Business

Opinion by Richard Ducote: 'Good guy' behind Kalil's success loves his work

Economic tides washed away many business establishments in the quarter-century since the Star first published its Top 200 list of major employers. Gone are the likes of retailers Zody's, Super City, Diamonds, Lucky and Fedmart. Booms, busts and buyouts shuffled others while giants like Fort Huachuca remained regional anchors. Remarkably, one business and its executive are the same today as then. Kalil Bottling Co. ranked at No. 137 on the first Star 200, with 156 full-time-equivalent jobs. George Kalil, now 67, was president in 1981 and he still is. Last year, the company came in at No. 137 again but with 320 FTE jobs in Southern Arizona. Kalil's ranking is No. 146 with 321 FTEs on the new Star 200, released as a separate section today. It remains a local institution. George Kalil's title is no honorary one and he is no figurehead. He has racked up more hours at the South Highland Avenue bottling plant than some of the furniture. He started working for the company when he was 10 and was at it full time while still attending Tucson High School. Kalil Bottling was started in 1948 by George's father and grandfather, the late Fred and Frank Kalil. For George, drive was something he didn't have to develop. It seems to be entwined in the family DNA. Older brother Frank became a Top 40 disc jockey back in the day and then built a successful brokerage for radio and TV properties. Younger brother John heads the Phoenix Kalil operations. Sister Barbara McDermott teaches math in Southern California, sister Freddie Schutten is retired in Northern California, sister Gloria Zlaket is a Tucson travel agent and sister Betty Knott is director of development for the Cystic Fibrosis Foundation in Tucson. All the seven Kalils own shares in the business, but George is in charge. He has been recognized over the years as one of the nation's leading independent soft-drink bottlers. An industry trade publication named him to the Soft Drink Hall of Fame in 1992. He was named national executive of the year in 1998 by another beverage publication. Getting up in the morning to compete against both Coke and Pepsi must be like struggling to squeeze your Yugo in between two side-by-side semis racing down a two-lane country road. But Kalil does it and he retains a smile. He hustles RC Cola, 7Up, A&W Root Beer, Sunkist Orange, Canada Dry Ginger Ale, Squirt and a dozen other brands. Kalil is the dominant distributor in Arizona for "new age" beverages like Snapple, Fuze, Arizona Tea and SoBe. The company also distributes Fiji bottled water. Kalil handles about 10 million cases a year of name-brand sodas and another 10 million cases of store-brand and private-label sodas and brands for other bottlers. Total revenue last year was about $120 million. Kalil Bottling blankets Arizona, two-thirds of New Mexico, the El Paso area of Texas, Durango, Colo., and a sliver of Utah. Fewer than half the company's 725 employees work in Tucson. The company has warehouses in El Paso and Flagstaff as well as Phoenix and Tucson. One reason for the company's longevity, George Kalil says, is that most of its managers have been with Kalil for decades. There is practically no turnover in the top one-third of the company, he says. Such loyalty may stem, in part, to the company culture. Kalil still pays 100 percent of the medical insurance for employees and family members, something he and his father, Fred, instituted decades ago. George Kalil still personally signs Christmas cards to the more than 700 employees each year. Kalil takes the long view and believes in investing in the business instead of trying to squeeze out cash profits quarter to quarter. Above all, he sees his duty as building the asset for the long-term benefit of the entire Kalil family. The company also has a profit-sharing plan. Kalil put $1 million into the plan three years ago when he sold its Tucson-area franchise rights for canned and bottled Dr Pepper to Coca-Cola Enterprises. Outside of business, George Kalil is known as perhaps the biggest fan of University of Arizona basketball alive. He has traveled to all but two away games for more than 30 years. He occasionally performs chores like running down a pair of stray court shoes. For business, he constantly surveys store shelves wherever he goes and keeps an eye on what the giants, Coke and Pepsi, are up to. He relishes every moment. "I love what I do. I'd do it for nothing." In a few lean years over the last 40, he's come close. Sometimes he cuts his pay to $100 a week when things get tight. The company will invest big bucks when needed to keep modernizing facilities and making production and distribution more efficient. Kalil is certain the business would be gone by now if he had gone to Harvard Business School instead of starting to work at Kalil Bottling before he could shave. He recalls having only one night off - his high-school graduation night - between the ages of 16 and 20. You couldn't legally ask somebody to work like this. It's what people do when their name is on the building and the fleet of trucks. When you mention "The Good Guys at Kalil," few think otherwise. George has seen to that. And he expects to keep plugging away, as he says, "until my face hits the potatoes."