Beer & Logistics: A Case Study with Stone Brewing

For the past 26 years, Stone Brewing has delighted the bellies of craft beer enthusiasts with their array of super-hoppy IPAs and delicious lagers. As one of the largest in the United States, Stone has done their part to help commercialize the craft beer industry—and due to their success, you can find their iconic gargoyle logo in grocery stores, restaurants, and bars throughout the country. Each year, Stone transports thousands of truckloads of beer, hops, barley, glass, and boxes to support their production facilities in Escondido, California, and Richmond, Virginia. Since 2019, 100 percent of Stone’s outbound shipments—nearly 3,000 truckloads a year—have been built, organized, routed, and hauled by Zengistics.

Case studies in the logistics industry often follow the same basic storyline: The shipper had problems with their service until this new company provided all the solutions.

However, what led to this strategic partnership between Stone and Zengistics tells an unusual, overarching narrative about collaboration in the supply chain. Rarely are there examples where both the shipper and third-party logistics firm (3PL) evolved their entire business models and scale of operations as a result of their partnership. From moving just a few loads to now controlling 100 percent of the outbound business, this case study of Stone and Zengistics shows how a collaborative approach to business partnerships in logistics can provide a blueprint for mutual success.

Logistics Model at Stone, Before Zengistics

In 2015, Stone Brewery’s logistics model wasn’t really a strategy at all. A full 100 percent of their freight was hauled by a single asset-based carrier. Stone’s logistics team built their own loads and would call the carrier to check for available capacity a few days before they needed a load picked up. Sometimes, trucks didn’t show up—or, when they did, they were 10 to 12 hours late. Detention costs were piling up, the truck-fill rates were 60 to 70 percent full, and, on top of all that, the routes were not optimized for efficiency. Like most shippers, Stone thought they’d be saving money by going with an asset-based carrier, but that wasn’t the case.

The second model they implemented was to use multiple 3PLs to manage the transportation: one provider for the East Coast, one for the West Coast, and one for transferring freight between facilities. However, this model also had its limitations. Stone’s experience working with larger brokers was that their freight—craft beer—just wasn’t a high priority for those brokers. They continued to see the same results of poor route optimization and trucks loaded with low fill rates. Furthermore, when service and execution fell short of expectations, brokers didn’t return calls. The trust in the relationship fell apart.

After burning through multiple brokerages, Stone’s logistics managers attempted to simplify things by just working with a single 3PL. To help streamline their operations, Stone looked for a transportation provider that also did load-building and provided a customizable portal that could provide visibility on their shipments. There were many organizations who promised the moon and the stars, but they lacked results and lagged behind in putting the software together.

Focus on Your Craft

Long before Stone gave Zengistics a look, the logistics firm already had built a formidable reputation for as one of the leading service providers within the niche beer, alcohol, and brewery distribution market. In fact, “Focus on Your Craft” was their slogan and branding when approaching potential customers.

The relationship between Stone and Zengistics started with moving a few practice loads. The strategy early on was focusing on execution and communication, and on being able to service the loads effectively. Zengistics offered competitive pricing and great service that shippers everywhere have come to expect, but then the conversation shifted to forward thinking. The differentiator separating Zengistics from another large broker came in the form of a question: “How can Zengistics start to make an actual impact on Stone’s business?”

How a Collaborative Approach Transformed Both Businesses

Through meetings and conversations, Zengistics set out a plan to build a customizable digital platform built specifically around Stone’s transportation needs.

“When we started, Stone Brewery said, ‘Here’s a list of the 20 things we need,’ and we responded with, ‘Okay, we have no idea how to do 18 of those things, but we’re going to build a team around this,” says Matt Zimmer, president at Zengistics. “And that’s what we did.”

Zengistics implemented a strategy specifically designed to help streamline efficiencies throughout Stone’s entire supply chain. They started on the planning side of each load.

Zengistics requested Stone’s master production schedule and handled the rest of the process. They built each load, planned the pickup, packed each truck, created an optimized routing guide, and procured trucks to deliver the loads on time. The result was a 98 percent average fill rate on each truck and 98 percent on-time delivery.

Using the data archived and provided on the Zengistics digital platform, Stone now has the ability to make decisions on where they should actually produce their beer. Using customizable reports specifically for Stone, the brewery can determine whether it’s more profitable to batch in Escondido or Richmond.

“We are constantly making decisions on where we want to produce beer based on freight pricing from Zengistics,” says Clint Graflund, Stone’s vice president of logistics and distribution. “Zengistics is like an extension of Stone, as opposed just some company. Stone has been around for more than 25 years, but only within the last couple of years have we actually had a freight company that was part of the decision-making process.”

The data provided on the Zengistics portal also allow Stone to look at cost per case equivalent (CE) by state and by distributor. Using the technology, they can gain full visibility on the pricing they are paying, down to a single case of beer.

“Zengistics has really helped us reduce our miles, fill our trucks, and make recommendations on how to schedule with our order partners,” Graflund says. “There’s a portal for tracking, a separate customizable portal that allows them to scrape every imaginable piece of data on every shipment, every case, every distributor, everything.”

For Zengistics, the successful collaboration with Stone became the standard blueprint on how to approach future customers, particularly in the craft beer and beverage industries. By using a consultative approach backed with data-driven technology, Zengistics developed a strategy from the ground up, built specifically to the needs of their customers.

“They’re innovators,” Graflund says, when asked what he thinks about Zengistics. “They understand the needs as the markets are changing. They understand the need for data to implement change. They built our own database that’s very Stone-specific about the way we like to look at how we pay for freight. But on top of that, they are just a good group of people to work with.”

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