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06/19/2020

Pace Picks Up: 12 Molson Coors Distrib Deals in 1st Half; 4 in Jun; Why? Tim Owston Speaks

Molson Coors distribs on pace to do 2x the typical number of deals in 2020.  In an avg year, MC distribs do 10-12 deals, yet INSIGHTS tracked 12 Molson Coors deals in just first half, including 4 in Jun (most reported first in our INSIGHTS Express).  Why such a stepped-up pace?  As usual, big are getting bigger, Miller and Coors-only legacy distribs still consolidating and some smaller distribs are deciding to get out. Further insight on what’s changed below from longtime former MC veep who worked on deals, Tim Owston. Deal pace in striking contrast to AB network, where we only reported 2 deals in 1st half.

Exhibit A in big getting bigger: Reyes Beer Division bought 3 more Molson Coors CA distribs in 1st half 2020. Those included just announced 2.5-mil-case deal for Elyxir of Watsonville (Ely family), 8-mil-case Bay Area Bev (Louderback) in Apr, and 700K Claypool Dist in Jan.  Reyes also bought Saccani, a 1.5 mil case Pabst/Lagunitas distrib in Sacramento. Added over 12 mil cases in 1st half 2020. Another megadistrib Columbia, added Echanis, a small OR distrib, announced Jun 4. Columbia at 54 mil cases.  Two behemoths together sell almost 200 mil cases, near half of 422 mil cases sold in CA, WA, OR. Yowza.   

In one of largest remaining unconsolidated Molson Coors mkts, Las Vegas, distribs struck a deal. Following settlement of its lawsuit with Molson Coors, Bonanza Bev sold its Molson Coors brands to Breakthru. Original deal was to sell to Southern Glazer’s, but Molson Coors sued to redirect to its preferred consolidator. Southern got all other brands, including Boston Beer in VegasIn early Jan, Long Dist (Coors) bought 3-mil-case Mims (Miller) in Raleigh/Durham, making Long an 8.5-mil-case consolidated distrib. In upstate NY, Spirit & Sanzone (Miller) sold to 3 distribs in Apr, including Austin George (Coors in Syracuse) and McCraith (Coors in Utica) as well as smaller piece to DeCrescente. 

One of more intriguing Molson Coors deals: Hammond Bev Group now has interest in 9 mil cases, after it acquired approx. 3-mil-case Buck Dist (Miller-only) in Upper Marlboro, MD. HBG formed last yr as vehicle to buy distribs. It’s fueled by capital from investment whiz Gabriel Hammond, who also owns 49% of 6-mil-case Ace Dist in York, PA. Also in HBG: Ace ceo Jeff Reeder and beer vet Randy Golden as coo. In CT, Star bought 2-mil-case Rogo, forming another 8-mil case distrib that sells about 1/3 of beer in state. Each of Long, Star and HBG 8-9 mil cases after deals. Several smaller Molson Coors deals amidst all this ramped up activity too. McCraith bought MacCadams in Plattsburgh, NY. Earlier this yr, Mark Adams sold Mark Twain Dist to Nauser Bev in Columbia, MO and Mississippi Belle Dist in IL to Haubrich Enterprises, to consolidate MC there. Each of these distribs less than 500K cases.  For smaller distribs, it’s getting to be a tuffer game. 

Former MillerCoors veep Tim Owston, who worked on distrib deals at Coors then MillerCoors for a couple of decades, provided his perspective on increased pace and some of what’s changing.  "What's changing in the seller's thought process?  Molson Coors brands historically and strategically acted as a reliable anchor.  That has consistently declined based on both the trends of Molson Coors brands and the growth of others. The impact is both real and psychological.” Traditionally, those brands were "carrying a big load," providing "certainty and reliability." But the Molson Coors portfolio "hasn’t provided the same stability that it once did." And that's where "the strategic assessment of the future gets rocked" for some multigenerational family businesses. The decision for some to stay in the business is both rational and emotional. Now with less certainty, "the influence of emotions is eroding."  Seltzers exacerbate this, because they are so disruptive that "everything is kind of vulnerable. Nothing is certain and the future is much grayer.” That said, after pace picked up in first half, there could be a "pause" in deals as distribs "build business back" post-COVID and some buyers, depending on the strategic attractiveness of an acquisition, less willing to pay same premiums in post-COVID uncertainty. Tim is now principal at beverage advisory consultant TMO Group LLC.

Publishing Info

  • Year: 2020
  • Volume: 51
  • Issue #: 12
Read 205 times Last modified on 09/09/2020