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At time it's navigating rancorous relations with some wholesalers and clock is ticking on arbitrator's order to buy out Alani Energy creator Katy Hearn, Congo Brands is losing the architect of its sales & distribution strategy of past coupla years, Sam Wilson. Sam confirmed today reports we'd heard that he'll be moving on this Fri, tho he declined to offer any further details. His exit would seem to leave the recently recruited Liquid Death exec Mark Sherer with the reins on sales & distribution. Sam, recall, is Red Bull vet with subsequent stops at energy brands Bang, Clean Cause and Sway who joined Congo nearly 2 years ago after departure of Bill Juarez, who oversaw launch of Alani Nu and then Prime Hydration (BBI, Jun 20 2022). As reported recently, Bill is currently suing Congo over severance package he says he was denied (BBI, Mar 11). In recent months, Wilson had overseen several territory changes, including shift of brand from Lakeshore to Power in Chicago and exit from Glazer's Jumbo unit in Dallas/Ft Worth, which shortly afterward ceased operations. Congo Clashes With Distribs in Several States; Compromise Coming? More Legal Action? Sam's departure comes as Congo is dealing with raft of stresses despite presiding over pair of brands that have been spectacular growth stories in recent years. One is deterioration of relations with many DSD distributors over issues like direct shipment of products to retailers like Walmart as well as heat the wholesalers are taking over out-of-stocks that they say go back to Congo's own inability to ship them sufficient inventory.That drumbeat of distrib discontent has come more and more to the fore. Lately a number of distribs in different states met with and/or talked to Congo founders and leadership team, trying to come up with a compromise on brands that Congo took direct. At the very least an invasion fee should be paid, according to distribs. Congo leaders complain about performance in big chains but are "na&iuml;ve about the inner workings of chains," said one, noting that with all of Congo's many SKUs, assortment differs from store to store, even of the same chain, because of "manager preference," "store authorizations" and/or "shelf space." Meanwhile, terminated distribs in Ill and Ind have yet to be paid for their inventory, while in Kentucky fractious lawsuit continues with Kentucky Eagle (BBI, Feb 14 and Mar 20). And lawyers are talking behind scenes, with hints that more lawsuits could be coming. It bears keeping in mind that some of these wholesalers, tho frustrated with Congo, are relying on Prime and Alani to help fill void loss by other brand exits, which may include Bang, Celsius, C4 and Electrolit, at time those on Bud side are still reeling from Bud Light crisis. That's likely buying Congo more patience than it might normally expect from these partners.Mandated Hearn Buyout Looming? Then there's the matter of Congo having to buy out Alani creator Hearn after she became disenchanted with its financial stewardship of her brand and took matter to arbitrator and won. Among sources of her dissatisfaction was disproportionate amount she felt her brand was committing to self-distribution network that also included Congo's 3D and Prime brands. As far as we know, Congo has never publicly commented on situation, and our own contacts with distributors suggest that they haven't been informed of situation, which we've only ourselves heard about second- and third-hand. (Congo team won't discuss its biz with trade press.) From what we've gathered, arbitrator ruled that Congo needs to buy Hearn out of her roughly half of ownership, which we've heard she values as high as $1 bil. Bonus structure detailed in Juarez lawsuit offers a hint that Congo may be under the gun to get a deal done by year-end. From what we've heard from folks involved in deal flow, Congo's principals were unsuccessful in raising enough outside money to do a transaction and have also had discussions with strategics about potential sale of equity stakes in Alani and Prime. This comes at time Alani seems to be continuing with its brisk growth, even with Hearn no longer actively promoting brand to her followers. Congo's other workhorse, Prime Hydration, lately has slowed, leaving co with massive inventory overhang, some of it approaching expiration date. That might explain deals we've spotted like 99&cent; at Ralphs or bogo at Vitamin Shoppe. Nor has Prime's energy extension showed signs of igniting so far. Still, co and its creator partners Logan Paul and KSI show no signs of waning faith in brand, doubling down via recent deals with WWE and LA Lakers. Both creators remain highly engaged and continue to generate awareness-boosting headlines. So nobody - least of all the wholesalers - is writing off this brand.

Sales/Distribution Chief Wilson Exiting Prime & Alani Marketer Congo Brands as Wholesaler Clashes Continue, Clock Ticks on Buyout of Alani Founder Hearn

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