The right mix: M&M Distributors backs up traditional sales techniques with a modern fleet and computer technology

The Right Mix M&M Distributors of Lansing, MI, is a company that melds the best that past and present have to offer. Like many Anheuser-Busch houses, the company holds firmly to peddle-route selling, but M&M has enlisted modern technology to ensure efficiency. M&M driver-salesmen may still sell their wares personally at each stop, but the order is recorded on state-of-the-art hand-held computers.

Mac MacMillan founded M&M Distributors soon after World War II. The company remains a family concern, run by Mac's nephew Andy, and M&M still proudly bears the names of its founders--Mac & Marie.

When M&M started out in 1946, the company sold beer for the Frankenmuth Brewery, an antecedent to Heilman. In the early '50s, however, M&M aligned itself with an up-and-coming St. Louis brewer, Anheuser-Busch. "In 1954 we were appointed an Anheuser-Busch distributor," Andy MacMillan recalls, "and over the years, as the other brands declined, Budweiser and Michelob grew. We became an exclusive Anheuser-Busch house in 1961. From there on," he says, "we all know the history. As Anheuser-Busch has picked up a bigger share of the market, we have grown right along with them."

MacMillan reports that ANheuser-Busch holds a 54-percent share of market in Lansing. "There's a certain variation in market share in different parts of the state," he notes, "but I think it's safe to say that everyone with Anheuser-Busch in their stable is showing good growth."

According to MacMillan, growth is a function of straightforward business philosopy. "In my view," MacMillan states, "it comes down to the basics. A wholesaler's function is to service and assist retailers, and keep a clean, neat fleet with enough manpower to do the job. However," he adds, "a wholesaler also has to do his share of the load in the total marketing concept. It's not like turning on a faucet--because in our business, the consumer is the boss. It takes time and money to get the consumer to think about your product."

To help monitor M&M's presence in the marketplace, the company has embraced computerization. "the technology available to wholesalers has really allowed us to fine-tune our operation," MacMillan states. "With computers, we can pinpoint where our efforts are most successful. We check on total call frequency, and check on how well our volume accounts are being serviced.

"We are also using Norand hand-held computers," MacMillan relates, "and our customers love them. Now they don't have to spend the time checking inventory entries in long-hand. Overall," he says, "I think we have fewer errors. The units have eliminated the need for the retailer to check every order with a calculator.

"We decided to employ the Norand units," MacMillan says, "not just as something for the ease of the drivers, but as a marketing tool. We haven't been disappointed."

In other areas, MacMillan reports the company has held off on full computerization. "We haven't computerized our routing," he says, "because in in our territory we have 560 accounts. It's pretty easy for us to set up routes from a geographical standpoint.

"I've seen computerized routing work for companies that are using pre-sell," Andy says, "but our philosophy has always emphasized customer service.

"There could come a day when we go to pre-sell," MacMillan notes, "although I hope not. Unfortunately, we may be forced into it because of package proliferation alone. I know that six out of 10 wholesalers are in favor of it, but I hate to take the incentive from the driver-salesmen. I've always believed that if you've got a good crew, pre-sell isn't essential.

"Peddle routes allow a personal touch with the retailers that you can't get any other way," MAcMillan continues, "and if you've got confidence in your driver-salesmen you can't beat it. I think the whole idea of pre-sell evolved from poor labor relations--and people wanted to avoid hiring driver-salesmen.

"There's a lot of talk now about hybrid systems," MacMillan says. "With some bulk pre-selling. I can see that evolving already, even in peddle system contracts. Nonetheless," MacMillan says, "if we have the right people in place, and can build that rapport, we'll win the merchandising battle."

MacMillan also notes that the right products can go a long way towards winning that battle. "It's an interesting arrangement," MacMillan reports. "We are an exclusive Anheuser-Busch distributor, but not totally, since we still handle some novelty items. In addition to Carlsberg imports, we also handle Cinci beer and three or four Mexican beers."

The distributor has also begun tenatively diversifying into other beverages. "We have handled the different beverages that Anheuser-Busch has experimented with," MacMillan says, "from wine coolers and water, and we also handle Welch's juices."

MacMillan reports the company also serves as distributor for New York Seltzer products. "About two or three years ago," MacMillan says, "we decided to look around for products that fit our image, which we see as being based on selling quality products. That's when we developed our relationship with New York Seltzer.

"Our specialty products division has been an interesting education for us," MacMillan continues, "in that it has allowed us to experiment with pre-sell. It's given us an insight into a business that used to be totally foreign to beer people. We will continue to tap into new segments that might help us make our beer business better."

Rolling billboards

Making business better also means an emphasis on transportation. The company has developed graphics packages to emblazon the trucks, and highlight product offerings.

"Just like everywhere else in the country," MacMillan states, "our on-premise sales in Michigan have been eroding. As one of our projects to draw attention to the

draft-beer segment, we envisioned the truck fleet as a set of rolling billboards--with graphics that highlight our draft beer offerings.

"We had worked out graphics for our party trailers that made use of all our brand names," MacMillan says, " and we liked the looks enough so we wanted to use the same elements on our trailers.

"We think it adds a new dimension to our visibility," MacMillan says, "and we believe these trucks have promoted growth in our draft beer segment. We still get compliments from retailers."

The backbone of the M&M delivery fleet is made up of GMC Top Kick medium-duty trucks. Early specifications called from the Detroit Diesel 8.2 L diesel, although recent vehicles have been speced with Caterpillar 3208 diesels. The fleet also includes a few International S-Series Model 1900s, powered by the venerable International DT-466.

"When the time comes to spec out a vehicle," MacMillan says, "I sit down with Rich Doucette, our head mechanic, and Paul Droste, and we decide on what we need. We know ur past specs and we take a look at how they've worked in service."

MacMillan reports that the local economy is also an influence on the specification process. "This is a GM town,c he notes, "and we are proud to help support the local economy."

The company now fields 21 trucks, with additional trailers and vans. "We update equipment periodically," MacMillan says, "based on our changing needs. Our trucks are mostly employed on short hauls, so they don't put on too much mileage. Our longest run is 102 miles, round-trip. Some routes won't put 16 miles a day on them," he says. "For trucks servicing the high volume chain stores, there are only five or six stops a day."

M&M maintains all equipment in-house. "Our maintenance program has proven successful," MacMillan states, "in that we have had minimal breakdowns. We get excellent cooperation from driver-salesmen, and from our local GM contact.

"We don't do any engine overhauls here," notes head mechanic Doucette. "Our equipment is new enough so warranty handles most of it, and we run our warranties right ragged.

"OurPM schedules on the diesel engines vary,c Doucette says. "We'll usually let the Detroit Diesel 8.2 L go 4,000 miles, and not over four months. We've had some injector problems with them, and we have to keep an eye on fuel in the crankcase as well. The DT-466 goes 6,000 miles," he says, "and the Cats also run out to 6,000."

Additional specs include Clark five-speed and Fuller six-speed transmissions with two-speed rear axles. Questioned about the spec, Doucette says, "I think automatic transmissions are usually speced by fleets that don't have regular, trained drivers. The two-speed axle is another spec that might not be chosen by fleets that use temporary drivers, because I've heard about a lot of fleets having trouble with them. For us, they've been a money-saving spec. The only problem has been that the old ones seem better than the new ones.

Spoked aluminum wheels are speced, with radials and bias-ply tires mixed in the fleet. "We don't do our own tire work," Doucette says. "We have Dunlop and Goodyear shops in town."

Trailers and truck bodies are built by Mickey and Ekmer. "We do a lot of body repair and modification right here," says MacMillan. "The only time we send out is for a major part."

MacMillan notes the switch from steel to aluminum. "We've still got a few steel bodies," he says, "but today most are aluminum. The transition started in 1981. Aluminum doesn't show the rust and its easier to maintain. They're also lighter-weight, so we can haul more payload and stay within our weight limits."

MacMillan also notes the impact of legislation on equipment choices. "We used to use 10- and 12-bay trucks," he says, "but with the bottle bill in Michigan, most wholesalers went to the tractor-trailer concept because we needed the extra space. Our back bays are strictly for bags of cans," he says, "they only open on one side for easier loading."

According to MacMillan, current specs have proven themselves in service. "We do still compare prices when we're looking at vehicles,c MacMillan says, "but as long as they're in the same ballpark we'll go with our proven choices."

MacMillan states that future vehicles will probably be GM, with Cat power and Fuller transmission. "The combination of the Cat 3208 and the six-speed is working out real well," MacMillan notes.

Meeting the Challenge

MacMillan notes that the business of wholesaling has become more complex in a time when the foundations of the beer business are under assault. "Our critics are taking potshots at the industry like never before," Andy notes. "The heat is on. Anheuser-Busch has been very active, and they have asked every one of their distributors to become active in defending the industry.

"What's really wrong is the association of alcohol with illegal drugs," MacMillan says, "it's ludicrous, and terribly wrong. We are running a licensed legal business here.

"Beer distributing is an honorable business," MacMillan continues, "and has been part of the growth of this country from the start. The products that we provide stimulate camraderie and fellowship. Of course there is a negative aspect to alcohol, but I have a philosophical problem in equating legal products and illicit substances that are used exclusively for mind-altering purposes.

"Our business has grown through family and friendships," MacMillan says, "and it bothers me when I see our industry portrayed erroneously in the newspapers. The day my grandchildren come up to me and say, 'grandpa, you see a drug,' will be a sad one for me. But the way the media paints us, that day may come.

"I'm concerned about the problems of alcohol abuse," MacMillan states, "and I want our business to be part of the solution, notpart of the problem.

"We're interested in the public good," MacMillan says, "and in public safety. We support the 21-year-old drinking age, mandatory deposit law and restrictions on price promotion. We're paying taxes.

"We're a federally-regulated business trying to operate in a very tough environment," MacMillan says, "and we're doing business in a responsible fashion. We inted to go right on doing that."

COPYRIGHT 1991 Business Journals, Inc.
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