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Exclusive: Top U.S. Wholesalers Expect To Gain Ground In 2021

April 19, 2021

For over a year now, the question most on Americans’ minds has been how long it will take to return their lives to normal. According to leading wine and spirits wholesalers surveyed by SND sister publication Shanken’s Impact Newsletter, we could be getting closer, at least in terms of a distinct turning point in the recovery of the hospitality business, where restaurant and bar operators have suffered mightily over the past year owing to restrictions undertaken to combat the pandemic.
With vaccines rolling out widely, the hope is that reopening momentum will continue and further outbreaks will be held at bay. In the meantime, the nation’s leading wholesale players are continuing to focus on the robust off-premise environment while updating their operations to compete in the new era of e-commerce, which has exploded since the start of the pandemic.

“Every state is a bit different,” says Wayne Chaplin, CEO of top-ranked distributor Southern Glazer’s Wine & Spirits. “Some markets are doing better than others. But we probably have 30,000 fewer on-premise outlets than we had a year ago. We’re hoping that by sometime in 2022 we’ll get back to a full complement of on-premise customers.” Southern Glazer’s revenues are projected to rise to $21 billion this year, representing a 34.6% share of the total wine and spirits wholesale market.

While Southern remains the biggest player, it’s not the only key wholesaler expecting revenue to increase this year. In fact, nearly all of the top 10 distributors nationwide are projecting solid growth amid an increasingly buoyant economy and better prospects for on-premise reopenings.

Second-ranked Republic National Distributing Co. (RNDC)—which is now present across 32 markets and boasts a market share of 20.3%—is eyeing sales of $12.3 billion in 2021. Third-ranked Breakthru Beverage is targeting sales of nearly $6.1 billion across its 15-market footprint.

“The spirits category continues to accelerate, especially fueled by at-home cocktail consumption,” says Breakthru president and CEO Greg Baird, who recently announced that he plans to retire at the end of the year. “Ultra-premium Tequila, mezcal, Cognac, and North American whiskey remain strong despite supply constraints in some pockets. Overall, we see premiumization continuing to accelerate across categories.”

Meanwhile, the middle tier continues to adapt to the rapidly changing nature of the marketplace, and to gauge what the new normal will look like post-pandemic. “It’s hard to overstate the impact the pandemic had on all of us in 2020,” says Tom Cole, president and CEO of Republic National Distributing Co. (RNDC). “At RNDC, we made the most of the opportunities we had before us. By temporarily shifting and sharing roles, we were able to help our customers deal effectively with the consumer shift to retail. We grew market share as our associates remained on the job and were ready to go as states and businesses opened back up again.”

Impact’s full report on the U.S. market’s leading wholesalers appears in the April 1&15 issue. Click here to subscribe.—Daniel Marsteller

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