Tom Cole of RNDC, David Trone Of Total Wine Discuss The U.S. Wholesale And Retail TiersMarch 15, 2018
Last week’s 42nd Annual Impact Marketing Seminar featured two leading players from the U.S. market’s distributor and retail tiers, both expounding on the current and future landscape for selling beverage alcohol in the United States.
Tom Cole, president & CEO of Republic National Distributing Company (RNDC), discussed his company’s proposed merger with Breakthru Beverage, announced last year and slated to close in the second quarter. Cole will become chief executive of the newly merged organization.
Cole said the consolidation of RNDC and Breakthru will create new efficiencies, and improved customer and brand service. RNDC-Breakthru will become the U.S. market’s second-largest wine and spirits distributor, with revenues of around $14 billion and annual volume of 150 million cases. “We recognized that we needed to have greater scale,” Cole told the Seminar audience. “We’re doing the merger to better serve our customers, our suppliers, and to provide opportunities for driving continued growth. The industry is a zero-sum game now. We’ve got more outlets and flat consumption.”
The combined RNDC-Breakthru will reach 30 markets and have a total market share of roughly 25%. The new company, said Cole, will “create value through data and analytics” while engaging with bartenders and retailers to stay ahead of trends propelling growth in local markets. “We’re going to accelerate our brand delivery service,” Cole added. “We’ll incubate brands on- and off-premise and gain market share.”
RNDC-Breakthru will have partnerships with a host of major spirits and wine players, including Beam Suntory, Diageo, Proximo, Constellation, and Ste. Michelle Wine Estates. Amid the current intense competition at the middle tier, the newly merged entity will be well positioned to leverage its expanded scale to create new opportunities for growth in the years ahead.
Another Seminar speaker, Total Wine & More founder and co-owner David Trone, updated the audience on developments at the retail level and what lies ahead. Last year, Total expanded to 245 total stores and generated nearly $3 billion in revenue amid a push in the digital arena. Trone said retailers like Total must “jump on the bandwagon and build convenience” for customers by establishing a strong digital presence. Total Wine launched its own app two months ago, which Trone expects to “blow by 1 million downloads” by the end of the year. The company’s omnichannel approach has also been furthered by a new streamlined website.
Although Total Wine is placing “the biggest bet on digital,” Trone also noted that the company’s brick-and-mortar plans remain ambitious: This year, Total Wine plans to add 20 additional stores. Across all of its locations, customer experiences will be at the forefront, with heavy investments in classroom spaces, community events, growler stations, and customer service.
Expansion will come hand-in-hand with challenges to state laws in control states and license limitations in more conservative open states. “We’re taking a look at how we can change these laws with judicial action, legislation, and regulation,” Trone said. “And we’re making strides in figuring that out.” Trone concluded his speech with a reminder that he intends to run for a congressional seat in Maryland this fall, where Total Wine & More is headquartered. —Shane English & Julia HigginsSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.