Anheuser-Busch InBev has struck a deal to sell its Oakland, California-based wholly owned distributor to two independent wholesalers, Markstein Sales Company and Matagrano, Inc.
Financial terms of the deal, which is expected to close July 29, were not disclosed.
“The strength of our wholesaler system is a critical element as we drive to deliver industry innovation and growth, and that includes both our industry-leading independent wholesaler network as well as our Anheuser-Busch facilities,” A-B chief commercial officer Kyle Norrington said in a press release.
“Anheuser-Busch’s owned distribution operations are a competitive advantage as they help us to develop future leaders, to test, pilot, and learn in the market, and ultimately to become better partners to our independent wholesalers and retail customers,” he continued. “We are pleased to transition our Oakland operations to two strong wholesaler partners, and we look forward to working together to accelerate our momentum in Northern California.”
Antioch-headquartered Markstein will sell A-B products in Oakland, while South San Francisco-based Matagrano will sell the portfolio in northern Santa Clara County and San Jose. Both distributors will maintain their current warehouse operations.
The added territory is a boon for Markstein, which received a termination notice from Constellation Brands earlier this year along with Visalia-based Bueno Beverage Company. Together, the two sold about 4 million case equivalents of Constellation products (Modelo, Corona, Pacifico).
“As a woman-owned, family-owned business with 102 years of local experience, we are proud of our long-term partnership with Anheuser-Busch as they continually demonstrate a willingness to support and work with their independent wholesalers as true partners,” president Laura Markstein said in the release. “We appreciate the opportunity to integrate Anheuser-Busch’s Oakland territory and members of its workforce into our operations and to continue bringing Anheuser-Busch’s leading portfolio of brands to our retail customers in this large and diverse community we call home.”
AB ONE Oakland joined A-B’s wholly owned distributor division in 2015, when it was acquired as Horizon Beverage from former owner Ces Butner, who now owns Speakeasy Ale & Lagers. A-B sold the Oakland distribution facility in May 2020 to Westcore Properties, an industrial real estate developer, for $40.5 million, according to CoStar.
That sale was the first in a string of deals AB ONE engaged in during the summer and fall of 2020. In July 2020, it swapped territories with Heimark Distributing in Southern California. In September 2020, A-B sold its wholly owned Colorado branch to Norcross, Georgia-based Eagle Rock Distributing. Two weeks later, A-B acquired Los Angeles-based Ace Beverage. A-B named Anson Frericks president of AB ONE last fall.
The moves are part of A-B’s “ongoing efforts to ensure the strongest possible route-to-market and the highest level of services for its retail customers across the different markets in which it operates,” according to the release.
“Over the last several years we have worked to structure our organization to drive growth and create value for our customers, consumers and communities,” A-B VP of business and wholesaler development Bob Tallett said in the release. “Northern California is an important market, so it was critical for us to find trusted partners that have a clear vision for this business. We will continue to work closely with Markstein and Matagrano to prioritize Anheuser-Busch employees and ensure a smooth and efficient transition.”
In addition to A-B products, Markstein’s portfolio includes offerings from Firestone Walker, Sierra Nevada, Lost Coast, Shiner, Deschutes and Fort Point. Matagrano’s portfolio includes offerings from Stone, Heineken USA, Firestone Walker, Deschutes and 21st Amendment.
A-B also operates AB ONE branches in Southern California, Oregon, Washington, Oklahoma, Ohio, Massachusetts and New York.
During Beer Business Daily’s Beer Industry Summit in January, North American zone CEO Brendan Whitworth noted that AB ONE branches at the time accounted for about 7% of the company’s volume.
A-B is limited to shipping no more than 10% of its volume through AB ONE, so the sale of AB ONE Oakland will drive that number down. It was as high as 9% in 2016, according to a letter the National Beer Wholesalers Association (NBWA) sent the Department of Justice (DOJ) to comment on the proposed A-B/SABMiller merger. At the time the NBWA called into question the veracity of A-B’s self-reported volume flowing through its own network.