sold beer under common midwestern labels including Schmidt's City Club, Peerless, and Budweiser. In 1940 12,000 barrels of beer were sold through the company.

The 1950s were a time of unparalleled growth and wealth. The baby boom following World War II brought a level of prosperity never before experienced in the United States. Times changed and people who were once satisfied drinking coffee, water, or milk, now could afford soda pop. Soda pop, once a special occasion drink, was now preferred as an everyday affordable luxury.

In 1952 the company took a gamble on a relatively unknown cola product by the name of Pepsi. At the time Coca-Cola had become an international phenomenon. Pepsi was giving away its franchise in St. Cloud. A local company that also distributed beer had decided to discontinue its soft drink products. Bernick Companies accepted the offer, since it was free; however, there was significant risk involved: in the first years of its operation Pepsi twice went bankrupt.

Additionally, when Bernick Companies became a Pepsi-Cola bottler and distributor, the company had to drop Pepsi's competitor, Dr. Pepper, from its product offerings. It was no doubt a dicey move, but one that eventually paid off in a big way for the company. By 1953 Bernick Companies had sold 28,965 cases of Pepsi, a number that would grow substantially throughout the decades. Pepsi continued to gain recognition and became the number two most popular soft drink of all time. Recognizing Pepsi's potential market, Bernick Companies bought three additional Pepsi franchises in Minnesota and Wisconsin.

In the 1960s Pepsi introduced the soft drink Mountain Dew, which became a great seller for the Pepsi-Cola Company and its bottler/distributors. Mountain Dew grew in popularity, becoming one of the leading soft drinks in the U.S. market.

1970s–2005: Acquiring Companies and Adding Vending

In 1976 a 40,000-square-foot distribution center was constructed at the newly acquired Willmar site. By 1980 Bernick Companies had already outgrown its 1976 facility and added an additional 80,000-square-foot building. The company acquired the Pepsi franchise in Duluth, Minnesota, that same year and continued buying up both beverage and vending companies throughout the region.

Company Perspectives:

The Bernick Companies is a fourth-generation family-owned, business, providing full service beverage, vending and food service solutions to the Central Minnesota area since 1916. The Bernick Companies is a proud partner in improving the quality of life in the communities they serve, with a rich tradition of community support through financial and in-kind contributions and Team Member volunteerism.

Consolidation in the industry and streamlined operations to increase profit share led Bernick Companies to help develop Wis-Pak, a cooperative of 50 Pepsi bottlers that centralized production and distribution.

The company continued to add new products in the 1980s, including Moosehead, Pabst, Special Export, Grain Belt, and several other imported beers. More soft drink choices were also added, including A&W, Canada Dry, La Croix water, and Motts juice.

In 1988 Bernick Companies acquired St. Cloud Full-Line Vending and renamed the operation Bernick's Full-Line Vending. From 1970, when the company acquired the Willmar, Minnesota Pepsi franchise, a series of acquisitions had added to the size and customer base of the company. Significant purchases were made in the vending machine business. The company now sold sandwiches produced by a commissary and added snack food items to its already growing pop, juice, and water vending merchandise. The company expanded its territory into Wisconsin and as far north as the Canadian border.

In 1992 Bernick Companies purchased the 7 Up distributorship in St. Cloud and added several additional 7 Up businesses in Wisconsin and other areas of Minnesota. In 1996 the company acquired Rubald Beverage Company, a distributor of Pigs Eye, Olympia, Strohs, Old Milwaukee, Molson, Grain Belt, Premium, and Cold Spring beers.

By 1997 Bernick Companies employed over 400 people in its Waite Park, Minnesota facility and maintained over 200,000 square feet of corporate and warehouse buildings. The company had over 350 vehicles for its daily operations and was in the process of adding 40,000 square feet of additional space to its Willmar operation.

President and CEO Dick Bernick commented on the beverage industry's consolidation and change in a 1998 Marketplace Momentum article, stating," Oh, things are changing faster today than they ever have in the past. There are now more changes in a year than there used to be in ten years…. The consolidation of beer distributors has been quite dramatic across the country. We've lost a lot of bottlers to consolidation as well—there just aren't that many left. For example, we have some forty-five acquisitions. With new technologies, packaging and so many things happening, in order to stay in business, you've really got to be out front."

In 1999 Bernick Companies announced it would discontinue production at its downtown St. Cloud site. The company regretted having to close such an integral part of its historical operation but made the decision based on financial data. Bernick's relationship as a co-owner in Wis-Pak made bottling through the massive production facility more cost-effective than keeping the old facility with its associated costs for re-tooling, maintenance, and repair.

Despite industrywide consolidation in the beverage market, the local Dr. Pepper business in St. Cloud and Little Falls had maintained its independence until 2001. Bernick Companies purchased the Dr. Pepper Bottling Company in March 2001 for an undisclosed amount. Bernick's Pepsi-Cola Bottling Company added the right to distribute Dr. Pepper, Sobe beverages, and Big Red Energy Drink, throughout a ten-county region. In addition to distribution rights the company added to its warehouse space, vending machine supply, and delivery vehicles through the acquisition.

By the year 2000 Bernick Companies was servicing over 10,000 accounts and serving over one million customers. The company employed over 500 people and had a fleet of delivery and company vehicles numbering close to 400.

In April 2004, Bernick's Pepsi received one of the highest honors Pepsi-Cola North America bestowed upon its bottlers when the local distributorship was named the Donald M. Kendall Bottler of the Year for 2003. The Donald M. Kendall Award was named for the cofounder and chairman of Pepsi and was considered its most prestigious award for excellence.

It was clear that Bernick Companies had carved out a significant niche in the beverage market in Minnesota and Wisconsin by 2005. Through its acquisitions it had reconstructed itself as one of the largest beverage and vending companies in the region.

The company controlled both a large part of the soft drink market and significant brands for beer distribution. The company was still family owned and operated and appeared to be grooming leadership for the next generation of Bernicks to take their place in the family enterprise.

Principal Divisions

Bernick's Full-Line Vending; Charles A. Bernick Inc.; Bernick's Pepsi-Cola Bottling.

Principal Competitors

Viking Coca-Cola.

Key Dates:

1916:: Charles and Elizabeth Bernick buy Granite City Bottling Works.
1925:: Granite City Bottling adds NuGrape, Green River, Cherry Blossom, Eskimo Pop, and Hires Root Beer.
1930:: Company buys five new delivery trucks, expands its workforce, and adds several types of "near beer" to its product line.
1935:: Francis Bernick becomes head of Chas. A. Bernick, Inc.
1940:: Company buys Dr. Pepper and Orange Crush franchises.
1952:: Company buys distribution rights for a then relatively unknown brand of soda pop, Pepsi-Cola.
1970s:: New office and distribution center in Waite Park are completed.
1980s:: Bernick Companies adds sparkling water and new beer offerings; new full-line vending division is acquired.
2004:: Bernick Companies receives the Donald M. Kendall Bottler of the Year Award.