Hand Family Companies’ (HFC) Sunset Distribution subsidiary is adding another piece to its growing craft footprint in California with the acquisition of Scout Distribution in Los Angeles.
Scout employees were informed of the deal this morning. The deal follows Sunset’s late March acquisition of Stone Distributing and Classic Beverage in Southern California.
HFC president and CEO J.R. Hand told Brewbound that the transaction will add around 1.1 million cases to Sunset’s business, around $35 million in revenue and around 5,000 SoCal retail accounts. He added that Scout’s portfolio will add “continuity” to Sunset’s book due to several of the brands in Scout’s portfolio being part of the Classic purchase. Additionally, Sunset and Scout already share a warehouse, easing integration.
Scout’s Arizona branch, as well as its joint venture in Idaho with Columbia Distributing, were not part of the transaction.
Scout was already interconnected with Classic. In September 2022, Scout acquired Classic’s bev-alc portfolio in the Greater Los Angeles area. In June 2023, Classic acquired 1 million cases from Scout in San Diego.
Scout Distribution launched in California in 2018 as an independent distributor.
“The decision to sell was not made lightly,” according to a press release. “However, several evolving factors led to this transition. Increasingly complex labor laws in California, along with rising operating costs – particularly in fuel, insurance premiums, wages, and utilities, have made it increasingly difficult to scale further while maintaining the personalized service that Scout is known for.”
The companies added that Scout saw an avenue to provide its suppliers “with greater infrastructure and broader market access” in Southern California and Sunset offers “the scale, systems and experience necessary to support these brands at a high level – while honoring the independent spirit that has defined Scout’s culture since Day One.”
Scout co-founder and CEO Jeff Hansson said in the announcement: “We are incredibly proud of the growth Scout has seen over the last six years. But it’s time to hand the baton to a company that can take our brands and our people to the next level. We feel strongly that company is Sunset Distributing.
“This acquisition is more than just a business transaction – it’s a continuation of a shared vision, we have built something truly special at Scout, and we trust Sunset to carry that legacy forward.”
Hand added: “Sunset’s acquisition of Scout is another meaningful step in Hand Family Companies’ vision of reshaping the Southern California beverage market. Jeff and his team have amassed an amazing book of relevant brands, and we are excited to create uniformity for these brands across the entire Southern California market with this acquisition.
“Scout and Sunset have a shared vision of bringing wonderful brands to retail in a meaningful partnership with our suppliers and we look forward to executing on that plan”
Scout’s portfolio in LA includes Calicraft, Drake’s, Fort Point Beer, Harland Brewing, HenHouse Brewing, Karl Strauss, pFriem Family Brewers, Topa Topa and Trumer, among other local and national craft brands and import labels, including the Duvel USA portfolio.
The creation of Sunset via the Stone and Classic acquisitions took Hand’s total case sales volume to more than 50 million cases. HFC, a multistate independent Anheuser-Busch distributor, operates existing branches in Illinois (Lakeshore Beverage), Kentucky (Bluegrass Beverage) and Tennessee (TriStar Beverage).