Doug Hertz – trying not to cry over 60 million ounces of spilt beer
By Maria Saporta
The first half of April should have been a nirvana of sports and entertainment in Georgia.
The Final Four was to be played at the Mercedes Benz Stadium from April 4 to 6. The Masters Tournament was scheduled to take place in Augusta from April 9 to April 12. And the Atlanta Braves were supposed to host their opening homestand of the 2020 season – six consecutive home games at Truist Park starting April 3.
Instead, that world ended abruptly with the cancelations and postponements of all those events – and life as we knew it – due to the spread of the coronavirus.
Few people understand the repercussions of that disruption more than Doug Hertz, chairman and CEO of United Distributors, the largest alcohol wholesaler in Georgia.
His company already had filled countless orders for restaurants, hotels and sports venues that were stocking up on beer, wine and liquor – anticipating the thousands of people who would be in town to party and enjoy the festivities.
“Beer goes bad,” Hertz said during a couple of telephone interviews over the past two weeks. The shelf-life of draft beer is between 30 and 45 days. Now that the economy is beginning to reopen, customers have been calling United to “come and pick up the bad beer.”
Hertz has calculated the damage.
“Numbers are more astounding than I thought – unfortunately,” Hertz wrote in a follow-up email. “We may have to pick up/destroy 42,500 kegs at a cost to our customers of nearly $5 million and dumping 60 million ounces of beer!!! That will make a lot of people sad!!”
About 22 percent of United Distributors’ business in Atlanta is restaurants, hotels, sports venues and airport establishments. That business literally dried up overnight.
“It’s a huge hit,” Hertz said. “On top of that, not only do we have to issue refunds, we have to ship it and dump it at a place where it can be properly disposed of (according Environmental Protection Agency protocols).”
Hertz estimated that the company is having to pick up bad beer from “hundreds” of accounts. Not only that, all the kegs of beer that sat in its warehouse for future deliveries also is having to be dumped.
United is the distributor for Miller Lite, Coors Lite, Sweetwater, Stella among others. There are other Georgia beer distributors that also have been impacted. Atlanta Beverage Co. distributes Anheuser Busch brands as well as other beers; and General Wholesale Co. distributes Corona brands and other beers.
Hertz, however, is not one to dwell on the negatives.
“We are lucky we have grocery stores, liquor stores and convenience stores,” said Hertz, who has seen sales increase as more people have been imbibing at home. “That’s 78 percent of our business. We are having to rely on the growth of those markets to overcome the loss of hotels, restaurants, venues and the airport.”
Still, Hertz expects a “big financial hit” as a result of the coronavirus pandemic. So far, only 15 to 20 percent of the establishments have reopened, and most have scaled back their operations for safety reasons.
“I think there will be a huge number of casualties,” Hertz said. “We will see a significant part of our customer base that will make the decision not to reopen anytime soon.”
So far, United has not furloughed any of its 1,500 Georgia employees.
“We made the decision that we were going to continue to pay people through May,” he said. “We are hoping that accounts would start to open back up by June 1.”
When asked about the emotional toll on him, Hertz said he’s more worried about his associates – that they’re safe. He has been focused on lowering their anxieties by providing health resources and making sure they have safe working environments.
Among the precautions they’ve taken include: masks, gloves, hand-sanitizers, temperature checks and social distancing. They also are making sure their truck drivers are driving the same trucks day after day to minimize the risks of infection.
If someone is feeling symptomatic, they get sent home. So far, Hertz estimates they’ve had fewer than 20 cases among its employees in Georgia and Alabama, where it has 250 associates.
“We are down to only three people being out of work as of last Friday because of the virus,” Hertz said. “But we are being just as diligent as ever because we don’t want that number to go up.”
Meanwhile, the company has supported “Feed the Frontline” – an initiative to provide healthcare workers with meals prepared by restaurant workers and caterers. That has been a way to help United’s customers. The Hertz family also has made contributions to the Atlanta Community Food Bank and Meals on Wheels.
Hertz also stepped back in to chair the board of the Woodruff Arts Center as it tries to maneuver its operations through the pandemic. He continues to remain involved with Camp Twin Lakes, which is facing its own issues of not being able to have overnight camps.
Overall, Hertz is grateful that his wife, Lila, and other family members are healthy and secure.
And he is not crying over spilt beer.
“Everybody wanted the Masters to take place. Everybody wanted the Final Four to take place. Everybody wants conventions,” Hertz said. “It does challenge our patience, and it will challenge us financially. It will be different. We will have to be creative and innovative. But the American spirit is strong. We will come through this.”