Carving out a Space in the Australian Beverage Market

Metro Beverage Company

The business took off almost immediately. Today, the once humble operation is a major Australian beverage distributor with an impressive stock of international brands and Australian brands and a growing national presence.

“The company has come from being a three man operation to [employing] just under 100 people within 14 years,” Henry explains. And it hasn’t been an accident. “I think it really boils down to hard work and determination… and when opportunities arose, we took them.” Indeed, the family has a nose for industry trends – a talent that has earned them an enviable share of the nation’s beverage distribution market. “We’re always open to ideas and innovation if it has merit within the industry,” Henry says.

Phenomenal Growth

The family was keen to expand from day one and, back in 2000, they leapt at the chance to align with Unilever’s Lipton Iced Tea brand. In response to this promising contract, the business changed its sales and distribution model into a ‘book and deliver’ system, and the company quickly took off from there.

The family was also carefully studying the increasing popularity of energy drinks in Europe and Asia during those early years. “We saw the opportunity,” Henry recalls. “We saw the market trend of the product overseas.” As a result, MBC was “one of the first to jump on Red Bull.” In fact, the company was one of the only operations in Australia at the time to recognise the huge potential of the energy drink market. “They used to laugh at us,” Henry remembers. “People were laughing at the fact that you would pay $3.00 or $3.50 for a 250mL can, when back in 1998 or 1999 you could buy a 600mL Coca Cola for $2.00 a bottle. That’s all changed nowadays, but the challenge back then was to try and convince retailers that they need this product, that this is the future.”

How did MBC manage to convince retailers and successfully change the face of the Australian beverage market? “It was just persistence, determination, and hard work,” Henry explains. “We got distribution, we gained traction, and people started to buy the products; the marketing came along with it and we found ourselves in a really good position.” The company’s early success had a snowball effect, and the team was able to add other key brands to its portfolio, including Mountain Fresh Fruit Juices, Ribena and Lucozade.

Throughout this expansion, Henry says that the company’s strategy placed “a very strict emphasis on niche brands in an ever evolving market.” In other words, the team was always on the lookout for “new, fresh, healthy, functional alternatives.” This strategy hit the nail on the head and, in 2005, the team was able to expand operations into South Australia and Western Australia and establish new regional offices in Adelaide and Perth. “The bold and extremely challenging move proved successful, with MBC establishing itself as a major prominent player in these two new markets,” Henry reports. The company also updated its name during this period, replacing “Melbourne” with “Metro.”

Today, MBC is one of Australia’s largest independent route distributors of beverages and boasts an active customer base of over 10,000 accounts over the three capital cities. Some things haven’t changed, however. The company is still 100 per cent family owned, and the three founders remain at the helm.

Success Story

“MBC has always had a strong emphasis on launching new products and new beverage categories with a niche market positioning,” Henry explains. “This emphasis is how the company established itself and its reputation within the FMCG industry.” Indeed, the business carries a diverse mix of Australian-made and imported beverages, giving customers a satisfying range of leading products from which to choose. This product range includes major brands such as Lipton Iced Tea, Red Bull, Ribena RTD, Mountain Fresh Juices, Nu Pure Water and Thank You Water, all of which “are testament to MBC’s expertise in beverage sales and distribution.”

MBC’s uncanny ability to recognise – and take full advantage of – emerging market trends can be traced back to one core concept: “In the end, it’s all about giving our customers what they need – good brands, good service, and competitive pricing,” Henry says. Expansion also means accepting risk. Even though MBC hasn’t gotten it wrong yet, nobody can ever be entirely sure how a new product will go over. For this reason, the family is always mindful of the business’ current market positioning before launching into the next phase. “Get the thing you do best right first, before venturing into other opportunities,” Henry cautions.

“Giving customers what they need” obviously means offering a specific product ideal for the target market. Equally important to this concept, however, is providing stellar customer service. “At the end of the day, we don’t offer our customers anything less than what we expect ourselves from our suppliers: efficiency, reliability, great products, great prices, great deals, and going the extra mile for your customer. We are always committed to improving our customers’ satisfaction and expectations of MBC.”

The company also credits its strong relationships with retailers and suppliers. MBC appreciates its close ties with strong industry brands such as 7-11, BP, and Subway, as well as with countless Mum and Pops. “Every single corner store [has] played a big part in the growth and support of the MBC business,” Henry says. Support from suppliers, many of whom are leading players in the international beverage industry, has also been vital to the company’s success. “Our suppliers are our business partners,” Henry points out. “Working closely together has been pivotal in our achievements.”

Looking Ahead

MBC isn’t resting on its laurels. Instead, the team continues to push forward with new products. One noteworthy recent addition to the company’s portfolio is the not for profit Thank You Water brand. The Thank You Water P/L organisation donates the profits from each sale to building water wells in developing countries. “We loved the concept. We loved the idea,” Henry says. “We were the first to jump on board and really drive their brand.” MBC was hooked within the first ten minutes of the organisation’s sales pitch, he adds. “[We ordered] 38,000 bottles on the spot,” and the partnership was a natural fit. “The social responsibility that was being presented by three enthusiastic university students without a cent behind them reflects MBC’s values and behaviours,” Henry explains. Several other recent launches have been met with great success as well, including Nu Pure Water – Australia’s first water in a biodegradable bottle; the new Red Bull Special Editions; and Lipton Iced Tea Virgin Mocktails.

The team is also carefully following market trends so that it can continue to distribute the hottest, most sought after product. In fact, this market sense may be more important now than ever before. Henry believes that the average Australian is becoming increasingly discerning of beverages. “Consumers are becoming a lot more conscious in their decision making when purchasing beverages,” he reports. Most notably, he says, is a move toward ‘health and wellbeing’ products. “Society is seeking healthier options.”

Henry also points out that as the company grows, “Our buying power ensures we are able to offer the best brands to our customers at competitive prices, maintaining an efficient and reliable distribution network.” Indeed, the larger the operation gets, the better equipped it is to serve its customers and offer the newest, most up-to-date product range.

The company is eager to expand its customer base with additional niche products in order to enlarge its geographical footprint. “The company is always looking at any opportunity to expand and become a national operation,” Henry explains. With a solid share of the market in three states, covering the entire country cannot be far behind.

To make this goal a reality, Henry says that the team will rely on the same formula that took them from a small Cash Van operation to a leading Australian beverage distributer: “Offering retailers and consumers the best brands, at the best prices, with a service level you can rely and depend on.” And of course, the company will continue to implement its uncanny ability to read the market. The company motto probably summarises it best: ‘We’re serious about drinks.’

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 16, 2018, 6:42 AM AEDT