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Trio of deals within a 24-hr span late last week flagged further convergence of beer, wine and spirits distribution, continued upheaval in wine and spirits distribution, and a battle of giants between the two largest alcohol beverage distribution companies, Reyes Beverage Group and Southern Glazer's Wine & Spirits, that will ripple out to all bev sectors including NAs. Among the deals, Southern Glazer's is acquiring diverse beer house Eagle Rock in Colo, taking over a second market once operated by an Anheuser-Busch corporate-controlled branch, creating uncertainty for extensive portfolio of NA brands wielded by Eagle Rock including Liquid Death, Good2Grow, Culture Pop, Essentia and Eternal Water, per website listing. Recall, Southern stepped in to take over A-B's NY branch last year, which sent Liquid Death fleeing to NA house Big Geyser, among other NA brands put into play, then just a week ago acquired contiguous indie house Clare Rose, itself with broad array of non-alcs that now may rethink their go-to-market plans in populous Long Island market. Eagle Rock, owned by Economos family, is 13-mil-case nearly statewide A-B distrib that also sells Sazerac portfolio and many other brands including the NAs. Eagle Rock operates a wholesaler in Georgia that's not included in this deal. In Colorado, Economos family bought what was then an A-B branch in 2020, spent heavily on new warehouse and revamp of existing one, and picked up significant new suppliers like Sazerac. But last Jun, as our sibling letter Insights Express extensively chronicled, A-B sent an intensive market evaluation team to Colo, prompting rumblings that it wanted its partner out. Nine months later, this sale is result. When SGWS' 3 Bud deals close later this spring, it will have bought about 22 mil cases from the 3 distribs, giving it close to 35 mil cases in beer in total. SGWS already is largest wine & spirits house in US.The frenzy of deals on Fri was capped off by deal announced that night by which Reyes Beverage Group and struggling wine & spirits giant Republic National Distribution Co signed purchase agreements for RBG to purchase RNDC's ops in Ariz, Colo, Fla, Hawaii, Louisiana, Md, Okla, SC, Tex, Va and Washington DC. So that previously announced blockbuster deal now is official, with closing occurring as early as late May. "Upon completion of the transaction, this will be RBG's largest acquisition to date," release said. (That's geographically.) RBG has indicated that it "plans to run the newly acquired businesses separately from its current operations," tho its stewardship of beer distribs in 7 of these 11 markets undoubtedly will yield synergies.While still subject to regulatory approvals and other closing requirements, transaction will be the capper (so far) on RBG's remarkably rapid transformation into a major player in wine & spirits distribution. "This acquisition reflects our commitment to always evolving our business," said Reyes Holdings prexy Jimmy Reyes. "Our team is built to execute and win in this space." Keep in mind that Reyes has maintained nuanced stance on NA brands, viewing category warily due to brands' flight risk that doesn't occur on beer side given franchise requirements there, but also winning role some years back as major Coca-Cola bottler with full franchise protection. Despite its reservations, RBG's beer operations seem to have been steadily opening up to non-aligned NA brands as well as those wielded by core suppliers like Molson Coors.As noted, the RBG signing was one of three major developments Fri that signal all point to convergence of beer, wine & spirits distribution, broader upheaval in wine & spirits distribution, and battle of giants between the two largest alc beverage distribution companies, Reyes and Southern Glazer's. First, Pernod announced it would move from RNDC in 8 states + DC, going to SGWS in some states, RBG or Johnson Brothers in others. Then, at end of business day, an earthquake hit as Eagle Rock said it would sell to Southern Glazer's. As noted, this deal solidifies SGWS' position as a major player in beer distribution. And later that night RBG made its big RNDC deal official, confirming that RBG will be a force to be reckoned with in wine & spirits distribution. All these trends have been developing for a while. But this trifecta of events on same day all point in same direction, announcing that the future has arrived.

ANALYSIS: Distribution Landscape Shifting as Megadeals Spell Further Convergence; Another Reyes/RNDC Deal, Southern Glazer's Acquiring Bud House Eagle Rock in Colo, Pernod Big Brand Move

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