Rocky’s road to the top

Rockys Road

Rocky Wirtz has been grinning almost nonstop for three hours. It’s an important week for the owner of the Chicago Blackhawks as his team faces off with the Phoenix Coyotes in the first round of the playoffs. But the source of his glee isn’t at the United Center. It’s on a Cicero construction site north of Hawthorne Race Course.

Here, the chairman of Wirtz Corp. steers a golf cart around the new $80 million home of Wirtz Beverage Illinois. The largest company in the $2 billion Wirtz Beverage Group will consolidate its Schaumburg headquarters and warehouses in Wood Dale, Bensenville and Elk Grove Village into one 605,000-square-foot launch pad for the future.

“The playoffs are exciting, but this is something we spent a lot of time and a lot of effort doing,” says Mr. Wirtz, 59. “It’s going to set Wirtz Beverage Illinois up for 20 years. It’s something not for my generation but for future generations.”

Mr. Wirtz’s liquor business has grown dramatically in the past three years. The Illinois unit is the largest in the state with $1.1 billion in revenue. Wirtz Beverage Group, which also operates in Iowa, Minnesota, Nevada and Wisconsin, is the nation’s sixth-largest, according to M. Shan-ken Communications Inc.’s Impact newsletter. Miami-based Southern Wine & Spirits of America Inc. leads the industry with more than $9 billion in sales.

The hockey team provides celebrity, but it’s the liquor business that accounts for half the net revenue that parent Wirtz Corp. earns from its collection of real estate, banking, insurance and sports entities.

Rather than construct a Taj Mahal, “we wanted an efficient building first,” Mr. Wirtz says.

Early attempts to find an appropriate site through brokers failed. So Wirtz Corp. handled the search internally and worked directly with the town of Cicero to buy a property.

The building sits on 35 acres on the west half of the old Sportsman’s Park site. Wirtz got $13 million in tax-increment financing in the deal. Those funds paid for a community ice rink, two traffic lights and land improvements.

The two-story office building has a gym with a full locker room and a company-subsidized cafeteria for the 1,000 employees, who will start moving in next month. The warehouse will go through testing and begin deliveries by Sept. 4.

One special feature is the “Alchemy Room.” It has a commercial kitchen and massive demonstration bar with multiple video screens for sales and training. Plus, distillers, winemakers, chefs and bartenders can use the space to test new drinks.

But the real jewel is the 500,000-square-foot warehouse. It can hold 2.5 million cases—more than $100 million worth of inventory.

There are 39 shipping and receiving bays linked to a computerized conveyer system that sorts and moves cases for delivery. Where the distributor used to process 5,500 cases per hour on average, it soon will be able to process 8,500 to 10,000 cases.

“It’s all about getting cases delivered to customers efficiently, accurately and on time,” says David Henkes, vice president at Chicago-based retail consultant Technomic Inc. Even with strong sales, “if you are not a well-run, efficient distributor, it’s all for naught,” he says.

EFFICIENCY
By using a single, automated location, Wirtz can slash the number of times a case is handled from as many as 15 to just twice. “Every time a worker touches a case, it costs the company,” says Julian Burzynski, senior vice president and general manager of the Illinois operation. He also oversees facilities in Rockford, Peoria and Belleville.

Michael Binstein, CEO of Skokie-based Gold Standard Enterprises Inc., says Mr. Wirtz has upgraded the liquor business much the way he did the hockey team. “He’s done it on the ice, and he’s done it off the ice,” says Mr. Binstein, who operates 28 Binny’s Beverage Depot stores in Illinois and works with most of the state’s distributors. “If this were a hockey game, they’d be up a few goals.”

Mr. Wirtz’s grandfather Arthur established the real estate company in the 1920s, which was followed by an ownership interest in the hockey team and then the liquor business and the banking and insurance companies.

Eight other members of the family work at Wirtz Corp., five of whom are employed by the liquor business. Mr. Wirtz’s son, Danny, is vice president of marketing and sales at Wirtz Beverage Group. Two cousins are at Wirtz Beverage Illinois: Arthur III is vice president of operations and James is a key account manager at the Regal Division. Two daughters also have roles: Kendall is a human resources coordinator at Wirtz Beverage Illinois and Hillary is director of training at the Regal Division.

The current patriarch took over the company in 2007, following the death of his father, Bill. While the ultimate prize in hockey is a large silver trophy, in the beverage business it’s a strong company to pass on to the next generation. “If I can do that then I’ve done my job,” says Mr. Wirtz, “and that’s the Stanley Cup as far as the liquor business goes.”

View the full article on Crain’s Chicago Business

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Filed under Beer, Dave Henkes, Liquor, Press Release, Spirits, Wine

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