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09/10/2018

Midwest a Hotbed of Distrib Consolidation This Summer; 3 Deals in 3 Weeks, 6 in 3 Mos (excerpt)

Not usual for distrib consolidation to pick up steam during summer mos, nor for so many deals in such concentrated geography. Combo of 2 trends suggests something new going on.  Three deals announced/completed in OH, MO, IA between Aug 14-31. That followed 2 deals which closed in MO and IL in Jul. Another MO deal in Jun. In each case, the big got bigger. That’s almost always most common thread. Succession issues certainly played big role, but gotta note it’s getting harder for many smaller distribs, especially in areas where they are heavily dependent on their (declining) principal supplier. Of the 6 deals, 3 AB deals, 2 MC and 1 Constellation/Pabst. And 3 MO deals in 3 mos.

Most recent deal: Ohio Eagle of Monroe will buy 1.5-mil-case Clermont in Batavia.  Ohio Eagle will be 4.5 mil cases in 2 operations. Deal expected to close early Oct.  Owner John Saputo also owns Gold Coast Eagle in Sarasota, FL, about 5.9 mil cases (including NAs). So with this deal, John will be 10+ mil cases in 2 top 5 states for AB.  Very similar in size: AB’s largest distrib in MO, Grey Eagle, just bought Soaring Eagle, about 600K cases. Grey Eagle will be around 9 mil cases in 2 states. Grey Eagle also sells 2 mil cases in IL.  Recall, Grey Eagle owned by David Stokes, son of former AB ceo Pat Stokes. In Jun in same state, AB distrib Wil Fischer (Gower family) bought 600K distrib Lueke. Wil Fischer now about 3.5 mil cases in 2 states (bought Schatz in KS 4 yrs back). Interesting that all 3 of these AB consolidators operate in more than 1 state.  In MC system, Iowa Beverage Systems (around 3 mil cases) in Des Moines will buy Fleck Sales (around 4 mil cases). Together they will be upwards of 60% of MillerCoors volume in IA. MC volume about 5 mil of their 7 mil cases. Iowa Bev Systems ceo Mike Brewington continues in role. Fleck ceo Dudley Fleck will retain a minority stake and oversee Cedar Rapids and Eldridge.  Deal expected to close Sep 30. In neighboring MO, Bluff City (Bess family) sold vast majority of its volume to Kohlfeld Dist (Kohlfeld family). So Miller and Coors portfolios come together in broad swath of territory, without much volume. Kohlfeld doubles beer volume to 1.6 mil cases. Summit bought 250K cases, will be about 6 mil cases. ... 

Publishing Info

  • Year: 2018
  • Volume: 49
  • Issue #: 16
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