In an effort “to further align” its distribution relationships in California, Sierra Nevada terminated three wholesalers yesterday: Antioch-based Markstein Sales Co., Imperial-based Alford Distributing and Milpitas-based Bottomley Distributing Co.
“Though this was a difficult decision, it is necessary for both the long-term and short-term needs of our business,” a Sierra Nevada spokesperson told Brewbound. The company “remain[s] grateful for their partnership over the years.”
Those territories will transfer to Reyes Beer Division subsidiaries, effective October 15, a spokesperson told Brewbound. The Chico, California-headquartered craft brewery does not anticipate any service disruptions.
The three terminated wholesalers are Anheuser-Busch InBev houses. Bottomley’s territory includes Silicon Valley and the southern part of the Bay Area, including the cities of San Jose, Los Gatos, Milpitas, Morgan Hill, Gilroy, Campbell, San Martin, Santa Clara and Coyote. Markstein’s territory includes Contra Costa and Alameda counties in the western Bay Area. Alford’s territory includes Imperial County in Southern California.
The Reyes Beer Division’s six California subsidiaries — Harbor Distributing (servicing Malibu to San Clemente), Gate City Beverage (Riverside and San Bernardino counties), Crest Beverage (Southern California), Allied Beverages (Hollywood, San Fernando Valley, Santa Barbara and San Luis Obispo), Golden Brands (Northern California) and High Desert Distributing (seven counties in the High Desert region) — each list Sierra Nevada’s portfolio among their respective online product catalogs.
Independent California wholesalers have been on the receiving end of so-called “black roses” from Constellation Brands (purveyor of popular Mexican imports Modelo and Corona, two of the best-selling beers in California), New Belgium, Athletic Brewing, and Diageo Beer Company in favor of Reyes for several years.
Constellation terminated Markstein in early 2022 in a move that also included the termination of Visalia-based Bueno Beverage.
In recent years, Constellation has terminated several wholesalers in California, including San Diego-based Markstein (a separate entity from Markstein in Antioch), Santa Fe Springs-based Triangle Beverage and Compton-based Beauchamp Distributing, and Los Angeles-based Ace Beverage.
These terminations have been concurrent with heightened acquisitive behavior by the Reyes Beer Division, the country’s largest beer wholesaler.
Sierra Nevada has been shaking up its wholesaler network in California as well. In July 2021, the Chico-headquartered craft brewery terminated South San Francisco-based Matagrano, Inc. A lawsuit and counter suit between the companies followed, with Sierra Nevada alleging that Matagrano “promptly embarked upon a pattern of retaliation” against it.
Year-to-date through September 4, dollar sales of Sierra Nevada have declined -1%, to $220 million, at off-premise retailers tracked by market research firm IRI. The company’s dollar share of the beer category remained flat compared to the same period last year at 0.71%.
Last year, Sierra Nevada’s volume declined -1%, to 1.103 million barrels of beer, according to the Brewers Association (BA). Its volume share of BA-defined craft beer declined -0.42%, to 4.45%. It is the third-largest craft brewery in the country by volume, behind D.G. Yuengling & Son. and Boston Beer Company, according to the BA.
Following the Sierra Nevada terminations, Markstein’s remaining portfolio includes Boneyard Beer, Brooklyn Brewery, Deschutes, Firestone Walker, Fort Point, HenHouse and Stone.
Alford sells offerings from Ballast Point, BeatBox, Coronado, Firestone Walker, Karl Strauss, Modern Times, Stone and Societe.
Bottomley carries the Heineken portfolio and Gordon Biersch.