Keeping Up Spirits: Sue McCollum's Battle to Save Major Brands
Sue McCollum’s husband died and left her in charge. Now she’s fighting to save not only the family business, but also the 21st Amendment.
Photography by Kevin A. Roberts
It’s time to step forward, Sue McCollum tells herself. You can’t stay in the background anymore. She looks around the big meeting room and sees familiar faces. These people care about Todd as much as you do. They’re sad, and they’re scared.
She glances over at her husband, Todd Epsten. The new medicine is cutting off the brain tumor’s blood supply, buying him time. Fatigue washes over him several times a day, like a tide—but not here. His eyes are bright. He’s in his element.
His element, not hers.
She goes to the microphone. She starts with what comes easiest to her: warm thanks. She tells everyone that she knows and appreciates just how much they do for Major Brands, the company that Epsten’s grandfather founded in 1934. She says, without tears or fuss, “This is a difficult time.”
Epsten had his first seizure on a business trip in the fall of 2010—just five weeks after McCollum, at 49, started law school. He had been so proud of her decision, hadn’t once mentioned how busy their lives were, with two teenage sons and a slew of civic commitments.
When they got the diagnosis, they thought they could beat it. Either way, McCollum knew she couldn’t quit—not with two teenage sons watching every move.
“We don’t get over things; we get through them,” she told Michael and Brian. “Your father has cancer, but we are going to keep getting up every morning and putting on our coats. We’re going to go to school, and I’m going to continue to work, and you’re going to take your SATs, and life will continue.”
Two surgeries and rounds of chemo later, the hope that still lights her face has more to do with love than realistic possibility. They know Todd’s dying. And he’s made it clear that he wants her to run his family’s business, keep it from getting swallowed up by a huge corporation, look after its 700 employees.
She takes a deep breath and begins to speak about her husband, saying relationships are what matter to him—and to her, too. “This is a family business,” she says, “and you are the family.”
She’s about to become the only woman in the country to own and run a wholesale liquor distributor with revenue of over $550 million.
And one of the nation’s biggest wholesalers is eyeing its territory.
McCollum and Epsten met in a business law class at American University. She thought he was funny—self-deprecating, a little sarcastic. His tenderness caught her off guard. “Don’t take the bus!” he’d say, coming to pick her up when she worked late at Häagen-Dazs.
“We couldn’t have been more different,” she says. “He was 5-foot-7; I was 5-foot-10. He was Jewish; I was Irish Catholic. He was from Kansas City, Mo.; I was from Buffalo, N.Y. His dad had a thriving business; my dad was smart—the only kid in his family to go to college.”
So what formed the bond? “For Todd, I think I was just so real. And true.” She stops. “I’m sorry. This part’s hard.” She waits a few seconds. “For me, he was so open. He didn’t—Todd did not in any way discriminate. It didn’t matter who you were or where you were from. That genuine liking of people, that eagerness to please them, was very endearing.”
After they graduated, McCollum produced sports-radio programs in D.C. and got an MBA. In 1987, she and Epsten married, and she moved to Kansas City. She worked in public relations. “Combat Roach Control,” she says brightly, “which is the best roach control. And Breck hair products.” Epsten was
directing marketing for the family business.
The following year, the company expanded, and McCollum and Epsten moved to St. Louis. Epsten found Major Brands an old warehouse on Southwest Avenue, at the city’s edge. He liked cities, liked figuring them out. They bought a house in the Central West End, and they worked and volunteered their way into the heart of their adopted city.
Epsten wound up head of the city Board of Police Commissioners, chairman of Forest Park Forever and Big Brothers Big Sisters of Eastern Missouri, vice chairman of the Regional Business Council. McCollum directed recruitment for Gov. Jay Nixon’s transition team, taught marketing at Webster University, chaired the boards of the Missouri Film Commission and New City School, vice-chaired the Zoo Commission. Those are snippets; their civic commitments go on for pages. They wanted to teach their sons to be “people of character.”
“When I grew up in Buffalo,” McCollum says, “if the guy ahead of you gets stuck in the snow, you get out and help push him. It’s just what you do.”
A quarter-mile long and only 200 feet wide, Major Brands’ warehouse isn’t ideal—but it has a great history. It was the Gateway Army Ammunition Plant during World War II. Until Major Brands’ 2004 renovation, “everything was done on paper,” says Patrick Quinn, chief operating officer. “Two gentlemen would sit at old teachers’ desks with foot pedals.” Now the place is computerized, and it can bring 20 trucks through per day.
Forklifts glide by as we walk, beeping urgently whenever they round a corner. Up high, with two cameras trained on the case, is the single-malt Scotch that sells for $5,000. Another high shelf holds Armand de Brignac Champagne, hip-hop’s Dom Pérignon. Quinn leads the way down a long, long aisle, past cases of FishEye and Smoking Loon wine, New Belgium Brewing’s Lips of Faith Super Cru, Red Bull energy drink (their highest-volume seller), Tullamore Dew Irish whiskey. Major Brands sells eight of the top 10 premium alcohol brands; it also sells local wines from small Missouri wineries, the Genesee beer McCollum remembers from Buffalo, and Fizzy Izzy root beer, made by a buffalo rancher in Ste. Genevieve.
On-premises sales director Doug Nixon even plays mixologist, devising recipes like the Tiger’s Paw for the Saint Louis Zoo’s Zootini, and a whole menu of cocktails for BlackFinn American Grille at the Saint Louis Galleria, including the Stan the MANhattan and The Dogtown Big Ginger.
The current market trend is sweet nostalgia; McCollum’s quite taken with the Three Olives brand’s Loopy vodka. “Didja like Froot Loops? Add milk and it’s like drinking the bottom of your cereal bowl.”
I admit to an unnatural hatred of Froot Loops.
“What about Cinnamon Toast Crunch?” Quinn asks, pointing out RumChata, a liqueur made with real cream. It’s next to the Dutch ChocoVine, which functions like Fifty Shades of Grey for women of a certain age. I shudder and look toward the exquisitely gruesome skull-shaped bottles of Dan Aykroyd’s Crystal Head vodka. “He’s really into ghosts,” McCollum offers. “He comes to town all the time, by bus.”
We step into the Cold Beer Room, kept at a frosty 38 degrees and lined with unpasteurized craft brews. Schlafly’s been stocked here 20 years; when its sales volume was more of a trickle than a chug, Major Brands shared its knowledge of the market and helped strategize.
It’s the Friday before Thanksgiving. Major Brands’ attorney and top executives are already seated around the conference table in the Scotch Room when McCollum walks in. They ease into the morning’s meeting with banter about her Buffalo Bills, who won their Sunday game.
The segue comes naturally, not as one of those forced “OK, let’s get started” moments that drain away all humor. But the meeting’s topic couldn’t be more serious. Southern Wine & Spirits of America, a national wholesaler that’s already operating in about 35 states, wants into Missouri—without meeting Missouri’s residency requirement. State law says Southern Wine & Spirits of Missouri (the name’s already registered) would have to be 60 percent owned by Missouri residents; its owners and directors would have to have lived here for three years; and they’d have to vote and pay taxes here.
“Southern doesn’t want to play by Missouri’s rules,” says attorney John Riffle, chairman of the corporate department of Lewis, Rice & Fingersh. “So it has challenged our residency law on U.S. constitutional grounds.”
Southern’s argument is that Missouri is being protectionist without sufficient justification—and thereby violating both the Commerce Clause that lets the federal government regulate interstate commerce and the Equal Protection Clause that prevents states from discriminating.
“The question, in a nutshell, is whether Missouri’s residency requirements are protected by the 21st Amendment, which gives states the right to regulate the distribution and sale of alcohol,” Riffle tells them.
Last year, U.S. District Judge Nanette Laughrey found in Missouri’s favor, citing a prior court decision that found the 21st Amendment should have “virtually complete control over whether to permit importation or sale of liquor and how to structure the liquor distribution system.” She also pronounced it perfectly rational to assume that a residency requirement would “promote greater accountability and responsibility on the part of the wholesaler towards the community.”
Now Southern is appealing that decision. And it’s already succeeded in overturning residency requirements in both Texas
Major Brands’ position—and the state of Missouri’s—is that when it comes to alcohol, more matters than interstate commerce. Officers and directors who live here have a vested interest in preventing the social consequences of intemperance.
“If we’re not following the rules, I’m likely to hear about it at the grocery store,” McCollum says. “And I’ve got kids—I want alcohol regulations followed for all sorts of reasons, from keeping drunk drivers off the roads to reducing underage drinking.”
They talk for a minute about an upcoming promotion of ScooterGuy, a Missouri business Major Brands helped shore up. People drink and drive because they don’t want the hassle—and the stigma—of retrieving their car the next morning. ScooterGuy just tosses a scooter in the trunk and drives them home in their own car.
It’s this kind of thing that McCollum’s not convinced a national corporation would bother supporting. Sure, Southern gives scholarships and high-profile disaster relief. But Major Brands—and McCollum, giving in the company’s name—supports the Missouri National Guard, Big Brothers Big Sisters, the St. Louis Symphony, Forest Park Forever, St. Patrick Center, the zoo, and nearly 500 other organizations.
National wholesalers “would like to be able to come into any state they want to go into,” McCollum says. “They want residency requirements to go by the wayside. And the regs in general haven’t been standing up, because the courts have been giving a lot of deference to the business environment. It’s the states that are at the competitive disadvantage.”
Major Brands president Barry O’Neil says that if the megawholesalers prevail, small suppliers will be at a disadvantage, too. “We have 150 suppliers representing less than 3 percent of our business. Almost 100 of those suppliers are each less than one-tenth of 1 percent of our total sales.”
Riffle nods. “The mega–outstate wholesaler isn’t going to make room on their trucks for a small winery.” He sets down his notes and gives them a tense chronology: “Southern has already filed its appellate brief. The attorney general’s brief is due November 30. Interested parties—including the Missouri Wine and Spirits Association, of which Major Brands is a member—are filing amicus briefs. Oral arguments will probably be heard in spring 2013, and we should have a decision by summer.”
As everyone leaves, Quinn grabs one of the chocolate-chip muffins that McCollum brought. She’s been addicted to chocolate since the days when her sister made hot fudge sauce after school and hid it from her—under the sofa. At 16, McCollum got a job at Friendly’s ice-cream shop and started adding its hot fudge sauce, plus sprinkles, to the Fribble shake. She was named Employee of the Year for her district.
She’s always understood what makes people happy. Now she has to learn how to fight.
This fall, when McCollum needed to write a research paper for a constitutional-law independent study, she dove into the history of alcohol in the U.S. (“It’s how we decided we were going to seek our independence—in the taverns!” she says with delight) and started to see a bigger picture.
What other substance could have inspired not one, but two amendments to the Constitution?
“Alcohol’s role is linked with good food, good times, important occasions,” McCollum says. “But it’s bigger than that. It’s always been an inherent part of community-building. Today, we tend to look at alcohol as just a consumer product; historically, it was seen as something different. And it’s always been regulated.”
First, the regulation was shame: Ministers preached hellfire at drunkards, and polite society averted its gaze. Then came the temperance movement, because liquor was flowing so freely that men were escaping to saloons every evening to bask in whiskey’s camaraderie and drink up the family grocery money. But the nation’s first experiment in imposing police power on its citizens only rankled them—and encouraged bootleggers. So the 21st Amendment gave states full power to regulate alcohol as they saw fit.
For the amendment’s first 30 years, states reigned supreme. They could ban alcohol, take over its distribution themselves, or drop a net of rules over anyone looking to make a fast profit by encouraging intemperance.
In recent years, though, states have been losing the battle. The nation’s courts have steadily deferred to corporations that challenged state regulations. And those corporations grow bigger by the minute. Antitrust laws have relaxed, and there’s been growth and consolidation at all three tiers of the industry: supplier, wholesaler, and retailer. Major Brands’ biggest supplier, for example, is Diageo, a British company that bought family-owned Seagram’s and also owns Guinness, Crown Royal, Johnnie Walker, Baileys, Smirnoff, Moët Hennessy, Tanqueray, Pimm’s, and Jose Cuervo. On the retail side, it’s now Walmart, not the corner liquor store, that sells most of the nation’s wine and spirits.
Major Brands has grown, too—from a little distributor in St. Joseph to Missouri’s largest wine-and-spirits distributor, with offices in St. Louis, Kansas City, Springfield, Columbia, and Cape Girardeau. But its $550 million in annual revenue is just a sip of a spritzer compared to Southern’s $9 billion straight up.
When Todd Epsten died last May, what mattered most to him was already in place: His wife was running his family’s business. She’s since taken such a strong leadership role that she was invited to represent the nation’s wine-and-spirits industry at a White House Business Council meeting about the fiscal cliff.
Did she want this role?
Usually so direct, McCollum looks away. “I thought it was the right thing to do. And I felt that I was capable. I knew it was a changing business, and I’d have to be on my game.” She looks back and smiles. “It wasn’t the easiest choice, but it was the best choice.”
Talking about the challenges her company’s facing, she says, “I’m a believer in the underdog. Buffalo’s an underdog city, and the sports teams never win.” For her 50th birthday, she flew back, got wings at Frank & Teressa’s Anchor Bar (“They’re not called Buffalo wings ’cause buffalos have wings”) and went to a Bills game. “And they won,” she exults. “They never beat the Patriots, and they came from 21 points behind. Tom Brady’s so good and so fancy, and then you’ve got Ryan Fitzpatrick, who puts crockpots in his garage after the games.”
McCollum’s not fancy, either. She gets up at dawn, struggles with the 107-year-old plumbing in the big old house her sons love too much to leave, and tries to exercise. On good days, she makes it to Forest Park with the family’s Bouvier, Onyx, before she drives Brian to John Burroughs School, goes in to the office, then heads to her afternoon classes at Washington University School of Law. Her classmates are kind (although in the beginning, they clammed up in the elevator because they figured her for a professor).
Back in college, McCollum was the kind of girl guys wanted to date and marry—easygoing, loved sports, looked great without fussing. She’s fun, never moody or grim. You get the sense she could have a root canal without anesthesia and be laughing with the hygienist.
Losing her husband, though, was a lot worse than a root canal.
“I know it’s important to keep a positive attitude—both at work and at home,” she says. “Which doesn’t mean these past two years have been easy. They have not been.” Taking Michael to college, leaving him there, and coming home alone—she hadn’t braced for that.
“Growing up in Buffalo, we had a long driveway with the garage at the back,” she recalls. “My brother and I had to shovel. And then, just when you thought you were done, the snowplow would come, and it would dump 2 feet of that jumbled ice and hard snow at the end of the driveway. It’s like that. You look up, and you hear the plow.
“I’ve focused on managing each day and finding something good in each day,” she says, her voice brightening by sheer force of will. “This was an experience we never would have chosen. But I want it to have meaning.”