Buffalo Rock making progress with $300 million expansion, CEO tells Hoover chamber

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Buffalo Rock Co. hopes to complete new office and distribution centers in Birmingham and Huntsville by this summer, the company’s new CEO told the Hoover Area Chamber of Commerce Thursday.

A new $75 million office and warehouse space covering more than 1 million square feet on almost 700 acres off Lakeshore Parkway in Birmingham should be finished in April, while a new 200,000-square-foot sales and distribution facility on 55 acres in Huntsville should be finished in July, CEO Matthew Dent told the Hoover chamber crowd at the Inverness Country Club.

The two projects are part of a $300 million infrastructure investment the company announced in 2020 that is bringing online more than 2 million square feet of new space and new technology, Dent said.

A key element of the investment is a $25 million high-speed automated pick system that can handle up to 2,000 stock-keeping units, or SKUs, which represent different kinds of beverages, he said.

In the late 1990s, Buffalo Rock handled just more than 200 SKUs, Dent said. A decade later that number had risen to 500 or so, and now the company has more than 1,000 SKUs and is working its way to 2,000, he said.

“The breadth of our portfolio keeps widening, and the reason is all of you keep changing what you want,” Dent said. “The portfolio has really exploded.”

Buffalo Rock got its start in Birmingham in 1901 as an outgrowth of the Alabama Grocery Co. started by Sidney Lee in the late 1800s, Dent said. Lee and Selma chemist Ashby Coleman developed Buffalo Rock Ginger Ale, and by 1927, the drink had become so popular that it became the sole product of the renamed company.

In 1951, under the leadership of Lee’s grandson, James Lee Jr., Buffalo Rock bought the Birmingham Pepsi-Cola franchise and in 1962 became the first bottler in America to own a Dr. Pepper franchise, Dent said. In 1971, the company added 7UP and became the first bottler to have three national brands under one roof, he said.

“All that history in the beverage industry has been right here in Birmingham,” Dent said. “Part of our culture has been innovation — pioneering kind of a new path in the industry.”

The company last year celebrated its 120th anniversary and 70th year as a Pepsi bottler and this year celebrates its 60th year as a Dr. Pepper bottler. Today, the company has 14 franchise sales and distribution teams with 2,300 employees covering a territory that has more than 6.5 million people in Alabama, Florida and Georgia.

It has become one of the largest single-family privately owned Pepsi-Cola bottlers in the nation and is the only bottler in the world that Pepsi-Cola allows to carry competing brands on the same truck, Dent said.

That means the company’s trucks can carry both Sunkist and Crush and various brands of ginger ale, he said. Because of that, Buffalo Rock is the No. 1 distributor of ginger ale, tea, cappuccino and isotonic sports drinks such as Gatorade, he said.

“We’re going to keep broadening our portfolio and grabbing more share of the market,” he said. “Our customers are trying to provide you with the choices you want, and that’s who we want to be.”

Buffalo Rock serves almost 18,200 customers on a daily basis, he said.

The company has four main divisions: PepsiCo (which sells all the PepsiCo brands and amounts to more than half of Buffalo Rock’s sales), Keurig/Dr. Pepper, coffee and tea (Red Diamond), and a vending business that serves more than 10,000 vending machines, Dent said. Mountain Dew is Buffalo Rock’s top brand among the PepsiCo brands, outselling Pepsi itself, he said.

One thing that sets Buffalo Rock apart is that it has its own manufacturing facility, Dent said. The company’s plant in Homewood fills roughly 1 billion containers a year, about half bottles and half cans, he said. That facility can produce 1,200 cans per minute and 700 to 800 bottles per minute, he said.

The business is built around continual movement, he said. They keep only about seven to 10 days worth of inventory on hand and have employees constantly restocking shelves, Dent said.

“We have some employees that stay in Walmart, and that’s what they do all day — they go around the store in a circle and replenish everything that’s being pulled off the shelves,” he said. “It’s a very high-turn business.”

Dent, who serves as chairman of the American Beverage Association, said Buffalo Rock also has taken on the challenge of helping address the impact of beverages on people’s health.

Today, about 58 to 60% of the beverages the company sells are either zero-sugar or low-sugar beverages, he said. “That was not the case in the late ‘90s,” he said.

Buffalo Rock has partnered with Coca-Cola United as one of five test markets in the United States to try to reduce caloric intake in three of the least healthy areas in Alabama, Dent said.

“The results are staggering,” he said. “Nationally, we have a goal to reduce calories by 20% by 2025, and we’re on track to do it, and we’re exceeding that track in the state of Alabama. We’re trying to be part of the solution. It’s something we’re really proud of.”