Wholesaler Consolidations in NY and Colorado: Wright Beverage Buys Certo Brothers; KEG 1 Acquires RMC

Although the pace of dealmaking among breweries has slowed in recent years, consolidation in the middle tier continues, as wholesalers in New York and Colorado recently struck deals.

In New York, Buffalo-based Certo Brothers Distributing has sold to Wright Beverage, according to a report in Buffalo Business First.

An announcement of the sale was posted to the Certo Brothers’ Facebook page on Sunday. The deal is expected to close on January 10. Financial terms were not disclosed, and calls for comment to both wholesalers were unreturned.

The Facebook post assured accounts that Certo plans to conduct “business as usual” until the deal officially closes.

“We are confident WBD will continue to provide you with the same level of exceptional customer service and quality products that Certo has provided over many years,” the announcement said.

Both Wright Beverage and Certo Brothers are MillerCoors wholesalers. Wright’s other suppliers include Heineken USA, Constellation Brands, Boston Beer Company (Samuel Adams, Truly Hard Seltzer, Angry Orchard, Twisted Tea), Mark Anthony Brands (White Claw, Mike’s Hard Lemonade), Sierra Nevada and D.G.Yuengling & Son, according to the company’s website.

Certo Brothers carries more than 180 craft brands and 65 imports in their portfolio of beer, wine and spirits, according to the company’s Twitter profile. Brands promoted on their social media sites include Sierra Nevada, Southern Tier, Ellicottville Brewing, Truly Hard Seltzer and Mike’s Hard Lemonade.

Certo Brothers, which was founded in 1912, employed about 200 workers at its West Seneca, New York-based facility, according to a report in the Buffalo News. Eighty-two employees of the wholesaler’s warehouse staff belong to the Teamsters Union Local 264. Wright employs nearly 400, according to the Buffalo Business First report. It’s unclear from reports whether Wright will retain Certo’s employees.

Wright Beverage serves 11 counties in western New York, with warehouses in Rochester and LeRoy, and sales offices in Buffalo and Seneca Falls, according to the company’s website.

Meanwhile, in Colorado, RMC Distributing announced Friday that it had sold to KEG 1, a network of wholesalers across 11 states. Specific financial terms of the transaction were not disclosed. The deal is expected to close in January.

“The ownership decided it was in the long-term best interest of RMC to sell to KEG 1, so we’re excited about the opportunity and the future,” RMC general manager Duane Dupree told Brewbound.

RMC’s owners — Bob Ariano, Pete Betka, Dave West and Mike Pfalmer — didn’t have younger family members interested in taking over the business in a generational transfer, so the sale made sense, Dupree said. He added that local leadership would retain their roles. Pfalmer, the grandson of RMC’s founder, will remain with the company as its president.

Colorado Springs-based RMC, which sells about 4 million case equivalents each year, carries brands from MillerCoors, Constellation Brands, Boston Beer, Mark Anthony Brands, Diageo and New Belgium. RMC serves 1,800 accounts in a 15-county territory that includes Colorado Springs and Pueblo.

Durpee said no layoffs are anticipated as part of the deal.

“Not in the least,” Dupree said. “It’s all about growth.”

Attempts to reach KEG 1 for comment were unreturned.

On average, two to three beer wholesalers consolidate each month. In 2018, 27 distributor deals were completed, up from 23 deals in 2017, according to advisory firm Ippolito Christon & Co.

Lester Jones, chief economist at the National Beer Wholesalers Association, a national trade group for distributors, said that this activity aligns with business trends across all three tiers and called it the “natural evolution of the industry.”

“All businesses need to evolve and change, whether it’s the brewing tier that’s evolving and changing, the distributor tier or the retail tier,” he said.

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