Wines Vines Analytics estimates there are now just 1,200 distributors in the US compared to 3,000 in the mid-1990s. In 2016, Southern Wine & Spirits merged with Glazer’s to create the nation’s largest alcohol distributor. This year, Republic National Distributing Company (RNDC), already the second largest, announced a merger with Young’s Market, not long after RNDC’s merger with Breakthru Beverage fell through. With a couple of big players at the top and a whole lot fewer distributors overall, the wholesale tier of the US wine market is consolidating.
Smaller distributors are feeling squeezed, but their virtues are becoming more apparent thanks to two contrary trends. One is the huge number of wine brands in the market. “There are around 200,000 wines available in the US,” says Jon Moramarco, editor and partner at the market research company Gomberg, Fredrikson & Associates. “Consumers have untold choices.”
At the same time, the restaurant industry is changing. Moramarco says Commerce Department data shows full-service restaurants growing about 5% annually, whereas the publicly traded restaurant companies are reporting a plateau. Several larger chains have announced closures recently; Del Frisco’s Steakhouse, for example, closed several locations last year and has no plans to open new locations this year or in 2020. To Moramarco, these two points suggest the growth in full-service restaurants is in independent, local restaurants. With diversification at the winery and retail ends of the supply chain, smaller distributors are well-positioned to unclog the bottleneck at the wholesale level.