In April, Breakthru Beverage Group announced an expansion of its Canadian business, establishing a new sales and marketing division. The new division will allow suppliers to partner with Breakthru as a broker to serve their needs across the Canadian provinces. The company has had a Canadian presence since it established a national partnership with Diageo in 2014, as Wirtz Canada at the time.
“This has been an evolution for us over the past few years,” says Julian Burzynski, President of Breakthru Beverage Canada. “Our game plan from the beginning was to expand our footprint in North America and we went full bore into it with our partnership with Diageo in 2014. Over the past three years we’ve been successful in growing that business, and ensuring we have relationships with all 10 provinces. We feel very comfortable with our current Canadian team and business, and are now looking to expand with new suppliers who align to our business model.”
While most provinces in Canada are similar to control states in the U.S., they each present unique challenges and have slightly different rules and regulations. That’s one reason there are so few middle tier companies that cover the entire country, because it takes a significant amount of time to learn the dynamics of each province.
“Our biggest learning when we entered Canada was to check our ego at the door,” Burzynski says. “We didn’t think we had all the answers, and knew we needed to understand the market first. We looked at it as 10 different markets, rather than one single market. We’re not trying to change any provincial operating processes – we’re just taking our expertise with digital, training and reserve management, things we’ve done in the states for quite some time, and slowly implementing things through our sales team.”
Wirtz Beverage Canada was folded into Breakthru Beverage just last year, giving the parent company 10 additional markets in its North American footprint. Following months of integration, Burzynski says his group is now entrenched within the larger organization.
“More and more suppliers are looking at a North American footprint, rather than just the U.S.,” he says. “As suppliers continue to consolidate and distributors continue to consolidate, there is a real opportunity for us to attract suppliers who want to serve all of North America and create value for them.”
Like their U.S. counterparts, many Canadian provinces are expanding opportunities for private businesses to enter the market. Ontario is expanding grocery licensees, for example, and Vancouver recently moved from a market where private stores bought at a discount from government retailers, to a wholesale pricing market. Those changes, in addition to overall market conditions, make Breakthru Beverage bullish on the Canadian market in general.
“The governments are trying to be more open and appealing to more customers because they want to sell more product, which means we can add value as a broker” Burzynski says. “It’s all about creating value for the provincial boards, as well as creating value for our supplier partners.”