Exclusive: Diageo Renews With Southern And Glazer’s In Deals Worth An Estimated $2 Billion

Diageo has renewed its distribution partnerships with Southern Wine & Spirits and Glazer’s across a number of key U.S. markets. The deals include fresh long-term agreements with Southern in California, Florida, Hawaii, Indiana, Kentucky, Alaska and Washington. In addition to those states, Southern is Diageo’s exclusive control state broker in the U.S., covering an additional 17 markets. According to reliable industry sources, Diageo’s U.S. business with Southern is worth around $1.5 billion. The drinks giant last renewed its partnerships with Southern in 2011.

Diageo also has re-upped with Glazer’s for new long-term deals in Texas, Missouri, Louisiana and Oklahoma. Those are worth approximately $500 million. With the new agreements, Diageo will continue to be the largest spirits supplier nationally for both Southern and Glazer’s, which agreed to merge last week to create a distribution behemoth with a footprint of 41 states.

Across the U.S., approximately 40% of Diageo’s business goes through either Southern or Glazer’s. While those relationships cover many of the country’s key cities, Diageo’s overall wholesaler profile remains diversified, with Empire Merchants handling its brands in New York and Breakthru Beverage its distributor in Illinois and Washington D.C.

Among Diageo’s top spirits brands in the U.S., market leader Smirnoff grew 0.5% to 9.6 million cases last year, according to Impact Databank, while Captain Morgan slipped 0.5% to 6.4 million cases. Crown Royal, boosted by its Regal Apple offering, surged 24% to 5.3 million cases in 2015, while Ketel One inched up 0.5% to 2.1 million cases.

Tagged : Diageo, Glazer's, Southern Wine & Spirits

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