Clare Rose Inc.

100 Rose Executive Boulevard
East Yaphank, New York 11967-1524
U.S.A.
Telephone: (631) 475-1840
Fax: (631) 475-1837
Web site: http://www.clarerose.com

Private Company
Incorporated:
1936 as C. Rose Distributor Plaza Beverage
Employees: 267
Sales: $199.97 million (2017 est.)
NAICS: 424810 Beer and Ale Merchant Wholesalers

Privately owned Clare Rose Inc. is one of the largest beer distributors in the United States, dominating several markets, including Long Island's Suffolk and Nassau Counties. Besides products from Anheuser-Busch InBev SA/NV and Heineken USA, the company distributes a variety of craft beers, as well as wines, spirits, and nonalcoholic beverages. Based in East Yaphank, New York, Clare Rose is owned by the Rose family and headed by a third generation.

ORIGINS

Clare Rose was founded by Clare F. Rose, who was born in the Long Island hamlet of Patchogue, New York. His father worked as a foreman at a lumber mill, while his mother, of Cherokee descent, worked at a lace mill. Rose quit school at an early age, apparently because of his inability to accept his high school music teacher's criticism of the way he played the cello. He reacted by hurling his instrument into the seats of the auditorium and as a result was asked to leave Patchogue High School.

Rose took a job as a clerk and timekeeper at Bailey's Lumber Mill, where his father worked, and later found employment at area grocers. He became involved in the beverage business when a Pepsi bottling plant was opened in Patchogue during the 1930s. Rose became the operation's first salesman and went on to manage the plant. In November 1936, with a loan from his wife, Mildred, he struck out on his own, forming C. Rose Distributor Plaza Beverage, by launching a small distributorship to handle Mission orange soda, a California beverage. He also took on the Plaza brand of soda.

When the United States entered World War II in December 1941, Rose became a captain in the U.S. Army's Transport Service. Sent home to await deployment to Australia, Rose continued to grow his routes but never received his orders. Instead, he kept working and was able to establish his young business so that by 1944 he was the largest independent soda distributor in Suffolk County. He was also ready to take advantage of the postwar population boom and the buildup of Long Island.

COMPANY PERSPECTIVES

What began as a small soda distribution business in eastern Suffolk County, N.Y., by Clare and Millie Rose, has evolved into Long Island's premier supplier of Anheuser-Busch InBev and Heineken USA.

ADDING TERRITORY

In 1964 Anheuser-Busch asked the company, which changed its name to Clare Rose Inc. that year, to add the western half of Suffolk County. Rose called his son Mark, who was about to graduate from college, and told him that if he did not come to work for him he would pass on the opportunity. Mark had worked for his father during the summers since he was 15 years of age, but he had been considering the idea of working elsewhere after college, at least for a few years. Eventually Mark gave in to his father's prodding.

Mark Rose told the Long Island Business News in an October 2000 interview, “After college, the day I walked into the office, my dad walked away from his desk and said he'd never have to sign another check again.” That gesture was in keeping with Clare F. Rose's belief that members of the second generation in a family business needed the room to run things as they saw fit. Mark was joined by his brother, Fredric (Ric), and they took over the running of the expanded distributorship. Just in case a conflict might arise between the siblings, the elder Rose took care to establish a board of directors, which could arbitrate conflicts after he transferred ownership to his sons. But the board would never be called on to resolve any issues.

Prior to taking over the western half of Suffolk County for Anheuser-Busch, Clare Rose had been a presell operation, meaning that a salesperson first visited an account to take an order and a driver later delivered the beverages. For the new territory, the company now adopted a driver-sales approach, with the drivers taking their own orders. Not only did it eliminate possible confusion between the salesperson and the driver, it proved to be a better fit with many customers (hardworking managers who connected better with a blue-collar truck driver than with a white-collar salesperson who lifted only a pad and pen).

The new arrangement worked so well that Clare Rose soon converted the eastern portion of Suffolk County to the driver-salesperson model. In the beginning, the drivers earned a base salary and received a commission on all sales exceeding a base level. At the urging of the union, however, Clare Rose switched to a pure commission system, whereby drivers earned a commission on every sale they made. It was an arrangement that both sides found beneficial. Drivers virtually owned their routes and were more willing to go the extra yard to make another sale.

COMPANY LOYALTY

The driver-salesperson practice also encouraged company loyalty, a key to the growth of Clare Rose, which hired individuals with the idea in mind of creating lifelong employees. Nonunion new hires generally started out with low-paying positions, such as point-of-sale hangers. Those who proved their commitment to the company would then move to the warehouse and work their way up through the ranks, taking relief sales slots, with the ultimate goal of becoming a driver-salesperson.

To reinforce the idea that Clare Rose was looking for long-term employees, the company parking lot featured a reserved parking space for everyone in the organization, no matter what rank, with the name stenciled on the pavement. To boost company morale, Clare Rose also developed the tradition of hosting a black-tie Christmas party each year, as well as an all-expenses-paid, five-day “convention” at a vacation spot for employees and their spouses. In addition, Clare Rose was willing to invest in technology to help its driver-salesperson to produce even better results. For instance, in the early 1980s Clare Rose was one of the first distributors to equip drivers with handheld computer terminals. Despite some initial resistance, the handhelds proved successful and soon drivers became dependent on them.

CHALLENGES

Under second-generation leadership, Clare Rose enjoyed steady growth, which the company continued during the 1980s despite several challenges. During the mid-1980s the state of New York enacted a new bottle law that mandated that the responsibility for the five-cent deposit on cans and bottles rested with the wholesaler, not the bottler or brewer. The unforeseen problem was that beverages could be shipped into an area and the wholesalers in that market would have to redeem the deposits, whether or not they originated the cans or bottles.

KEY DATES
1936:
The company is founded.
1947:
The company becomes a Budweiser distributor for eastern Suffolk County.
1964:
Anheuser-Busch asks Clare Rose to add the western half of Suffolk County to its territory, which it does.
1991:
Nassau County is added to the company's Anheuser-Busch territory.
1993:
Clare Rose becomes the Anheuser-Busch wholesaler to Staten Island.
2010:
Founder Clare Rose dies at age 98; new distribution center and office facility opens in East Yaphank.
2011:
The company celebrates its 75th anniversary.
2012:
Distribution expands to include selections from Pabst Brewing.
2017:
Clare Rose reaches a new agreement with its union workers, ending an 82-day strike.

Because of its location, Clare Rose was put at a decided disadvantage. As explained in a February 1989 article by Andrew Galvin in Beverage World, “Almost 80 percent of the beer consumed in New York State is sold in the New York City metropolitan area, including Long Island. Thus, wholesalers in the rural northern parts of the state have an incentive to ship beer into the New York City area by selling to a unique tier of ‘home distributors’ with both wholesale and retail privileges. By shipping trailer-loads and ‘forgetting’ to charge a deposit, upstate wholesalers can tempt these home distributors with lower prices than they get from their local wholesaler.”

As a result, an Anheuser-Busch distributor such as Clare Rose found itself competing against Miller and Coors distributors as well as fellow Anheuser-Busch distributors from another territory. Moreover, Clare Rose had to absorb the cost of redeeming the empties sold into its market by the upstate Anheuser-Busch wholesalers. The New York State Beer Wholesalers Association failed to address the unfairness of the situation, prompting Clare Rose to withdraw from the organization, which it believed was in the pocket of upstate wholesalers and acting against Clare Rose's interest.

In 1987 Clare Rose also faced new competition in the form of Coors Distributing Company of New York, which now entered the Long Island market. What made the new operation so much of a challenge was that Coors granted it a 14-county territory. This arrangement freed the distributor from the problem of upstate wholesalers shipping in cheaper product. In addition, Coors Distributing Company of New York was able to handle both distribution and deposits for the entire New York metropolitan region from a single location.

Although the Coors operation succeeded in taking a major share of the market in most territories, it did not succeed as well on Long Island. It hindered Clare Rose's growth somewhat but did not take away sales. One factor in Clare Rose's ability to maintain its market share was its knack for building brands. The promotion of Busch products was a notable success in the late 1980s. The brand was poorly positioned in the marketplace, hardly a premium beer yet not able to compete with the less-expensive brands such as Schmidt's and Meister Brau. Clare Rose cut prices, but the resulting growth in sales more than made up for the sacrifice in margin. All told, sales of Busch increased by 66 percent, including a whopping 212 percent in convenience stores.

TERRITORIAL EXPANSION

During the 1990s Clare Rose expanded its territory. In August 1991 it moved closer to New York City, becoming the official Anheuser-Busch wholesaler for Nassau County. Two years later, in May 1993, Clare Rose entered the city itself by acquiring the Staten Island territory for Anheuser-Busch products. The company also expanded beyond Anheuser-Busch products in the 1990s, adding Amstel, Beck's, and Heineken, as well as distributing Boardy Barn Brew to supermarkets. As a result, by 2000 revenues grew to about $110 million, a total that made Clare Rose one of Long Island's largest private companies. But the pace of the company's growth only accelerated over the next few years. In 2002 Clare Rose reached the $150 million mark in annual sales, and a year later reached $178 million.

By now a third generation of the Rose family was working full time at the wholesaler. Cousins Lisa Rose (daughter of Ric) and Sean Rose (son of Mark) both took positions at the company and worked their way up to positions of responsibility. According to Lisa Rose, there was no pressure to enter the family business. In fact, she majored in political science in college and thought about becoming a career foreign service officer. Her cousin took a more conventional route to a business career. After graduating from Siena College, Sean Rose earned a master's degree in management from Webster University in London. He would become general manager of Clare Rose.

NEW FACILITIES

Growth continued during the second half of the decade when, in late 2005, Clare Rose announced plans to build a new distribution center and corporate office facility in East Yaphank on Long Island. The new quarters would provide much-needed additional space, as the company had outgrown its facility in Patchogue. By this time Clare Rose served a territory spanning 2,100 square miles from its two facilities in Melville and Patchogue and a fleet that included 70 route vehicles and 8 long-haul vehicles. In 2008 the company's sales reached $204 million, up from $173 million in 2007.

By late 2008 development of Clare Rose's new $45 million, 269,563-square-foot distribution center and corporate office was slated to begin on a 20-acre site in Suffolk County. The company awarded the design-build contract to Gray Construction, based in Lexington, Kentucky, to the disappointment of local construction firms on Long Island that had also bid on the project. As the project began in 2009, Clare Rose contended with approximately 400 demonstrators protesting the use of nonunion, out-of-state workers in the construction of the facility. In a Newsday article by Gary Dymski, Sean Rose claimed that some union workers would be on the job but using all-union labor would have increased the company's construction costs by 42.6 percent. That year, Clare Rose was recognized as the nation's leading wholesaler of Heineken, resulting in a Red Star Award from the brewer.

As 2010 began, Clare Rose was shipping approximately 11 million cases of beer annually on the strength of 300 employees. The company remained the leading supplier of Heineken and Anheuser-Busch products on Long Island. In 2010 the company mourned the death of founder Clare F. Rose, who died in July at the age of 98. The former leader had continued to work in the company's warehouse until he lost his eyesight at the age of 90.

Clare Rose's new distribution center opened its doors in 2010 and received Silver LEED certification in 2011. Environmentally friendly features included low-flow and waterless plumbing and on-site wastewater processing. That year, Clare Rose celebrated its 75th anniversary.

EXPANSION OF DISTRIBUTION

In 2012 Clare Rose expanded its distribution to include selections from Pabst Brewing Co., including Pabst Blue Ribbon, Schaefer, Colt 45, Schlitz, Stroh's, and McSorley's. The company began distributing products from the Michigan-based Dark Horse Brewing Co. in 2013, as well as craft beers from both the Colorado-based Fort Collins Brewery and Adirondack Brewery of Lake George, New York, and Lucky Dog Vodka. Products from two New York microbreweries, SingleCut Beersmiths, based in Astoria, and Greenport Harbor Brewing Company in Greenport, were added in 2014. On the sustainability front, Clare Rose installed a rooftop solar photovoltaic system at its facility in East Yaphank in 2015.

Clare Rose found itself in the middle of an entanglement with its union workers in 2017. After proposing the replacement of pensions for drivers with a 401(k) plan and announcing a 30 percent wage cut, about 130 members of the Teamsters Local 812 went on strike in April. After 82 days, the strike ended when the company reached a new agreement with its union workers, agreeing to preserve pensions and maintain higher wages under a new sales model.

Clare Rose's distribution expanded to include hard ciders in 2017. That year, the company began offering products from Riverhead Ciderhouse. In 2018 Clare Rose remained one of the nation's leading beverage distributors. Under a third generation of family leadership, it appeared that the company would continue to maintain this position for the foreseeable future.

Ed Dinger
Updated, Paul R. Greenland

PRINCIPAL COMPETITORS

Empire Merchants, LLC; Manhattan Beer Distributors, LLC; Phoenix Beverages, Inc.

FURTHER READING

“Busch League.” Long Island Business News, October 27, 2000.

“By Any Other Name, Tastes Just as Sweet.” Long Island Business News, October 17, 2014.

Dymski, Gary. “Beer Distributor Protest Snarls Melville Traffic.” Newsday, August 19, 2009.

Galvin, Andrew. “Weathering the Storm.” Beverage World, February 1989, 33.

Jones, Kathryn. “Business Blossoms: Clare Rose Inc. Attributes Its Success to Faithful Employees, Long-Term Relationships and a Strong Connection to the Local Community.” Food and Drink, Winter–Spring 2010.

Schachter, Ken. “Many of LI's Successful Ventures Are Family Businesses.” Long Island Business News, November 5, 2004.

Whittle, Patrick. “Clare Rose, Beverage Distributor, Philanthropist, Dead at 98.” Newsday, July 28, 2010.

Winzelberg, David. “New Contract Ends Strike at Clare Rose.” Long Island Business News, July 17, 2017.