A look inside RNDC's California collapse

Earlier this month, Anheuser-Busch InBev sent shockwaves through the middle tier with its decision to move its Cutwater and NÜTRL canned cocktail brands from Republic National Distributing Company (RNDC) to Southern Glazer’s Wine & Spirits (SGWS) in over a dozen states. Including California, a crucial market and Cutwater’s home turf. I wrote about the dynamics animating this tectonic “total beverage” shift in my column last week at VinePair.

Outside the scope of that column—which mostly focused on how ABI double-hosed its independent beer distributors by passing them over for Cutwater and yanking NÜTRL off their trucks—is a question that’s been on my mind for literal years at this point. Which more or less boils down to: what the fuck is happening to RNDC in California? The second-largest wine-and-spirits wholesaler in the country has been in what looks like a tightening death spiral since… I mean, what, 2022 or so? When Sazerac said sayonara to RNDC’s stewardship in the Golden State? Since then it’s been one major exit after another there: BuzzBallz, Tito’s, Brown-Forman (B-F), High Noon, and now Cutwater. Hundreds of millions of dollars are sloshing out the door of one of the biggest heavyweights in the American middle tier, and it’s not clear why.

With RNDC’s California liquor portfolio collapse really speeding up this year, I’ve been putting this question to every source I have west of the Continental Divide. Nobody is completely surprised: the wholesaler’s service in the state leaves a lot to be desired, from what’s been described to me. And Reyes Beverage Group, to which many of RNDC’s brands in California have since departed, is about as aggressive a cross-category competitor as there is in the middle tier. That’s a tough draw for the wine-and-spirits mega-house, which has struggled mightily to make the total-beverage pivot.

Given the Golden State’s sheer size and relatively liberalized retail regulations for booze, it often serves as a harbinger for national shifts, which may be why RNDC last week announced a big investment and 100-strong hiring spree to shore up its on-premise footprint in Texas (equally if not more important than California depending on how you slice it, and a key RNDC stronghold.) But that may be too little, too late: just yesterday on the typically reliably r/RNDC subreddit, rumors surfaced that B-F is planning to pull its business from the embattled firm nationally. (Neither company immediately responded to Fingers’ request for confirmation on this.)

While “bad service” and “tough competition” may be big problems, I don’t get the sense they’re RNDC’s only big problems in California. Clearly, the company’s 2022 acquisition of Young’s Market Company (YMCO) hasn’t gelled, given many of the exiting brands wound up in the former’s warehouses via the latter’s portfolio. Per r/RNDC’s company gossip, a lot of blame is owed to corporate mismanagement, which scans with the company’s former CEO resigning earlier this year. But then again, anonymous redditors griping about supposedly stupid bosses do not a full picture paint.

I don’t have a full picture painted for you today. Frankly, I’m hoping you might have some brush strokes for me; if you have tips to share about the factors behind RNDC’s California collapse, here’s how to submit them to me securely. But thanks to the suppliers, retailers, and former RNDC employees that I’ve been in touch with over the past few weeks, I’m starting to get a better view of what’s happening inside. And it ain’t pretty.

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