In the world of beverage logistics, where smooth operations and timely deliveries are crucial, collaboration emerges as the secret sauce that fuels success. As the industry continues to evolve, beverage companies are discovering the power of establishing solid partnerships with innovative third-party logistics (3PL) companies. These partnerships bring a disruptive approach to food and beverage logistics, revolutionizing traditional models and driving growth for both parties involved. 

In this article, we will explore how a powerful integrated relationship with a reliable 3PL company can transform a beverage company’s strategic approach to logistics, referencing the successful collaboration between Stone Distributing and Zengistics. This groundbreaking partnership was the focus of a supply chain webinar streamed live on Jul 19, 2023, hosted by Supply Chain Now’s Scott Luton and Greg White, with the invaluable support of Turvo. You can watch the webinar in full below or read the summary below.

The Shipper/4PL Relationship Reimagined with Turvo

The Transformation of Stone Brewery’s Logistics Model

Stone Distributing Company (SDC) is a prominent premium beverage wholesaler in Southern California, established in 1999 by the founders of Stone Brewing, Greg Cook and Steve Wagner. While SDC operates under the same founders, it is distinct from Stone Brewing as it focuses on distributing independent craft beverages. Over the years, SDC has become the country’s largest distributor of such beverages. 

Relying on a single asset-based carrier and experimenting with multiple 3PLs resulted in inefficiencies and limited success. Clint felt “there was enough predictability in the model that we could do much better than we did. But there didn’t seem to be any carriers I spoke with that had the ability or the willingness to lean into that with us.” These challenges that Stone Brewery needed to overcome are not uncommon in food & beverage logistics as companies look to develop an effective and efficient beverage logistics strategy.

  1. Overreliance on a single asset-based carrier: Stone Brewery relied on a single carrier for 100% of their freight, leading to delayed pickups, low truck fill rates, and increased detention costs.
  2. Manual load building and lack of optimization: Stone’s logistics team manually built their loads, leading to inefficient routes and suboptimal load planning.
  3. Inefficient use of multiple 3PLs: After trying numerous 3PLs to manage transportation, Stone faced challenges with poor route optimization and low fill rates due to craft beer not being a high priority for larger brokers.
  4. Trust issues and communication problems with brokers: The previous experiences with brokerages led to service and execution falling short of expectations, resulting in a lack of trust and communication breakdown.
  5. Unfulfilled promises from transportation providers: Stone looked for a transportation provider with load-building capabilities and customizable shipment visibility but encountered organizations that promised but failed to deliver results.

The introduction of Zengistics brought about a significant shift in logistics dynamics as both companies evolved their business models and operations. Clint adds, “We were looking more for a thought partner instead of just an execution partner… It was fun to look at data that neither of us had ever looked at before in that way and then start to make decisions on build cases internally at Stone.”

Building Trust Through Transparency and Collaboration

Trust is the cornerstone of any successful partnership, and in beverage logistics, you build trust with transparency, visibility, and delivering on promises. When partners openly share data and insights, communication becomes seamless, and collaboration flourishes. Matt adds, “Stone began making a lot of decisions operationally based on what we were able to put together.” 

This strong foundation allows for greater accountability, informed decision-making, and the ability to tackle challenges collectively. By adopting innovative technologies like Turvo, food and beverage logistics partners like Zengistics empower companies with real-time data, transforming business operations. Gregg adds, “Metrics-driven is critical and not common… This is really hard to overstate how different this is than the traditional take on beer or even the craft beer industry.” 

Customized Approach to Logistics: Powering Data-Driven Decisions

A key highlight of the Stone Brewery-Zengistics partnership is the emphasis on data-driven decision-making. As Greg emphasized, metrics-driven decision-making becomes a critical differentiator, revolutionizing the conventional beverage logistics approach. The ability to convert data into actionable insights becomes an essential factor in overcoming challenges.

Zengistics implemented a comprehensive strategy to enhance efficiency across Stone’s supply chain. They prioritized the planning phase for each load, leveraging Stone’s master production schedule to facilitate the entire process. This approach helped Stone answer questions like, “What is the best strategy when manufacturing on two coasts and delivering to all 50 States? How often should we ask our distributors to place orders?”

Zengistic’s services encompassed load building, pickup planning, truck packing, routing optimization, and timely delivery through truck procurement. As a result, an impressive 98% average fill rate and maintained a 98% on-time delivery rate

Real-Time Visibility for Accountability

For Clint from Stone Brewery, real-time visibility and transparency are paramount in building trust and accountability. He acknowledges the significance of having access to data showcasing the company’s daily, weekly, and monthly performance. Turvo becomes instrumental in providing this level of transparency and enabling informed decision-making. Clint adds, “We wanted something that we can look at on a daily, weekly, monthly basis that shows what we say we’re doing.”

The Power of Being a Thought Partner

Matt emphasizes that being a thought partner, not just an execution partner, is their primary goal. “My main job is to try to make Clint look as good as possible… It’s about really trying to serve us to grow their company or being the right partner for the long term.” The focus is on supporting Stone Brewery’s growth and success, making them the right partner for the long term. This consultative approach and collaborative nature of the partnership allow Stone Brewery to leverage data in unprecedented ways, leading to better internal decision-making, as stated by Clint.

Innovative Solutions for Scalable Growth

Zengistics’ commitment to solving complex supply chain challenges becomes evident in its approach to providing managed services and transportation as a service offering. Our focus is not solely on moving freight but on driving growth for their clients. We leverage innovative thinking and technology to help clients like Stone Brewery grow revenue through strategic supply chain management.

Matt adds, “We use managed services or transportation as a service offering where we come in and usually take 100% of a company’s inbound or outbound freight… We can help customers grow revenue through different innovations around how we’re thinking about total cost of ownership return on investment.” 

Turvo: A Game-Changing Logistics Analytics Tool

Turvo’s real-time financial reporting and analytics capabilities give Stone Brewery valuable insights into its financial performance and service levels. Matt underlines the importance of utilizing Turvo to make informed decisions, hold teams accountable, and drive financial success. “Turvo is great from a usability perspective… The financial side of Turvo means it’s real-time, profit and loss (P&L). And for a president of an organization, that’s important… It allows you to make great decisions inside of there; you can hold your team accountable from a financial and a service perspective.” 

The Impact of Transparent Partnerships

Transparent partnerships like the one between Stone Brewery and Zengistics drive better decision-making by providing real-time visibility into operations. The emphasis on trust and collaboration creates a strong foundation for overcoming challenges and embracing innovation. The transformative power of collaborative logistics partnerships is evident in the remarkable results achieved by both companies.

Clint gives the example of volatility in freight. “When freight rates drop or go up like crazy, your partners show their cards at that point, and you find out if they’re willing to work with you. Everyone is in this to make a buck, but at the same time, we don’t have to gouge each other. That means a lot to me.” 

During the challenging times of the COVID pandemic, Zengistics faced significant financial difficulties due to the impact on the Stone business. Acknowledging the severity of the situation, Matt approached Clint with complete transparency and openness, expressing their challenges and the need for help. He candidly stated, “During Covid, we got massacred. There’s no other way of saying financially massacred on the Stone business. And I went back to Clint very openly and said, I’m getting killed here. I need help. But I guarantee I will be better than the market.” This level of vulnerability and trust laid the groundwork for finding a solution together.

Matt emphasized, “I don’t have major super highs, and I don’t have major super lows inside the Stone thing because we work to make sure that it’s fair on both sides. There also has to be a mutual understanding partnership, and we have that. It’s not in our best interest not to work together.” This collaborative mindset allowed them to weather the storm during difficult times. Matt and Clint worked on multiple financial models, constantly adjusting to the changing circumstances and market conditions. 

Their strong partnership was not just about moving loads or transactions but also supporting and growing each other’s businesses. Matt’s commitment to Clint’s success was evident: “What I think works for us inside of our businesses, consider us a disruptive brand isn’t just what we do. We’re disrupting what traditional brokerage kind of looks like… It’s about trying to service and grow their company and being the right partner through it for the long term.”

Redefining Beverage Logistics through Collaborative Disruption

In conclusion, the power of a strong, integrated relationship with a disruptive 3PL company like Zengistics can significantly impact a beverage company’s strategic approach to logistics. Through trust, transparency, and data-driven decision-making, these partnerships drive operational excellence and foster innovation. The successful collaboration between Stone Brewery and Zengistics showcases how innovative 3PL companies are revolutionizing beverage logistics, positioning the industry for sustainable growth and success.

As the beverage industry evolves, strategic partnerships with forward-thinking 3PL companies will remain instrumental in overcoming challenges, meeting consumer demands, and creating a competitive edge. Zengistics’ dedication to innovation, collaboration, and transparency stands as a driving force in redefining the future of beverage logistics, ensuring that products reach consumers seamlessly while setting new standards of excellence for the industry.