Major consolidation in Northwest as three distributors merge
Do doubt that distributor consolidation with accelerate with the pending Miller Coors joint venture and speculation of an InBev takeover of SABMiller or Anheuser-Busch. Accelerate you ask? Hasnít it already been rampant? Yes it has and yes it will accelerate.
Another popped on Monday.
Portland-based Columbia Distributing Co., Portland-based Mt. Hood Beverage Co. and Medford-based Gold River Distributing announced that they plan to merge their beer and nonalcoholic beverage distribution businesses in Oregon and Washington, following approval from their respective suppliers. The merger will not include their wine distribution businesses, which will remain separately owned. John Klein will remain as president of Young's Columbia wine company.
The new organization, which will be named CoHo Distributing, will have annual sales of more than 35 million cases of beer and nonalcoholic beverages. It will operate out of consolidated facilities in Seattle, Everett, Portland, Eugene, Medford and Bend. In addition, the Mt. Hood Beverage operations in Yakima and Kennewick in Washington will be included in the merged company effective January 2009.
The company's headquarters will be based in Portland. CoHo Distributing will remain principally owned by the combined existing ownership of the Agnew and Lytle families, the families of Ed Maletis and Ron Fowler and the principals of Endeavour Capital.
Steve Lytle, current president and CEO of Mt. Hood Beverage, will serve as chairman of the board. Gregg Christiansen, current president and CEO of Columbia Distributing, will serve as president and CEO of CoHo Distributing, reporting to the newly formed CoHo board of directors.
Mergers More announced!!!!
For smaller brewers the fallout from all of the mergers and acquisitions could be tough
In the Pacific Northwest we are already seeing the effects, with one merger complete and one announced. The first was in Boise Idaho with the Merger of Spirit Distributing and Coors Distributing forming Idaho Distributors, the next to merge will be Columbia Distributing and Mt Hood Beverage along with Gold River of Bend Oregon this will form one of the largest Distributors on the west coast they have now announced that in October the purchase of ADCO( Alaska Distributing Corp) will complete, with this acquisition CO-HO will be the largest single distributor in the west .
What does this mean to the small craft Brewer that distributes? The effects are already starting to be seen, as the distributors get bigger they tend to concentrate on the larger more well known brewers, with some small breweries being dropped and left to try and find a new distributor or just disappearing from the market. Trying to jump ship before a merger happens is hard, as what small distributors carrying only craft beers out there are either very busy or inundated with breweries looking to change.
With Inbev to take over Budweiser what will happen to the Bud distributors that do carry a few small craft brands; will they be forced to drop them in favor of the InBev products? I am not a big fan of AB, so Inbev can have at them, because if AB had the chance to shut you down or out a market they would take it, they are already proving it with their fake craft brews now.
All of this is going to hurt 2 groups of people the small craft brewer and the consumer, the small brewer because his brands may no longer be pushed and the consumer because the choices are now going to be limited to what the distributors want to push. Combine all this with the hop shortage and the rising costs of malt and shipping and it could very well be a recipe for disaster for the small brewer.
Of course this is just my 2 cents worth in 3 years I have managed to cover 5 states with distribution . I would defiantly not want to be a startup trying to get going or a brewery just trying to start widespread distribution.
I post something about the consolidation a few months ago with no response. I think it will hurt brands trying to establish themselves, ones without lots of marketing capital. In general there will be less access to the market if there are fewer distributors.
just my $.02
Landmark Beer Co.
contract brewer and small dist.