Earlier this week, I broke the information right here at VinePair that Republic Nationwide Distributing Firm (RNDC) plans to “withdraw” from California — like, the complete state — firstly of September. The second-largest wine and spirits distributor within the nation has been collapsing within the Golden State for years, however its demise spiral had tightened significantly for the reason that prime of 2025, when main manufacturers started heading for the warehouse door roughly month-to-month. Now, it’s chucking up the sponge.
This can be a company disaster mainly with out precedent in the US’ usually steady beverage-alcohol distribution enterprise. There’s merely acquired to be extra to the story of how a agency that Shanken Affect projected to do $2 billion in annual income in California firstly of the yr wound up claiming “no path to profitability” within the state simply 5 months later. I’ll proceed to report it out. (You probably have ideas, electronic mail me [email protected] or textual content me securely on Sign at dinfontay.11. You’ll be able to stay nameless.) However within the meantime, I wish to use this week’s column to come back at this story from a distinct angle. A beer angle.
By my depend, since 2022, there have been a minimum of half a dozen main provider and/or model departures from RNDC’s California portfolio: The Sazerac Co. in 2022, BuzzBallz in 2024, then Tito’s, Brown-Forman Co. (B-F), Excessive Midday (owned by Gallo), and Cutwater (Anheuser-Busch InBev) in 2025. Of those, most opted to take their volumes to Reyes Beverage Group (RBG), the nation’s largest beer wholesaler and a dominant drive in California. That makes loads of sense on benefit: Usually talking, beer distributors are likely to outperform wine-and-spirits homes on inserting higher-velocity, lower-price level, single-serve merchandise in a broader number of retail channels, particularly non-chain ones. (Maybe tellingly, the few vital suppliers that got here to RNDC’s California operation prior to now few years have been mid-major winemakers with out significant RTD footprints.)
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As the largest wholesaler within the state, RBG boasts a grip on the beer recreation that borders on a stranglehold. So when California tweaked its warehousing laws to permit beer wholesalers to extra simply distribute spirits late final decade, it stood to motive that the corporate — flush with the capital and swagger that comes from being the wagon to which Constellation Manufacturers has lengthy been hitched — would go in search of full-proof additions to its portfolio. And that liquor manufacturers, particularly these with canned-cocktail aspirations, would come calling.
Don’t get me fallacious: No person will get a go from RBG in California, and RNDC was no babe within the woods. The truth that the heavyweight in Constellation’s “gold community” took among the flailing mega-distributor’s billions of {dollars}’ price of lunch cash within the state is an indictment of the latter’s mismanagement, not the previous’s notoriously sharp elbows. A number of present and just lately former RNDC staff in California have hammered this level residence to me, describing a mixture of conceitedness, incompetence, and cronyism on the firm’s highest ranges.
“Administration has been the largest challenge,” says one present RNDC CA employee, who requested anonymity to talk with me with out worry of retaliation. “They began specializing in numbers as an alternative of buyer satisfaction and that’s what drove them to their fall.” A just lately former RNDC CA employee who requested anonymity to protect relationships within the business instructed me the corporate was “terribly run” and its execs had been “in over their heads” within the Golden State, recounting the way it had despatched a cadre of Texas-based executives west in hopes of working the identical playbook that that they had in its residence market. “None of them acquired out to satisfy the shoppers, be taught the market, or hearken to veterans’ suggestions,” they are saying. I ought to be aware, there’s been some social-media finger-pointing at RNDC’s Teamster-repped California salesforce as a supposed millstone across the wholesaler’s neck within the state. However that doesn’t sq. with the details {that a}) Southern Glazer’s Wine & Spirits’ (SGWS) gross sales individuals are additionally repped by the Teamsters beneath the identical joint contract, and b) sustaining a productive relationship with a union isn’t some novel or unheard-of administration accountability. It’s a part of the job. To not put too tremendous some extent on it, however from obtainable reporting up to now the Reyes Bros. and the Teamsters didn’t run RNDC out of California… its personal executives did.
Intriguingly, a number of of my deepest sources on the West Coast, none of whom know each other, inform me that RNDC was truly in talks final yr to promote its California enterprise to RBG, a declare that may comport with interim CEO Bob Hendrickson’s assertion in an inner video I obtained Monday that “the corporate tried every thing of their means to both do a merger, an acquisition … and do what we might to stay solvent in California.” Hendrickson, a longtime government at RNDC who had transitioned into an advisory function in 2024, solely (re)took the reins at RNDC in February 2025 after the resignation of former CEO Nick Mehall; talking concerning the firm as a 3rd get together (“their”) might imply he wasn’t concerned in these talks, which might observe with the final timeline. Neither RNDC nor RBG replied to a request for remark for this column. But when the businesses had been discussing a deal 2024, that dialogue clearly collapsed. Now RNDC CA has, too.
The truth that the nation’s greatest beer distributor has taken benefit of RNDC’s California nightmare to extra quickly restyle itself as a total-beverage behemoth within the nation’s second-biggest beer market doesn’t bode effectively for the nation’s smallest brewers hoping to entry mentioned market. California already boasts a closely consolidated beer distribution panorama due to RBG, which acquired virtually 20 distribution homes within the state between 2018 and 2022 alone, in line with a report that yr from The American Prospect. Fewer routes to the beer aisle means fewer alternatives and worse margins for craft brewers. Even within the absence of many of the franchise protections that addle brewers in most different states, RBG’s sheer measurement has given it unprecedented leverage over the remainder of California’s beer enterprise, and people smaller brewers struggling to hold onto that enterprise’s withering lengthy tail face a narrowing path to market and a worse outlook. (Ditto winemakers, clearly, however this column is about beer.) It in all probability gained’t get wider as RNDC CA sells off its property; seemingly consumers embrace RBG itself, a lesser California beer-distribution conglomerate, or SGWS. In a total-beverage panorama like California, the place beer is usually bought alongside wine and spirits, small brewers are liable to get squeezed irrespective of which class the wholesaler nominally hails from.
This isn’t simply an operational consideration. Identical to there’s solely a lot room on a distributor’s truck for circumstances, there’s solely a lot room in his (or her!!! however principally his) mind for manufacturers. Wholesalers are likely to give attention to what’s scorching and ignore what’s not. Excessive Midday and BuzzBallz are scorching, which is why RBG scooped them up from RNDC. Craft beer just isn’t, which can clarify the chilly shoulder RBG’s California subsidiary, Golden Manufacturers, gave to three-decade-old Anderson Valley Brewing Co. As former proprietor Kevin McGee instructed Hop Soak up June 2024, the distributor had converted to servicing impartial on-premise accounts by cellphone, and declined to help a key new beer’s rollout in additional than a 3rd of its territory. After all, RBG is hardly the one distributor to shift its focus away from the craft beer phase because it’s plateaued. This pivot is widespread. However RBG is the largest beer distributor within the U.S., and California is a vital bellwether for the nationwide beer business, so what the agency does there sends ripples by means of the entire nation.
The place is SGWS on this? The place is Breakthru Beverage Group, which simply leapfrogged RNDC as B-F’s main wholesaler upon the megadistiller’s long-rumored middle-tier reshuffle final month? What concerning the Hand Household of Firms, which simply accomplished some California consolidation of its personal? If RBG doesn’t make a transfer on RNDC’s carcass, anyone else will. And the total-beverage panorama in California — and the nation — will shift once more.
🤯 Hop-ocalypse Now
It’s de rigeuer for craft breweries to again native charitable causes, so when Hurricane Helene wrought destruction upon western North Carolina’s brewers final yr, their colleagues in neighboring Virginia organized a per-pint donation program to boost cash for the restoration. All good up to now. However! The state commonwealth’s Alcoholic Beverage Management Authority (VABC) put the kibosh on that, reportedly telling organizers of Pouring for Neighbors that the (quite common) fundraising tactic ran afoul of its guidelines designed to cut back overconsumption. However! Earlier this month, a tipster despatched me a screenshot from the controller’s personal web site touting a really comparable per-unit fundraising scheme for an unrelated trigger from Jason Momoa’s vodka model. VABC’s spokesperson couldn’t clarify the obvious contradiction at hand, but it surely units up a possible “bizarro world” dynamic: brewers lobbying for equivalence with distillers, slightly than the opposite method round.
📈 Ups…
Braxton Brewing is taking on Hello-Wire Brewing’s house in Cincinnati in a “mutually useful settlement,” in order that’s good… Draft gross sales had been down 3.9 p.c year-over-year over Memorial Day Weekend, per BeerBoard knowledge, however they outperformed whole bev-alc within the on-premise…
📉 …and downs
The Teamsters are hanging Breakthru Drinks in Tampa, Fla., alleging the wholesaler is bargaining in unhealthy religion… Dr. J Jackson-Beckham introduced plans to go away the Brewers Affiliation on the finish of the month… G4 Kegs introduced a “pause” in operations on account of “the continued commerce wars and a decline within the draft market”…
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