With a central facility in Winnipeg, Manitoba, and five branch locations throughout northern Saskatchewan, northwestern Ontario and remote Nunavut, Arctic Beverages has been serving Canada’s northernmost grocery, convenience, gas station and drug store retailers for 24 years. In-depth knowledge of this dispersed market and local distribution infrastructure has helped Arctic Beverages capture major market share as one of the largest and most successful PepsiCo and Frito-Lay distributors in the region.
“Our customers range from northern Manitoba to portions of Saskatchewan, northwest Ontario and all over Nunavut – we’ve captured about 21 percent of Canada’s distribution territory,” says Sean Post, CEO of Arctic Beverages. In order to maintain leading service to such an expanse of customers, Arctic Beverages has developed expertise in all forms of transportation – be it land, sea, air or rail.
The company is the product of a long history with PepsiCo. “We’re actually the fourth oldest and fourth largest Pepsi bottling company in the country,” notes Post. “Arctic Beverages started originally as a Pepsi bottling franchise in the late 1930s.”
An ever-expanding product line
In 1991, Arctic Beverages became the first and only First Nations-owned and -operated Pepsi bottler in the world. “We’re still proud to market and distribute many well-known Pepsi brands: Pepsi, Dr. Pepper, 7-up Brisk, Schweppes, Crush, Mountain Dew, Mug, Lipton, Gatorade, Dole, Ocean Spray, Rockstar, Amp, Sobe and Starbucks Double Shots, to name a few,” says Post.
Arctic Beverages’ success began to accelerate when Pepsi acquired other product lines within the PepsiCo Foods umbrella. Shortly thereafter, the company became a distributor of Frito-Lay and Quaker products. “Over the years we have steadily diversified from the initial bottling to a range of salty snacks under the popular Frito-Lay brand,” says Glenn Stefanko, general sales manager of Arctic Beverages.
Arctic Beverages’ Frito-Lay products include: Lays, Doritos, Ruffles, Tostitos, Cheetos, Cracker Jacks, Spitz, Quaker, Munchies, Smartfood Popcorn, Twistos, Hickory Sticks, Ruffles dips and salsa, Matador and Rold Gold pretzels.
In 2011, Arctic Beverages took on a range of Jack Link’s products including jerky, beef sticks and jerky nuggets and the company also launched a partnership with Nestlé. The Nestlé line includes Oreos, Drumsticks and Haagen Dazs ice cream, Skinny Cow ice cream, Del Monte fruit bars and range of well-known candy aisle favorites: Lifesavers, Rolo, Kit Kat, Crunch, Smarties and more.
“Since 2007, we’ve really diversified in terms of the products we distribute,” says Stefanko. “We have also started a distribution agreement with Canada Bread, including the Dempster’s, McGavin’s and Smart brands and a dairy agreement with Parmalat.”
With more than 120 years in the Canadian dairy industry, Parmalat is a trusted name in high-quality milk and dairy products, as well as fruit juices, cultured products, cheese and table spreads. The Parmalat name represents respected brands such as Beatrice, Lactania, Astro, and Black Diamond, all of which Arctic Beverages now distributes.
“Not many competitors have the same breadth of products,” compares Stefanko. “Our competition doesn’t run routes as frequently as we do because we carry more lines and fresh items that need to be distributed several times a week.”
Understanding remote logistics
Arctic Beverages covers extensive territory, but the company has running efficient routes down to a science. “Our main consolidation center is in Winnipeg, where we bring in product and organize all of it to go out to our distribution branches,” explains Harold Bonazew, general manager of Arctic Beverages. “We have 85 employees working throughout these branches and our logistics department.”
“Everywhere we operate, its many miles to get product to the customer; that’s why understanding the specific distribution logistics of this northern market is very important,” continues Bonazew. When it comes to really remote areas, such as the wilderness of Nunavut, where there are few accessible roadways, Arctic Beverages utilizes third-party distribution.
“Some products we may have to fly in and, especially in Nunavut, we take advantage of barging product by boat to get containers to the customer,” says Bonazew. But no matter the method – Peterbuilt truck, train, plane or boat – Arctic Beverages ensures its retail customers receive what they need in the timeliest fashion possible.
As the company adds more perishable items such as milk and dairy to its ever-expanding product line, ensuring the product arrives on time and as fresh as possible is even more pertinent. Arctic Beverages is ramping up its storage capacity and multi-temperature controlled transportation.
“Right now, everything is temperature controlled, but instead of just one zone, we’ll have three for dry, cool and frozen in all of our delivery equipment,” explains Post. “We’re also in the process of upgrading freezers and coolers at our warehouses so we can hold short-shelf life items, even produce eventually. We’re not looking to become a broad line distributor, but there are some lines that we can add that make sense.”
Post says Arctic Beverages is always on the lookout for complementary product lines and those that match changing consumer preferences. “The demographics of the market are changing and consumption patterns are changing,” he notes. “People are looking for small portions and healthier beverages and snacks. We’re looking to bring on healthier options that allow for good choices to be made by our customers.”
Innovation is always a good thing, Post stresses. “Within our large portfolio, a little innovation creates a lot of excitement at the store level,” he says.
Giving back to local communities
Arctic Beverages strongly believes in giving back to the communities it serves and the company has partnered with the OnexOne Charity to increase nutrition, food literacy and scholastic success to First Nation Communities in Northern Canada where food insecurity is extremely high. Arctic Beverages participates with national companies in providing products to support elementary-level breakfast programs and offers free freighting for Central and Northern Canada.
“Through OnexOne, we supply healthy breakfast items to nine communities and the program is growing and we’re hoping to expand into more communities,” says Stefanko. “This year, our total contribution was more than $100,000.”
Arctic Beverages supplies a range of breakfast beverages such as 100 percent apple and orange juice, as well as Quaker oatmeal and granola bars. “We supply, healthy, wholesome food these students really need, targeting the preschool and elementary level,” adds Stefanko.
Outside of this program, Arctic Beverages is also an active participant in supporting and sponsoring local junior hockey leagues and other youth organizations. “We support the communities we deal in with any range of sponsorship and donations,” says Bonazew.
Room to grow
With close community connections and the right team in place, Arctic Beverages is well positioned for future growth. Post, who has been in the distribution business since 1995, started with Arctic Beverages and parted ways with the company for about a decade. “I got my feet wet by doing some chain restaurant distribution and then, when Arctic Beverages was purchased by a new group, I was asked to come back and help run the company,” he recounts.
He’s been doing so ever since, and he says the opportunities at hand are exciting for Arctic Beverages. “My biggest concerns are rolling out innovations quickly and keeping up with technology – in storage and the internal selling system we need to handle the changes in the industry,” he says. “There’s a lot of opportunity here for growth and that’s really exciting. PepsiCo and Frito-Lay remain core brands, but we can augment more brands to better serve customers.”
In northern Canada, Post also says the economy is more stable than other regions. “Our economy is more resourced based in timber and mining, making it less volatile than the Alberta oil economy,” he says. “We see fewer highs and lows; it’s steady here.”
Even with steady growth and a stable economy, Post says there is always room for improvement. “We’re constantly getting feedback from customers on service from delivery to vending division repairs— there’s always a way to improve service and that’s what keeps us on top in this market,” he elaborates.
With more than 20 percent of northern Canada under its distribution reach, Arctic Beverages maintains a substantial market share and looks forward to continued growth in both products and territories.