From the mail room to the board room — that’s how so many of NABCA President and CEO Jim Sgueo’s colleagues and industry peers describe his 53-year career at the association. But there’s a lot more to it than that.
“After graduating high school in 1968, I started working a summer job at NABCA, which I continued part-time during college,” Sgueo says. “I started in the mail room, and since then I’ve been involved in pretty much every job here except accounting. In the ‘80s and early ‘90s, I worked as production department supervisor, then deputy director, then director (which was changed to President/CEO in 2006).”
When he started in the ‘60s, Sgueo did not know the difference between a control state and an open state — or much about the alcohol industry in general.
“I was printing all these reports in the production shop, so I got a sense of the differences,” he recalls. “Then I moved on to pricing reports and computer programming, trying a lot of different things. I was actually the programmer that took us from punch cards to a cardless system back in the ‘80s — there were a few sleepless nights making sure that went smoothly.”
That experience with data has served him well throughout his career, as NABCA has continued to innovate and refine the information products that drive the vast majority of the association’s revenue.
“NABCA started collecting industry data primarily because of the Des Moines warranty, the purchase order contract that stated products had to have price consistency across the control states,” Sgueo says. “In the ‘50s the annual summaries came out, then the monthly state reports (Green Books).”
That stayed pretty much the same until the ‘80s, when Sgueo was in the IT department. The director back then challenged Sgueo to develop a data product that allowed suppliers to get information online. He connected with a consulting company and began generating the SAM products they have today — and met former NABCA COO Jerry Janicki as part of that project.
“We’re still expanding our data offerings,” Sgueo says. “It’s really afforded the association an opportunity to do things for our members financially that we hadn’t been able to do prior.”
Sgueo is particularly proud of two member programs NABCA launched thanks to revenue driven by its data sales: education grants and the Administrators Conference.
NABCA’s education grants were developed in the ‘90s. They can be used for public health, law enforcement, education, staff training or other uses. The association gives more than $1 million annually to state members or stakeholders it works with, providing resources for jurisdictions that wouldn’t normally have that kind of money available.
“Out of a budget of $12 million, we probably spend 10% on grants, awards and research, plus another 10% to hold member meetings,” Sgueo says. “So 20% of our budget is given to the states in one form or another to help them do their jobs. We also provide funding to alcohol education groups like the National Liquor Law Enforcement Association, National Organization on Fetal Alcohol Syndrome, Community Anti-Drug Coalition of America and MADD. And we were able to give money to Mississippi after Katrina hit.”
The Administrators Conference launched soon after Sgueo became CEO in 1993 — after a false start four years earlier.
“When I was deputy director I tried to foster this idea for the Administrators Conference to the board,” he explains. “I’ll never forget. I convinced the director it was a good idea, and he convinced the chairman. But when we submitted it to the board, a few of them said, ‘Well, it sounds like a boondoggle to me.’ So the idea was abandoned, but when I was promoted it was one of the first things I put back on the agenda.”
What began as a gathering of three advisory committees and no suppliers has grown to seven committees and (a limited number of) suppliers in attendance.
A Changing Industry
During the last 15 years, the performance of the control states has outpaced licensed states, on average. Sgueo attributes this trend to modernization efforts that have made agencies more effective wholesalers and retailers.
“From the time when there were counter stores where you’d go in and order from a teller like at a bank, control states have really come a long way in serving customers and their communities,” he says. “Prior to 1980, you made money no matter what you did, since sales grew every year from Prohibition until then. But once sales started going down, state legislatures needed to invest in the business to keep getting the revenue levels they were used to. The agencies that got support from their legislators and governors thrived, and the ones that didn’t haven’t done as well.”
While NABCA doesn’t take an active role in encouraging members to modernize, it does provide tools and examples for those that want to.
“We put states in connection with other states making changes, and with industry and other businesses that have modernized,” Sgueo says. “We show them what others have done and how they’re profiting from it. Our job has been to find ways to get the states to interact with each other and industry members in a legal and responsible manner so they can learn from one another. It’s the sharing of innovative practices that helps more than anything else.”
The biggest control state change came nearly a decade ago when Washington privatized its liquor distribution and retail sales.
While Sgueo calls that decision “uncomfortable, awkward and disappointing,” he stands by NABCA’s policy of not advocating for or against privatization.
“As an organization we don’t tell any state the right way to do things,” he says. “A governor in Virginia campaigned on a privatization platform, and even told Neal when he appointed him not to get in the way of any privatization effort. We had an interview with the governor’s chief policy officer and were asked if we would lobby against the effort, and our response was ‘No, that’s not NABCA’s job’.”
NABCA also did not lobby when Costco campaigned to privatize sales in Washington, an effort that was successful.
“I think if Washington’s agency had the support of their governor, they could have handled the situation differently,” Sgueo says. “If they’d been able to provide Coscto with an agent’s license like some states have now done, I think it would still be a control state. Ultimately, prices went up 10-30%, stores increased from 500 to 2000, and research suggests that if people could vote again today, they wouldn’t have chosen to privatize.”
There were a lot of lessons learned by the control states and the industry overall from what happened in Washington, including from promises that weren’t kept.
“In the ballot initiative, it promised to give law enforcement $10 million in funding to handle all the extra stores,” Sgueo says. “That money was stripped away after it was approved, despite the fact that several Costco ads featured law enforcement personnel speaking about the money. It was a disappointing turn of events overall.”
Ultimately, the results in Washington have influenced the talk of (or lack of talk about) privatization in other jurisdictions.
“There are conversations in the Mississippi legislature, but folks in favor of the control system have pointed to Washington and how prices increased,” Sgueo says. “So it’s still out there as an example of what not to do.”
Passing the Baton
As of October 1, NABCA General Counsel Neal Insley will lead the association. Insley spent decades in Virginia, working within the control state system prior to his current role.
Sgueo says the transition to new leadership has been seamless.
“It’s been about as smooth as it can be,” he says. “This sounds like [manure], but frankly we’ve been working together every day for the past six years. Right now, I make decisions, but never unilaterally — I always have input from the team. That transparency and inclusiveness means Neal won’t meet any surprises.”
For his part, Insley is prepared for his new role, and thankful for the support he’s received over the years.
“It’s been an absolute pleasure working with Jim,” he says. “Our history together is really a testament to that, both our professional relationship and our friendship. Looking back over the years, I used to be Jim’s boss (as NABCA Chairman), then he was my boss, and now I’m his replacement. It really speaks to Jim’s personality and his professionalism that we were able to make it work.”
Sgueo describes his own leadership style as “MBWA — management by wandering around.” He has an open-door policy to increase transparency and emphasize that he welcomes ideas from staff.
“I want to empower them to make me look good,” he says. “Without the staff, you can’t grow the association, and my favorite thing about working at NABCA has been them. It’s a great management team, and the people they’ve hired have added to our success as well.”
After five decades — including almost 40 annual conferences, 28 legal symposiums and 26 administrator conferences — Sgueo eagerly anticipates a simpler life.
“I’m looking forward to not getting calls on Sunday nights saying the Pennsylvania legislature is about to vote on privatization, and having it held off by one vote,” he says. “That’s the kind of thing I won’t miss at all. I don’t think I’d have a full head of hair without this job, but it certainly didn’t help.”
At 70, he’s ready to spend more time traveling and playing golf, which require continued physical and mental health.
“This job is 24/7 — it’s dealing with what’s going on in every state politically, there have been issues with members being arrested, and of course there’s our 40-plus staff members,” he says. “There’s a constant worry and concern about always being on, never letting your guard down — and it’s tiring. I want to go home and just worry about my family and me.”
Despite the challenges, he emphasizes that the job has also been fulfilling.
“It’s been a joy and I’m honored to have had this opportunity,” Sgueo says. “I’ve been able to work with such a unique board at NABCA, who all come from different backgrounds. We have law enforcement, lawyers, politicians — being able to interact with so many different disciplines has given me different points of view. I’ll certainly miss those interactions.”
And for someone who avoided the spotlight throughout his career, retirement will be no different.
“By the time this article comes out I’ll be retired, and in my view that’s the best place I can be at this stage of my career,” he says, adding, “I wish everybody good health and happiness.”
Jeremy Nedelka is the Vice President of the Beverage Information Group. His first role covering the beverage alcohol industry was as Editor of StateWays in 2010.