Southern Wine & Spirits has confirmed reports that it struck a deal with small wine and spirits distributor Frederick P. Winner, Ltd to form a joint-venture in Maryland and Washington, DC, where they will join forces in distributing wine, spirits and non-alcoholic brands. The new companies will be called Southern / F. P. Winner Wine & Spirits Distributors of Maryland and Southern / F. P. Winner Wine & Spirits Distributors of Washington D.C. Steven Dick, General Manager, Southern Wine & Spirits of Delaware, in addition to his current responsibilities, will oversee the sales operations of the newly formed joint venture as its V.P General Manager.
This is an interesting development because it marks the third market Southern has entered recently, with the other two being Indiana and Minnesota. Needless to say, the action is heating up in the wine and spirits wholesale world. Consider these transactions just in the last few weeks:
1. Berkshire Hathaway's McLane entering a deal to buy Empire Distributing in the Southeast
2. Republic cutting a deal with National Wine & Spirits of Indiana
3. Southern creating a J-V with beer distributor JJ Taylor to enter Minnesota
4. Southern announcing the entry into Indiana without a partner, complete with the appointment of Gerald Rivero, Jr. to evp, general manager of the new operation.
This burst of activity follows a year with virtually no wholesaler consolidation. The mega-deal between Southern and Glazer's was called off in September, you'll recall, after announcing plans to form a joint-venture in August 2008. We're also seeing lots of reorganizations within the wholesale world. It opens up a lot of questions: How big can Southern get? What happens to the second tier players, like Republic National and Glazer's? What happens to the third tier players? And what happens to brands? Clearly, the industry is headed towards more mergers, joint-ventures, and acquisitions. The entry of a well-heeled and acquisitive player into the field, with lots of logistics experience (McLane), has fanned those flames.
Pit that against the big wine and spirits suppliers -- mainly Pernod, Constellation, and Foster's - who have completed or announced their intention to streamline their routes to market in the US by aligning themselves with distributor groups. It's a wild west out there, and wholesalers are aggressively moving into new territories, cutting deals, and staking their claim. Size does matter, and scale does matter. It brings to mind the famous Chinese proverb: "May we live in interesting times." Indeed we are.
Speaking of distributor reorganizations, Republic has promoted Bob Hendrickson to evp, where he will oversee the entire country for all sales and marketing functions. Bob previously served as president of RNDC-Texas and then president of the company's western region. Charlie Andrews, currently president of RNDC's eastern region and Control States, will continue in that capacity.
FEBRUARY: SPIRITS POST SOLID GROWTH IN CONTROL STATES
Spirits volumes during February in control states grew 3.3% compared to the same period last year, reports NABCA. Rolling-twelve month volumes gained 1.7% compared to January's 1.5%. Meanwhile, dollar sales grew 4.3% in the month and 2.3% in the 52-week period. This seems to suggest that discounting improved in February.
Irish whiskey was the fastest growing category, up 22.1% in the month, but keep in mind that growth is coming off a small base. Irish Whiskey only has 0.5% market share of spirits in control states. Vodka, the big kahuna with 33% share, grew 7.4% in February. Other categories, including Brandy/Cognac, Canadian, Cocktails, Cordials, Domestic Whiskey, Gin, Irish Whiskey, Rum, Scotch, Tequila, and Vodka, exceeded their twelve-month trends in February.
WINE & SPIRITS DAILY TO RE-LAUNCH
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MARYLAND SENATE TO DEBATE WINE SHIPMENTS. Although proposals to allow direct-to-consumer shipping in Maryland are tied up in committees, proponents have one last chance before the 2010 general assembly session ends in April. Sen. Robert Zirkin has induced a floor debate on the issue scheduled for today with an amendment to an unrelated bill that would allow wine shipments. Stay tuned...
THREE THIEVES is introducing a high-altitude Mendoza Malbec, titled "Show Malbec." It retails for $12.99 and will be available in top wine shops and restaurants nationally.
Until tomorrow, Megan
"It is only the first step that is difficult."
Marie De Vichy-Chaconne
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