by Joyce Marcel, Vermont Business Magazine It is 1972 in Burlington, and a man named Howard Aiken has just created a new service for collecting and processing billing data. Based on that, the company he starts, Vermont Information Processing, soon has six employees. In 2001, Aiken sells the company — now 45 workers strong — to the employees. Since then, VIP has grown into a stealth behemoth, so secretive that its CEO won't sit for an interview and its top-level employee-owners squirm when asked to quantify the company's revenue.
Today, Aiken's little company, now located in Colchester, is celebrating its 50th year in business. It has grown to 600 employee-owners and is widely credited with revolutionizing the national beer, wine and soda industry. Its recent yearly revenues, according to ZoomInfo Technologies, a leading go-to-market intelligence platform for sales and marketing teams, reached $99 million.
Operations Director Louise Morgan, who has been with VIP for 25 years, concedes the company has gained a reputation for secrecy. “We are kind of stealthy in that regard, only because we're not big on marketing ourselves, or putting ourselves out there,” Morgan said. “We're so busy focusing on our customers and providing what they asked us to do and delivering on those promises that we make.”
VIP's customers range from giants like Anheuser-Busch and Molson Coors to local craft breweries. The company doesn't limit itself to beer; it processes information for companies such as Pepsi as well.
VIP has grown, in part, through acquisitions, including MicroVane in 2003, BDN Collections in 2015, TradePulse in 2017, Vistaar's US Beverage Alcohol in 2020, and Data Consultants Inc, BizStride and eoStar in 2022. It now has small offices in Michigan, Pennsylvania and Missouri, but its main campus remains in Colchester.
Before the rise of computers, everything was done on paper. Remember the sales books with the white page, the yellow page and the pink page? That was what data looked like when Aiken had his bright idea.
“Howard Aiken founded us as a billing service,” said Heather Burnett, who has been at VIP for 18 years. “He found a few customers in the southern part of the state. He worked with a hardware company, a produce company and a beer distributor. At the end of the day, they took their invoices, put them on a Greyhound bus and sent them off to Burlington. He rented space on a computer at night because it was the cheapest time to do it, and he would key in all the sales reports based on all those invoices, wrap the sales reports around those invoices and send them back down south on the bus the next morning.”
Aiken recognized that the one business that always paid on time was the beer distributor.
“He said, ‘This the business that I want to be in,’” Burnett recalled.
That customer, by the way, was DeWitt Beverages in Brattleboro. Farrell Distributing in Rutland, another VIP client, acquired DeWitt several years ago, so you could say VIP has serviced at least one company for 50 years. And Leader Distributing, a Pepsi bottler/distributor, is in Dewitt's old warehouse in Brattleboro and went live with VIP a year ago. So, the beverage world spins round and round and VIP thrives.
“One thing that I take from that story is that the very first customer that he worked with is still a customer today,” Burnett said. “That is so important to us, because it really is about the relationships that we build with our customers — that long-term friendship, if you will — that we've developed over all the years. We have several customers like that, customers who have been our clients longer than a lot of marriages last.”
Dating back to Prohibition, the beverage alcohol industry has comprised three tiers: the producers, or the makers of the product; the distributors; and the retailers (grocery stores, bars, convenience stores, etc.). VIP offers data analysis for each tier.
“VIP is a software company that provides solutions for the beverage industry,” Morgan said. “We're heavy in beverage alcohol, but we also work for a lot of nonalcohol-industry customers like soda bottlers and such. So, we have our customers — our suppliers or makers of products — like Anheuser-Busch or Absolut Vodka, and then the local distributors distribute that product to the retailers in local markets. We provide solutions for suppliers, distributors and retailers to help them streamline their businesses, sell more product and operate more efficiently. For many, we provide back-end services for improving their businesses so they can sell more product and be more efficient.”
Photo: VIP employees meet in a conference room named "The Tap Room." Photo: Baldwin Photography.
Sierra Nevada Brewing, on the West Coast, is a pioneer in that regard. It has been in the craft beer business since 1980. It distributes its products in every state in the country as well as in parts of Europe, Australia and Asia. It has been a client of VIP for about 15 years.
“We and other suppliers like breweries, wineries, distillers, etc sell our products to distributors, who in turn sell all our products into individual retail outlets,” said Rhonda Swanson, sales information manager for Sierra Nevada. “We have a little over 400 beer distributors around the country that we sell our beer to. When the beer distributors sell beer into each of the retail accounts, they share that information back to VIP. Hundreds and hundreds of distributors of beverages send their sales data to VIP every night.”
VIP collects and processes that information and makes it available to suppliers for a monthly fee.
“VIP’s data allows us to have a more granular view of where our product is going at the retail level,” Swanson explained. “We use this data to understand where our products are selling well — or not — and to identify opportunities for additional sales. We’ve seen VIP grow and evolve, and over the years they’ve developed a variety of tools for suppliers that leverage the sales data they collect from distributors. They are truly a valued vendor partner of ours.”
Closer to home, VIP lists among its clients Citizen Cider of Burlington, the third-largest craft cider brand in the Northeast.
Justin Heilenbach, the president and co-founder of the company, which employs 90 people, says he is a big fan of VIP.
“We work with wholesalers all over, and they're all blown away when we tell them that VIP is located near us and that we know them and we're friends with them,” Heilenbach said. “They’re not just managing data for Citizen Cider; they're managing data for global beverages like Budweiser. We're a small customer in the big picture of things. So, to be able to have that kind of dialogue with them is awesome.”
VIP provides Citizen Cider with the data and the tools the company needs to evaluate how its brands are doing in the marketplace. “For example,” Heilenbach said, “VIP has a geo-locator feature that allows a sales rep in downtown Boston to put into their phone all the accounts that sell Unified Press Cider, and they'll all show up on the map.”
Citizen Cider can drill down to study a single account or survey the entire national market using VIP data, Heilenbach added.
“For example, I could look at Brattleboro Co-op and see how many cases of each of our products sold in the last 36 days,” he said. “You can go down to the individual account level. You can also look at whole states. Each wholesaler has its own sales team. I can look at what an individual salesperson — one who doesn't work for me but who works for the wholesaler — has sold, specifically. We can use that to acknowledge them. ‘Hey, you've been our No. 1 rep in the market in the last year; here's a gift card.’ It's an incredible amount of data.”
VIP's data can be a sales tool and can help make marketing strategy. It can help with pricing and inventory management. A company pays for the level of data it needs.
“It's live on our phones,” Heilenbach said. “We use VIP data to prepare for every sales meeting. It's the primary way that we manage sales strategy for our business.”
Another VIP client is Zero Gravity Craft Brewery, a leading Vermont-based regional brewery that distributes products across New England, New York and New Jersey, with emerging distribution markets in Pennsylvania; Washington, DC; and Virginia. The company currently has around 75 employees and operates out of two facilities, one in Burlington and the other in South Burlington.
“Simply put, we utilize VIP as a primary tool to help streamline our sales team’s efforts in identifying market trends and opportunities,” said Zero Gravity's sales analyst, Cody Semmelrock. “VIP is able to provide us with as close to real-time market information as possible. At 50,000 feet, we can look at year-over-year and month-over-month comparisons for how different distributor sales levels have changed in the marketplace. But the service goes far beyond general sales levels.”
Zero Gravity can then track percentage or volume changes and other key performance indicators across its many different product SKUs (stock-keeping units).
“With this tool, we can create a multidimensional scoreboard that will help us win," Semmelrock said. "VIP provides our team with essential information in driving efficient and effective sales strategies, making sure that we are allocating our resources effectively in each one of our markets. For example, we can track how well a given product’s sales increase came directly after a specific marketing campaign in a certain location. These types of insights assure that our spends are achieving the return on investment we would hope for and help make sure we can continue to grow moving forward.”
Solutions
VIP's offerings have grown exponentially more complex over the years.
The company has software developers who develop specific applications for specific customers. Anheuser-Busch, for example, has 700 distributors across the United States.
“Say I'm Anheuser-Busch,” said Morgan. “I want to know where that product is being sold in those markets, and what type of accounts are buying those products? Convenience stores? Bars? In terms of the sales and inventory, what's happening in the various markets? Like, how is Bud Light doing in Dallas? And what do I need to do there to promote my products differently? Or price my product differently? Or what kind of discounts do I want to apply in that area? Based on historical information and insights that VIP collects from those distributors and provides to Anheuser-Busch, they can make decisions.”
VIP has competitors in the market.
“We have competitors in the different aspects of what we do,” Morgan said. “What I just described is one area of our business, and we have a couple of competitors. They're on the smaller side and trying to get in there because we're the larger fish. Everybody wants to come after the big guy.”
VIP does many other things for its clients.
“I mentioned there are 700 Anheuser-Busch distributors,” Morgan said. “There are a lot of other distributors that sell other products, like Molson Coors products and Miller Lite. There are about 1,200 distributors across the United States, and some of those distributors use VIP to run their business. They use our software to do their inventory management, sales, reporting, accounts receivable, place their orders, etc.”
The explosion of craft brewing in the US has certainly helped expand VIP's business.
“A distributor has to manage a lot more products, because the complexity of their business has gone up,” said Brian Kelly, who oversees sales for VIP. “Because it's not just 100 products that they are distributing; it's now thousands, in some cases. The complexity of their business certainly has changed, and what they would need from a software company such as VIP to help them has provided new opportunities for us. The number of breweries out there that are using our service has grown because of the explosion in craft beer, as they need those tools and analysis to understand how to take their business to the next level.”
Photo: VIP employees meet in the kitchen. Courtesy photo.
Employee-Ownership
VIP is one of the largest companies in Vermont to operate under an Employee Stock Ownership Plan. in Vermont.
ESOPs allow employees to own all or part of their company. Individual employees receive shares based on the number of years they have worked for the company.
At VIP, the company is 100% employee-owned. After working for the company for one year, an employee begins collecting shares through a retirement program.
“When you initially join the company, depending on your start date, you'll become part of the ESOP,” Morgan said. “It's six full years to get fully vested into that. The company gets valued each year, and each employee has a certain number of shares. They have a certain ownership stake within the ESOP.”
A reevaluation of the company takes place every year.
“Each year we meet and go through our successes and find out the company valuation and how well things have gone and what that means to us individually,” Morgan said. “It depends on how long you've been here.”
When employees leave the company, they cash out their stocks and leave with a significant retirement benefit.
Employees at ESOPs are known for their hard work and commitment to their companies, as they are working, essentially, for themselves. This is certainly true at VIP.
Hard work — including often staying at work late to help a client — is a big part of the culture.
“It all starts with Howard and his way of leadership,” Morgan said. “He's just a head-down, get-the-work-done kind of guy. And that's how we've all grown up here at VIP. We just want to get the work done.”
Morgan described the culture this way: “If we say we're going to do something, we want to make sure we're following through on it. If we've promised something to a customer, we want to make sure we deliver on it, and deliver on it in time, and with what we've said we're going to do.”
Long-term relationships with customers are vital to the success of VIP, Burnett said.
“It's a big thing,” Burnett said. “It's a small industry. They're like our friends, and we go back a long way. They enjoy coming to our annual conference, which we have here in Vermont. We love bringing people to Vermont, showing off our state, and bringing business here. They love coming here.”
The perks are good at VIP. In 1990 Aiken opened an in-house child care center, for example. Three or four of his female employees were about to have children, and he wanted to make it easier for them to continue working.
“Howard is all about family and the work-life balance and providing a space where you can be right there and walk down or see your child and feel comfortable that they're being taken care of,” Morgan said.
Today, employees also have an on-site gym, sports facilities and, most recently, in partnership with Marathon Health, a health clinic across the street — solely for themselves. While most of us must wait months to see a medical professional, VIP owner-employees must only wait a day or two.
Photo: Company perks at VIP include a child care center, sports facilities, an on-site gym and, most recently, a health clinic across the street. Photo: Baldwin Photography.
“It's not only taking care of each other, but getting to know our co-workers,” Morgan said. “When you walk around here, you see people interacting with each other and see the way they get along, whether it's playing a lunchtime basketball game together out on our basketball court or working out together in our gym. People walk together and take laps when they need a break from their desk. People do all sorts of things outside of work together. We have soccer teams and field hockey and ice hockey teams. People go to trivia nights together. Or they go get a beer together. We really want people to enjoy where they work. They spend so much time with their co-workers, we want them to enjoy it.”
Photo: At VIP, the company is 100% employee-owned. Co-workers mingle in the hall. Photo: Baldwin Photography.
Today And Tomorrow
Aiken is retired now, but he remains on the board and is involved in making strategic decisions for the company.
At this point, with the domination of hand-held computers in people's phones, it doesn't really matter where VIP is located.
“Our customers are spread out across the country, anyway,” Morgan said. “So being in Vermont is not a hindrance in that regard. Sometimes it's a hindrance in terms of finding resources to work for us.”
Like almost every Vermont company I talk to, VIP is having trouble finding new hires. A lot of its growth is by word of mouth; customers are sometimes the best advocates.
If people work hard and fit into the culture well, the sky is the limit, Burnett said.
“If you work hard and are focused on doing the right thing and helping the customer, you never know where you can end up,” she said. “When I started, I was doing cold calls. And now I'm fortunate to work with some of our largest customers and build those relationships with them and hear what their needs are. It's fantastic.”
The company prefers to hire from within.
“There are different paths people can take, just depending on what their skills are,” Morgan said. “If they're more technically inclined, they might become developers. They might become managers of different teams. They might be a product owner of a particular application.”
Two years of COVID quarantine have proved that it often does not matter where a person works from. The majority of VIP is working a hybrid schedule and enjoys the balance between working from home and coming into the office. VIP is now studying and developing applications that connect the three tiers of their industry: production, distribution and retail.
“Say the supplier is Anheuser-Busch, and then there are the distributors, for example, and all the bars, convenience stores and gas stations,” Morgan said. “We want to continue to work with all those three tiers of the industry and develop applications that help connect those three tiers.”
When VIP develops a pilot program, it sometimes works the bugs out with local beverage producers like Citizen Cider.
“It's cool to be near them,” Heilenbach said, “because when they want to pilot things, they do look to their local partners.”
He said his company is going to test a new pricing tool VIP has developed to see if it proves beneficial.
The company has no intention of moving out of Vermont.
“We love being in Vermont,” Morgan said. “We love the lifestyle of Vermont and staying true to our roots here.”
And the employee-owners of VIP have no intention of selling the company, Morgan said. She sees the future as being very bright.
“We always say, ‘Take care of the customers; they're our friends. Develop relationships and take care of each other, always,’” Morgan said.
Photo: Cheers! VIP celebrates its 50th year in operation. Photo: Baldwin Photography.
Joyce Marcel is a journalist in southern Vermont. In 2017, she was named the best business magazine profile writer in the country by the Alliance of Area Business Publishers. She is married to Randy Holhut, the news editor/acting operations manager of The Commons, a weekly newspaper in Brattleboro.
