SAVE THE DATE!

We've entered a new era in alc bev distribution. Beer guys are selling more spirits (and wine), spirits guys are selling more beer, the big are getting bigger (as per usual) and the little guys are getting out. Smaller distribs selling to larger distribs, a consistent consolidation theme, now happening at an accelerated pace. Primarily in the AB system these days. In 2025, several startling distribution developments advanced one or more of these themes. Some big moves last year pointed towards a very different future, already pushing further in the new year. Beer distribution is getting more intertwined with wine and spirits. As biz models change, it raises new questions. Last yr, the 2d largest wine and spirits distrib, RNDC, closed up shop in California. Just shut its doors. That is unprecedented. RNDC peaked at about $12 bil in revs but it will be billions less after losing brands, shutting CA and selling its biz in multiple states. It closed CA after it lost most of its biggest brands, including Tito's, High Noon and Brown-Forman in CA (following Sazerac in 2023). All those brands went to Reyes Beverage Group. In a few years, Reyes has become a top 10 spirits distrib. Now RBG is going much further.RBG Will Set Up Separate Bizzes in 7 States RBG will take its next big step in spirits distribution, as it "aligned" on "key economic terms" to purchase RNDC portfolio in 7 mkts, according to RNDC ceo Marc Sachs in a note to employees. Deal expected to close in Q2. RBG will sell spirits and wine in FL, HI, IL, MD, SC, VA and Washington DC. RBG already sells beer in those states, but it will run separate bizzes in each state for wine and spirits, at least for some time. But wine and spirits bizzes they are acquiring are typically statewide. Will RBG use territorial toeholds to get bigger in beer too over time? If past is prologue, probably yes. But by keeping bizzes separate, RBG recognizing need for it to retain RNDC's fine wine sales capabilities, for example, as well as to ease concerns of beer suppliers, some of whom were not always thrilled with way bizzes got intertwined in CA.RNDC Lost Other Brands, Sometimes to Beer Distribs; Got "Significant" Financing Meanwhile, what will happen to the rest of RNDC? That has been the subject of much speculation over past yr. On top of what happened in CA, it lost Brown-Forman in many mkts last yr. This yr, it lost Proximo brands in many states too. And on Jan 26, Delicato (#5 vintner) announced moves away from RNDC in many mkts. Proximo went to Superior in OH and Delicato went to Columbia in Pac NW in other notable moves to beer distribs.Meanwhile, RNDC's road ahead remains rocky. It has significant debt and makes little if any profit, sources say. And it has lost a lot of key brands. But RNDC announced it received "significant additional financing." CEO Marc Sachs said: "We are pleased to have the continued support from our lending partners as we deliver against our priorities and pursue opportunities that strengthen our business and our role in the industry." Between what Reyes will pay RNDC (much of it likely for real estate) and RNDC's recently announced infusion of funds, could RNDC find its footing?Wine and Spirits Distribs Face Increased Pressures; Some Are Buying AB Distribs RNDC by far the most notable example, but several more widespread watchouts weigh on other wine and spirits distribs too. Those include: increased incursions by beer distribs into wine and spirits, explosive growth of RTDs (often not sold by wine and spirits distribs), the multi-year decline of wine and the excess inventory and changed trajectory for spirits. But just as beer distribs seek other avenues for growth amidst beer's multi-yr decline, at same time, some wine and spirits distribs are making significant moves into beer distribution system as well. Especially into the AB system. The most notable example is purchase of AB One's NYC branch by Southern Glazer's Wine and Spirits. But Fedway also in process of purchasing Ritchie & Page in NJ, and Martignetti already bought into AB system in MA.AB Remaking Its Distribution System; 10 Deals Since Nov AB increasingly seems intent on remaking its distribution network in a number of ways including with big wine and spirits distribs, family offices, fewer branches and fewer small distribs. SGWS linked to several other possible AB distribution deals, tho no others have yet come to fruition. In one, SGWS and Reyes Bev Group are the 2 remaining bidders, according to multiple sources. If RBG enters AB system, that would change the game yet again. Recall, AB veep of business & wholesaler development Bob Tallett invited RBG ceo Tom Day to attend AB's party at NBWA convention last fall, raising lots of eyebrows, if nothin' else.Most of the action in AB system involves much smaller players. INSIGHTS tracked 10 deals since Nov, all under 2 mil cases. AB forced several of those distribs to sell after finding out-of-code Busch Light Peach. None took to the courts to fight their fate. In all, over 20 AB distribs sold since the beginning of 2025. That's a near record pace. AB had ~370 distribs at end of 2024. So about 6% of its distribs sold in 1 yr. The economics, especially for smaller AB distribs, have become far less favorable since big Bud Light losses of 2023. INSIGHTS has even heard of some losing money. And as a system, AB had been less consolidated than MC or Gold Network prior to this recent run since 2023. One way or another, AB system will have fewer, larger players, including some of largest distribution entities in alc bevs.Questions on Implications of New Model Distribs that sell beer, wine and spirits, whether together or separately, are increasingly the way of the world. But in a conversation with veteran dealmaker and consultant Joe Thompson, he raised several pointed questions about implications of this new model. As one of architects of last big change in distribution, combo of Miller and Coors distribs, Joe's cautionary notes about emerging new model are worth noting. "All of these big changes, some aren&#39;t thinking enough about the consequences," according to Joe. He thinks beer wholesalers are "underestimating" the costs. He points to effects that are "three legs of the stool" which could prove problematic over time. Those are franchise laws, margins and equivalence. Spirits only have franchise protection in 8 states, and wine and spirits distribs often have far lower % margins. Those lower % margins and lesser protections could lead to lower multiples of EBITDA and ultimately lower value, according to Joe. As for equivalence, distilled spirits and beer suppliers clearly on opposite sides of the issue. How will new combo wholesalers/suppliers navigate that? However this all plays out, these are heady times.

Major Distribution Changes; Reyes to Get RNDC in 7 States; More RNDC Losses; More SGWS and Beer? 20+ AB Deals in 12 Mos

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