Glazer's Wholesale Drug Company, Inc.

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Glazer's Wholesale Drug Company, Inc.

14911 Quorum Drive, Suite 400
Dallas, Texas 75254
U.S.A.
Telephone: (972) 392-8200
Fax: (972) 702-8508
Web site: http://www.glazers.com

Private Company
Founded: 1933
Employees: 5,500
Sales: $2.8 billion (2005 est.)
NAIC: 424820 Wine and Distilled Alcoholic Beverage Merchant

Despite its name, leftover from the days of Prohibition, Glazer's Wholesale Drug Company, Inc., is one of the largest distributors of wine, malts, and spirits in the United States, and the largest wholesaler in the state of Texas. Other states in which Glazer's operates are Arkansas, Arizona, Kansas, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Ohio, and Oklahoma. Customers include grocery stores, package stores, membership clubs, convenience stores, restaurants, hotels, and specialty retailers. Based in Dallas, the company is still privately owned by the Glazer family and headed by a member of the third generation—with a fourth generation being groomed for eventual leadership.

GLAZER FAMILY'S MOVE TO TEXAS: 1909

The forebears of the Glazer family, Louis Glazer and his wife Bessie, were Russian Jews who emigrated to the United States around 1904. According to company documentation they moved to Dallas from Chicago in 1909, although Bessie's obituary published by the Dallas Morning News in 1944 indicates they lived in St. Louis for five years before relocating to Texas. The 1962 obituary of one of their sons, Max, however, referred to him as "a native of Chicago." In any event, the family came to Dallas and became involved in the beverage business, originally distributing flavored soda waters from horse-drawn wagons. They soon branched into bottling, running the Jumbo Bottling Company, which produced a variety of flavored soda water. The business was very much a family affair. Three of the couple's five children—Fritz, Max, and Nolan—joined the company and learned the bottling business. According to newspaper accounts, the family enterprise also included a beer bottling plant, established in the early 1910s. When the United States imposed Prohibition in 1919, banning the consumption of beer, wine, and spirits, this business came to a close.

Judging by newspaper articles from the period, the family apparently turned to a different business vehicle, the Real Juice company, owned by the three Glazer brothers. In September 1933, according to the company's official history, Max and Nolan formed Glazer's Wholesale Drug Company, looking to take advantage of the repeal of Prohibition that had taken place earlier in the year. For some 14 years Americans had been denied the legal right to drink alcoholic beverages, and only drug wholesalers and drugstores could carry consumable alcohol, hence the Glazer's Wholesale Drug Company name. Articles published in that month in the Dallas Morning News made no mention of the name, referring instead to the Schlitz Distributing Company of Dallas, which it said was headed by Max Glazer and had just begun to distribute "bottles and kegs of the beer that has served to make Milwaukee famous." Another article appearing two weeks later refers to Max and Nolan Glazer as "the owners of the Real Juice Company, 2201 Leonard, distributors for Schlitz beer." Until the 1940s Fritz Glazer also was mentioned as a principal of the company, and not until 1950 do Dallas Morning News articles refer to Glazer's Wholesale Drug Company.

Dallas residents, like people in the rest of the country, had found ways to satisfy their thirst for alcoholic beverages during the days of the "great experiment," but both quality and supply had been uncertain. The demand for legalized beer, wine, and spirits was strong, and Glazer's benefited, as the business enjoyed rapid success, steadily adding new brands and suppliers. For example, in the mid-1930s Glazer's began distributing Clark Bros. bourbon and rye whiskeys produced by Peoria, Illinois-based Arrow Distilleries. Glazer's also remained involved in the soda bottling business through a separate division that produced a line of flavored sodas called "Woosies." The brand was very popular in the area, known for the unusual six-pack it sold, consisting of a root beer, grape, strawberry, orange, lemonade, and cream soda. The division also acted as a distributor for other national brands of soda in Dallas and 20 other Texas counties when it acquired a Pepsi-Cola franchise in 1948, Pepsi-Cola Bottling of Dallas, a business that the family would continue to operate until the mid-1960s, operating out of the 2201 Leonard Street location.

ADDING A LOUISIANA OPERATION: 1943

The Glazers apparently had a falling-out with Schlitz in 1941, when the brewer sued the three brothers and Real Juice Company seeking $11,671. The two parties settled out of court when an agreement was reached on the disputed claims. Glazer's first expanded beyond the Dallas market in 1943, establishing an operation in Louisiana. In July of that following year, 70-year-old Bessie Glazer, her husband having long since passed away, died in a bathtub accident, succumbing to injuries received from scalding water. Glazer's expanded into Arkansas in 1946. It was also during this period that Max and Nolan played a prominent role in raising money to relocate displaced European Jewry to what would become Israel. They were also involved in a number of other humanitarian and philanthropic endeavors.

In 1946 a second generation of the Glazer family became involved in the business in the form of Max's son, Irving D. Glazer, who had just finished serving in World War II. In 1949 Robert S. Glazer, Max's 26-year-old son, also joined the company. Their father remained the head of the company until his death in late 1962. The following month his brother Nolan succeeded him as president. He took charge of a spirits distributorship that operated 13 branches in three states as well as the Pepsi franchise. By this time his sons, Robert L. Glazer (called "R.L.") and Bennett Glazer had joined the family business in the 1950s and 1960s.

With the second generation of the family assuming greater control, Glazer's continued to enjoy robust growth over the ensuing decades. The company bought out competitors in Texas, Arkansas, and Louisiana, and entered a new market in 1966 when R.L. launched an operation in Arizona. Five years later he returned to Dallas to become a vice-president in the corporate office. A short time later, in July 1972, Irving Glazer died at the age of 48. Nolan Glazer, on the other hand, lived until 1991 when he died from heart failure. Robert S. Glazer assumed the presidency of a company with 15 branches in four states.

COMPANY PERSPECTIVES

We are committed to being the finest sales and marketing organization by partnering with our customers and suppliers to give superior customer service through innovative techniques.

In 1996 there was a major changing of the guard as R.L. Glazer became chairman of the board and treasurer, and Bennett Glazer was named president. There also were changes taking place in the beverage industry in the mid-1990s, as a wave of consolidation took place among suppliers as well as distributors. Doing business of $700 million a year, Glazer's was far from a small company, but given the industry trend the company clearly had reached a crossroads in its history. According to vice-president of corporate strategy Louis Zweig, management decided that it had three choices: "We could be the acquirer, we could retrench or we could be acquired…. The Glazer family made the decision that we would be a major player in the market, that we would start growing and that we would do it in a multi-faceted way." Bennett Glazer told US Business Review, "At that point, we had to either get in the game or get out." He added, "We realized we couldn't go on as the status quo. We became proactive and put together a vision." That vision would include acquisitions, internal growth, and joint ventures.

ADDING BEER DISTRIBUTION: 1997

In the final years of the 1990s Glazer's entered several new states, growing northward from its Texas base, and added new product lines. The 1997 acquisition of Long-view, Texas-based Maxwell Distributing expanded the company into beer distribution, a field in which Glazer's had not been involved for many years. Late in the year the company moved into Missouri through the acquisition of Boone Distributing and its branches in Columbia, Springfield, and Joplin, Missouri. Several months later the Missouri business was bolstered with the acquisition of Griesedieck Imports, distributor of boutique wines and specialty beers in Kansas City and St. Louis. Also in 1998 Glazer's formed a joint venture with Chicago's Romano Brothers Beverage Co., named M&M Beverages L.L.C., to buy Olinger Distributing Co. Inc., the second largest wine and spirits distributor in Indiana. M&M was subsequently merged with a small Romano Brothers subsidiary, Miller Distributing. Also in 1998 Glazer's Arizona operation, Cactus Beverage, merged with Arizona-based Sunbelt Distributing's Arizona Beverage to form a 50-50 joint venture, Alliance Beverage Distributing Company, to conduct wholesale liquor distribution in Arizona.

In another 1998 move, Glazer's acquired Des Moines, Iowa-based Messer Distributing, forming the basis for subsidiary Glazer's of Iowa, adding yet another state to Glazer's reach. Glazer's also made a bid to enter Kansas in 1999 by acquiring Premiere Beverage of Lenexa and A.B. Sales of Wichita, which shared mutual ownership. The deal was put on hold until 2001 because of a 52-year-old Kansas law that prevented out-of-state liquor wholesale companies from doing business in the state. The law had been put on the books as a way to make it easier to do criminal background checks on buyers, thereby limiting the chance of criminal elements becoming involved in the state's liquor industry. Given that nonresidents could acquire liquor licenses and even manufacture liquor in the state, and that modern technology and crime databases rendered the underlying premise of the law antiquated, it was only a matter of time before a federal judge issued a ruling that set aside the Kansas law and paved the way for the acquisition to be completed. Glazer's also looked to achieve internal growth in the final years of the decade. It established a subsidiary called Glazer's Domaines & Estates to work with fine wine producers to market their wines through the Glazer's network.

Glazer's entered the new century with momentum. Sales neared $1.5 billion in 2000, a 33 percent increase over the prior year, making the company the eighth largest beverage bottler/distributor in the United States. Glazer's took a step back to get a better grip on its increased size and scope, and in 2001 solidified its funding by securing $25 million by issuing notes arranged by Banc One Capital Markets. Those funds were used to help Glazer's acquire a 60,000-square-foot distribution center in Kansas in 2003 and open a business development office in Napa Valley, California, providing the company with a toehold in the state. A short time later Glazer's returned to the capital market with Banc One to raise another $75 million.

KEY DATES

1933:: The company is founded by Max, Nolan, and Fritz Glazer.
1943:: The company expands to Louisiana.
1946:: Arkansas is added to Glazer's territory.
1962:: Max Glazer dies.
1966:: Glazer's enters the Arizona market.
1991:: Nolan Glazer dies.
1997:: Missouri's Boone Distributing is acquired.
2003:: Reliance Wine & Spirits Co. is acquired.

Glazer's forged another major alliance in 2003, joining forces with Indianapolis-based National Wine & Spirits to work together in Illinois, a state with an estimated $1.3 billion in annual business. As a result, Glazer's entered a new state with a sales force and infrastructure in place, while National, the largest wine and spirits distributor in the Midwest, gained access to Glazer's extensive portfolio of brands. Glazer's also grew through acquisition in November 2003, adding Tulsa-based Reliance Wine & Spirits Co., Inc., the largest distributor in Oklahoma. It was the eleventh state in which Glazer's operated. In early January 2004, Glazer's expanded its Oklahoma business by acquiring Hirst Imports Co., based in Oklahoma City, giving Glazer's the top two wine and spirits distributors in the state. Later in 2004 Glazer's acquired Wisconsin-based Capital-Husting Co. Inc. and its Nebraska sister company, Sterling Distributing Co. Although this move expanded Glazer's Midwest reach, the company chose not to extend the Glazer's name to these markets, preferring instead to allow the subsidiaries to do business under their established names. Capitol-Husting, for instance, had been in business for more than half a century.

The Glazers had worked hard over the years to work constructively to keep the family business together. A fourth generation was well entrenched in management positions. Mike Glazer was an executive vice-president and possessed more than 20 years of experience, and Barkley Stuart also had joined the company, becoming chief operating officer after 14 years of work for nonprofit corporation Change Inc. Whether Glazer's would remain independent and family owned and operated came into question in May 2006. The Dallas Morning News reported that Glazer's was talking to potential buyers. The United States's largest spirits distributor, Miami-based Southern Wine & Spirits, was reportedly talking to Glazer's about a possible purchase or merger. As had been the case for the past decade, the industry remained very much in a state of flux. "We're talking to everybody, and everybody is talking to everybody," Glazer's Zweig told the press. "This is a consolidating industry, and the speed of consolidation is increasing."

PRINCIPAL SUBSIDIARIES

Glazer's of Texas; Alliance Beverage Distributing Company; Glazer's Distributors of Arkansas; Olinger Distributing Co.; Glazer's of Iowa; Premier Beverage; Glazer's of Louisiana; Glazer's Companies of Mississippi; Glazer's Midwest; Glazer's of Ohio; Glazer's Oklahoma.