Two craft-centric distributors in New England have finally joined forces, 10 months after sending letters of intent to their supplier partners.
Craft Collective and Homegrown Distribution have merged to form Craft Collective Homegrown Distribution (CCHGD) with statewide coverage in Massachusetts and Rhode Island, the companies announced today.
The union of both craft-dedicated distributors will join more than 80 beer brands, 50 wine brands and “many dozens of rotational brands within the craft beer category, several dozen adult non-alc brands and a handful of spirits brands” into one portfolio, a spokesperson told Brewbound.
Every brand Craft Collective and Homegrown represents has agreed to remain with the newly combined entity, CEO Adam Oliveri told Brewbound.
“We’re proud of the fact that everybody is coming over,” he said. “I didn’t anticipate that. In other words, I thought that there would be some who would use this as the opportunity to ask if we can part ways. And that wasn’t the case.”
CCHGD’s portfolio includes standout New England craft brewers Bissell Brothers, Widowmaker, Mast Landing, Schilling, Lone Pine and Proclamation, according to a press release. Its beyond beer offerings include High Limb Cider, Hudson North Cider, Cape Tide Hard Tea and Boochcraft Hard Kombucha, according to CCHGD’s website.
Oliveri and CCHGD chief sales officer Bryan Ferguson founded Craft Collective in 2015. Brian Murphy, COO of the combined organization, founded Homegrown in 2018 as a craft-centric offshoot of Massachusetts Beverage Alliance.
The new entity operates from two facilities – Homegrown’s 40,000 sq. ft. warehouse in Bellingham, Massachusetts, on the Rhode Island border, and Craft Collective’s 15,000 sq. ft. warehouse in Warwick, Rhode Island. To prepare for the merger, Craft Collective wound down operations at its former facility in Stoughton, Massachusetts, southwest of Boston, which resulted in several operations and warehouse employees opting to leave the company.
“Unfortunately, the commute to Bellingham is too long for it to be reasonable, and there’s no shortage of jobs in that region for this kind of work,” Oliveri said. “Most of them decided that they didn’t want to accept an appointment, even if we had a job for them, at the new company.
“But the unfortunate reality is there was about a 20% reduction in staff,” he continued.
Before the merger, Craft Collective’s staff numbered about 80 employees. CCHGD’s staff is slightly larger than 60 employees.
With the combination of sales teams, CCHGD is able to optimize each rep’s territory to cut down on travel time and maximize time spent with retail accounts. The merged company serves about 4,000 retailers across both states, a spokesperson said.
“You’ve got a machine that’s going to be more capable of spending that amount of time with the retailer that’s necessary in order to represent the entire portfolio effectively,” Oliveri said.
He pointed to one Massachusetts-based sales rep whose geographic territory was reduced by half and his account base was cut by one-third.
“His windshield time goes way down, and he can fit in these visits to these customers and make sure that that relationship is firmly established,” Oliveri said.
CCHGD’s brand management team has increased headcount to four, where Craft Collective on its own only had one brand manager.
“The suppliers ought to expect that we will have the resources to be able to effectively launch new products, execute on sales initiatives for seasonals or core brands – not to say that we weren’t able to before, but now our capability of doing it has increased,” Oliveri said.
However, adding new beer brands is not a priority for CCHGD, especially given craft’s challenging climate.
“We’re not focused on trying to expand the portfolio right now, particularly in beer,” Oliveri said. “But one of the things that we’re doing through this transaction is specializing a bit more in our category coverage.”
CCHGD has added category managers to cover wine and adult non-alcholic (NA) beverages, which includes NA beer, wine and spirits, as well as ready-to-drink (RTD) cocktails and hemp-derived beverages. The company plans to hire a spirits category manager this spring, Oliveri said.
CCHGD sells hemp-derived beverages in Rhode Island, but not in Massachusetts, which has stricter regulations.
“You now see more and more states taking a proactive regulatory approach to hemp beverage, and it usually falls into one of four categories, to either ban it somehow, or sort of functionally ban it,” Oliveri said. “Another is to say ‘OK these products are available on the dispensary channel only.’
“A third is to lightly regulate it, put some framework up for regulation in place,” he continued. “And then the fourth – which I think is exciting for our industry, and I think because it should be exciting for the hemp beverage industry – is to bring the products more fully into the three-tier system and regulate them like alcoholic products.”
Rhode Island is moving toward the fourth approach of having hemp-derived products move through the three-tier system, he said.
“We hope to bring Massachusetts into that conversation in this next legislative session,” Oliveri said. “Massachusetts is different than any of these other markets in that these products aren’t available in the liquor channel.”
Mergers and acquisitions have been a running theme in New England in 2024, in both the supplier and distributor tiers.
In January 2024, major spirits distributor Martignetti Companies closed on its acquisition of Taunton, Massachusetts-headquartered Quality Beverage, which sold both craft and Anheuser-Busch InBev (A-B) products. In August, Quality acquired A-B’s wholly owned Boston-based branch.
Last week, the leaders of the parent companies of Boston-based Harpoon and Hampton, New Hampshire-based Smuttynose announced they had merged to form Barrel One Collective, a platform that includes 14 craft and RTD brands. The combination is poised to make Barrel One the largest craft brewer in New England, nudging Framingham, Massachusetts-based Hendler Family Brewing Company (HFB), the parent company of Jack’s Abby Craft Lagers, out of the top spot.
In 2024, HFB acquired Worcester-based Wormtown Brewery in April and Everett-based Night Shift Brewing in October.
In November, Woburn, Massachusetts-based Lord Hobo Brewing and Portland, Maine-based Lone Pine Brewing merged with the backing of private equity firm Valterra Partners as the principal investor behind the new ownership group. The rollup plans to add more brands in the future.