Interview, Part 1: Nick Mehall, President And CEO, Republic National Distributing Co.March 7, 2022
Nick Mehall joined Republic National Distributing Company (RNDC) as CFO in 2017 after previously serving as SVP of finance for Diageo’s U.S. and Canada spirits business. Prior to Diageo, he spent nearly 10 years at KPMG, LLP in Cleveland, London, and New York City. Effective February 1, Mehall was promoted to president and CEO of RNDC, the nation’s second-largest wine and spirits distributor with revenues of $12 billion and a footprint of 38 U.S. markets. SND executive editor Daniel Marsteller recently spoke with Mehall to discuss his vision for the future of RNDC.
SND: How has your career in the drinks business to date prepared you for the challenge of leading one of the middle tier’s biggest players?
Mehall: I’ve had an opportunity to work on the supplier side with Diageo and then spent the last five years with RNDC, a period through which we’ve seen substantial growth. That perspective gives me a unique sense of what’s important to both the supplier and wholesaler sides. It allows us to have deeper conversations with our partners, not only about what the next 30, 60, or 90 days need to look like, but also more strategic conversations about what’s driving growth, where we’re investing as an organization, and how we continue to be that distributor of choice. That’s ultimately my goal.
SND: How are the wine and spirits categories performing overall as you look across RNDC’s expansive footprint early in 2022? How do you expect the year to play out?
Mehall: We had a good close to 2021. It was definitely a softer start to this year, which does create some pause. It’s really the impact of the Omicron variant that we saw through the holidays and into the new year. But we started to see those trends turn around in February. Higher-end, premium spirits as well as premium wine are continuing to see strong growth. What’s under pressure is the sub-$15 wine category. As we look nationally and move through the back end of the year, we’re bullish about the impact of the on-premise reopening. It could be a slower reopening if we’re potentially working through more variants, but we’re optimistic about a strong resurgence in the on-premise that will help continue our growth. It’s not only about accounts reopening, but also being adequately staffed. There’s been a significant amount of turnover in the on-premise, so we’re focusing on educating about the brands in our portfolio and getting back to the level of strength we had pre-pandemic.
SND: RNDC added 10 states via the joint venture with Young’s Market and the Underwood family in 2019, and then entered Illinois, New York, and five new control states in 2021. Is the expanded footprint paying off?
Mehall: We’ve been on a very aggressive plan to expand our footprint. If you look back five years, we’ve been the fastest-growing major distributor in the industry. It’s been a concerted effort around building out and integrating that footprint across the country. Two years ago we moved into the West through our partnership with the Underwood family. That’s been a great success. The integration efforts have been on track, and we’re continuing to make progress building the business, with California at the heart of it. We’ve made some big investments not only in people and infrastructure but also integration so that we’re one wholesaler across the entire U.S. Beyond the West Coast, we also announced our entry into Illinois with Heritage, and we’re looking to close our deal with Opici to enter New York in Q2. We’ll leverage the infrastructure that we have centrally within RNDC to bring new capabilities into those markets.
SND: How are growth prospects in those newest markets, Illinois and New York?
Mehall: We’re extremely excited about the progress we’ve made in Illinois, the partnership with Heritage. It’s a time-tested organization that’s been in the marketplace for 41 years. It gave us a jumpstart to understand the marketplace, the market dynamics, as well as the customers, so we weren’t starting from scratch. We also just opened a new 350,000-square-foot facility to serve the entire state. The partnerships in both New York and Illinois allow us to accelerate our overall plan and be a viable option in those markets, combining our partners’ local knowledge and legacy routes to market with the national expertise and comprehensive solutions that RNDC brings across the broader footprint.
SND: Is further expansion into more markets likely in the near term?
Mehall: M&A will continue to be a key component among our strategic imperatives at RNDC. We continuously evaluate new opportunities as we think about how to be the best option for our supplier partners, and how to best service the marketplace for our customers. Specifically for the national accounts, we want to make sure we’re able to do business anywhere they’re operating.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.