Mega M&A Madness with Fingers’ Dave Infante

[00:00:00] Justin Kendall: Heading to CBC? Kick things off the day before The Brewbound's meetup at Love City Brewing in Philly, Sunday, April 19th from 5 to 7 p.m. Connect with beer industry leaders, grab a drink, and catch up with The Brewbound team. It's free to attend and walking distance from the convention center. Head The Brewbound.com slash lovecity.rsvp. And don't forget to catch The Brewbound team at booth 956 during CBC. Next on The Brewbound Podcast, we talk M&A madness with Dave Infante. Hello and welcome to The Brewbound Podcast. I'm Justin Kendall.

[00:00:48] Jessica Infante: I'm Jessica Infante. And I'm Zoe Licata.

[00:00:51] Justin Kendall: And this week we have a featured guest. It is Dave Infante, author of The Fingers Booze Letter. Thanks for being here, Dave.

[00:00:59] Dave Infante: Thanks so much for having me, guys. I think, what is this, four or five? I feel like I'm an SNL classic host. We owe you a blazer.

[00:01:07] Justin Kendall: Five-timers club.

[00:01:08] Dave Infante: Where's Lorne Michaels?

[00:01:09] Brewbound Podcast: I've always wanted to meet him. I wonder what his thoughts are on the state of alcohol.

[00:01:15] Justin Kendall: Let's call him up. Thanks for being here, Dave. It's been a wild few weeks in MNA here in the Bevalk industry. We've had distribution deals. We've had brand deals. We've got flirtations. I want to make sure that I say it right, because I I don't want to come off like a Rube, you know, to you, like a hayseed.

[00:01:35] Dave Infante: Yeah.

[00:01:36] Justin Kendall: Hayseed here in Iowa, Pernod Ricard and Brown Forman and flirting Firestone Walker is added to its house of brands. Constellation Brands is into hop water for real, real. And most of course, uh, as Monaco and RTD now.

[00:01:53] Dave Infante: It's a lot. It's too many deals, I think. I was thinking about doing a little merger and acquisition myself, but they got there first. So unfortunately, I had to sit this round of deals out.

[00:02:04] Jessica Infante: Who were you making moves on?

[00:02:06] Dave Infante: Brown Forman. I was going to buy Brown Forman. And I think talks broke down. So I feel like I'm able to talk and I can speak publicly about this now. But I sent them a bunch of emails and they never responded to them. So over the course of months, I realized that they were not going to sell Brown Forman to me for seventy five dollars.

[00:02:28] Justin Kendall: I'm excited because now we can do fingers. Newsletter editor says

[00:02:34] Dave Infante: He attempted to acquire Brown Forman whenever Sam Altman says they're gonna put data centers on the moon or whatever Fortune magazine just runs that as though it's the truth. You can do the same thing for Dave Infante proprietor of a break-even trade newsletter called fingers Anything I say is a headline The Brewbound tomorrow as you wish

[00:02:57] Brewbound Podcast: If Brown Forman's out, Four Loko's still on the table, Dave.

[00:03:02] Dave Infante: Honestly, Four Loko, I feel like there's a lot of what my close personal friend, Irwin Simon, might call synergy between Fingers and Four Loko. We've been circling around each other for years. It's a real will-they-won't-they situation. I think a lot of industry insiders have been placing bets on the, which prediction market is it? Polly Market? Is it, yeah, Cauchy or Polymarket? I'm sure there's a lot of action on the prediction markets of whether or not Fingers has the liquidity to make a $400 million purchase for 4Loko. I'm just, you know, I'd say wait and see. It's possible. I have been ransacking the couch cushions here in my home office, and I'm, you know, like I said, I already had $75 ready to go for Brown Forman, so I'm most of the way there.

[00:03:49] Jessica Infante: I think you could bump it up to 90 for 4Loko for sure.

[00:03:52] Dave Infante: In this economy? Have you heard of the Strait of Hormuz? It's not open. That's where 20% of the world's Four Loko comes from.

[00:04:01] Jessica Infante: I had no idea so many precious natural resources have been held up by this war.

[00:04:09] Dave Infante: Yeah, it all kind of runs through the same refinery. That tracks. Liquid natural gas there's Four Loko, and then there's Brent crude And it's just like at the pipeline right at the end before the ships it splits into one of the three like the old Remember the Simpsons like Duffbeard Duff like yes, it's all the same thing

[00:04:29] Justin Kendall: Well, those brand deals don't even cover all the distribution deals in the last few weeks. Southern Glazer is getting into the red network even more. Reyes is picking off RNDC markets. Keg One is making its own deals. It's got Pine State in Maine and New Hampshire. So we got a lot to discuss. And I mean, we've covered your M&A ambitions, but... Maybe we should just start with, why don't we start with Firestone Walker and Truman? That to me is like a sweetheart deal. That one hits me in the feels.

[00:05:05] Jessica Infante: To me, it just makes sense. Like, oh, this is so nice. So I should be more embarrassed to say what I'm going to say here, but to me, Truman was just a California brand, you know, like a nice beer we drank when we went out to California. I had no idea it was centuries old and came from Austria. silly me, but this makes sense. You know, it's Firestone Walker. It's this like revered, delicious lager. And I think these go together pretty well. So you did a great job of jumping on this story last week. What else can you tell us?

[00:05:34] Brewbound Podcast: Yeah, so the news for anyone that missed it is that Firestone Walker has agreed to what they are saying, acquire all U.S. rights to Trumer Pils from Gambrinus. So they are going to take over production of that beer and Gambrinus is going to kind of slowly wind down operations at their own Trumer brewery in California. They made it clear this is not a licensing agreement. They are fully taking over this brand in the U.S. It's to be determined what the impact is going to be on employees, but they said they are offering some positions for the folks that are affected by the Tumor Brewery at other Gambrinus operations.

[00:06:14] Jessica Infante: Dave, did you have this on your bingo card?

[00:06:17] Dave Infante: No, I don't pay a ton of attention to Tumor and I know that's maybe, I think, a little bit... East Coast bias. Yeah, East Coast bias. I know it's a very popular brand. I will say for the sake of just kind of... stirring the pot a little bit, like, I feel like this is having an outsized reaction among, like, beer people versus, like, the general population. Is Trumer that, like, well-loved that, I mean, you said beloved, like, I'm familiar with it, and I think I've probably drank it before, and I'm sure it's as good as everyone says it is, like, how big of a deal is this in terms of, I don't know, it was what, like, 25,000 barrels last year, 26,000 barrels, is that right?

[00:06:58] Brewbound Podcast: Yeah. Adding, I think they said they're adding like 24 or 25,000 barrels to their production now by adding this on.

[00:07:05] Jessica Infante: Yeah. I think it's more about what it means for Gambrinus. You know, Gambrinus used to be, it was kind of like a house of craft-ish brands before that was a thing. And now they're down to just Shiner. You know, they had Bridgeport, they had Trumer Pils think it makes sense for Firestone to kind of shepherd Trumer into, which is, what are they, what word did they use? Steward?

[00:07:27] Justin Kendall: Mm-hmm. Six times.

[00:07:28] Dave Infante: People just gotta buy shit in my opinion there no more fucking merger of equals no more We're building a collective no more. This is a next-generation platform Tell us who bought who for how much money. That's all I want to know no more joining forces Illegal prison for joining forces in my opinion But no, yeah, I mean, from the from the Firestone Walker side of things, yes, it's nice. It makes sense in their portfolio. I'm hopeful that they have success with it. I will say of all of the M&A that's gone on over the course of the past, you know, like four weeks or two weeks or whatever, this was like the most like benign and like implication free. It's like, yeah, OK, that makes sense. Like, best of luck with it. Like, you know, and we can move on, you know, or I could move on. I clocked it. I read your story about it and it's like, yeah, OK, fair enough. I do think that, yeah, the one loose end is like what this means for Gimbranus moving forward. If it's now down to just Shiner, the founder is still, is the founder still in charge of Gimbranus? No. No, he died. He died. Okay, well, he's out of the picture then. Rest in peace to him. Carlos? Rest in peace to Carlos. But yeah, so, I mean, does that continue as a going concern? Is Shiner on the block? I don't have any reporting on that, but I do think, as you guys noted, that raises the question of sort of what the future of that company is if it's down to just one. I mean, obviously Shiner's its biggest, but...

[00:09:01] Jessica Infante: Yeah. Yeah. I think it just is geographically helpful for them. Like we don't need to worry about this little offshoot brand in California anyway. Right.

[00:09:08] The Brewbound: Right.

[00:09:09] Jessica Infante: Nick Firestone Walker the CEO of Firestone Walker. He was a speaker The Brewbound Live in December and he and I just had a nice little fireside chat on stage and we kind of asked like, Hey, like you guys made a deal for Cali Squeeze five-ish years ago, anything on the agenda? And he joked that their M&A department was just him using Google. So. I'd really like to know how this all came together. What did Nick Google?

[00:09:35] Dave Infante: It's cheaper that way. That kind of rules though. Kind of like Googling like beers I might like.

[00:09:42] Jessica Infante: Breweries for sale near me.

[00:09:45] Brewbound Podcast: Yeah.

[00:09:45] Jessica Infante: And you're just like pinged with like thousands of listings. Yeah.

[00:09:49] Brewbound Podcast: Yeah. I think you're right, though, Dave, that this is like had a very big like the folks in beer had a really big reaction to it. And I think that does have to do with some of these other deals that we've been seeing of like maybe slightly scarier consolidation.

[00:10:04] Dave Infante: Right. Right. This is the only one anyone can feel good about. Yeah.

[00:10:09] Justin Kendall: I don't know if you're the Hopwater CEO, you're probably feeling really good too.

[00:10:13] Dave Infante: You feel you're fucking booming face off new tropics now that you've cashed out and you're just, you know, like everything is all good. You're on a Ashwagandha bender because you've got that Constellation Brands money. Congrats, you ran your race, you win. I will say that Hopwater, honestly, I hope Constellation Brands starts fucking spelling it Hopwater, W-A-T-E-R. You're a vowel guy, huh? Buy the fucking vowels, man, you know? Like, I'm tired of it.

[00:10:41] Brewbound Podcast: I just want them to get rid of the all caps. Just capitalize the H and I'll be happy. Yeah. I can't deal with all caps.

[00:10:47] Dave Infante: Does Constellation Brands that skill set in its core competencies or are we not sure yet? I don't know. That might be a bridge too far for them, man.

[00:10:55] Brewbound Podcast: They're trying to cut back on expenses, I think. I don't know if adding some vowels can help.

[00:11:00] Dave Infante: I mean, have you seen the price of vowels?

[00:11:05] Brewbound Podcast: So that news that we're talking about is that Constellation Brands has agreed to fully acquire now Hot Water. They already had invested in this brand, which is a non-alcoholic brand, and now they are fully taking it over.

[00:11:20] Dave Infante: It's functional. non-alcoholic and functional.

[00:11:23] Jessica Infante: I would say of all the deals this month, that to me has been the least surprising. Like, yes, duh, of course. Let's move on. Not the four of us move on, but like the world.

[00:11:31] Dave Infante: It's like an in for a penny, in for a pound situation. Like they weren't going to not buy it, right? Like they were on a pathway to acquire the rest of it.

[00:11:39] Jessica Infante: Yeah. We've seen them do this before. I think that like Austin Cocktails, RTD brand a few years ago, they had invested and then outright acquired. I'm pretty sure. I could be talking on my ass. I don't know.

[00:11:50] Dave Infante: That does not ring a bell, but that doesn't mean it didn't happen. I mean, Constellation Brands a bit of a black hole when it comes to M&A deals. And like a lot of this stuff, I mean, quite infamously in the case of Alice Point, but like a lot of this stuff just doesn't seem to pan out for Constellation. I don't know if Hopwater's gonna.

[00:12:06] Jessica Infante: It's interesting to me that they wanted to do it because it does feel like they maybe are a little bit, oh, I am right. Constellation Brands acquired the remaining stake in Austin Cocktails, a female founded premium RTD craft cocktail company in April, 2022.

[00:12:19] Dave Infante: Are you guys familiar with that brand?

[00:12:22] Justin Kendall: We're familiar with the deal.

[00:12:24] Dave Infante: Yeah, right. But like I'm saying, like, OK, like the value proposition on all this shit is like, oh, we're going to plug it into the gold network and like Reyes is going to push it and like we're going to scale. We have the it's like, well, has that happened with Austin craft cocktails or whatever it's called? I've literally never heard of this. Like you could be you could be making it up. This sounds like this sort of like van that the FBI parks at, like a fucking food festival to monitor. potential Antifa and it just has like the fake label on the side, it's Austin Cocktail Company, you know?

[00:12:54] Jessica Infante: Yeah. Dude, the next time you come on the podcast, we are going to make up fictional deals and we're going to have you pick the RTD brand. Like, are they real or not?

[00:13:05] Justin Kendall: The who he play with version of MNA.

[00:13:09] Dave Infante: Okay. But the hot water thing. So I have a take on this. My perspective on the hot water deals. Okay. Yes. Like they had to do it. They are already committed to it. I am a big faint. Like I drink hot water in my personal life. I spend my own money on it. I like the person I think is no, no, no, no, no, no, no. Not the brand hot bar. See, this is the thing that makes it so fucking irritating. Yeah, the brand hop WTR has adaptogens and other stuff in it. So I stay away from that I don't I don't want that in my life. I just drank the hoplark brand. Yeah, you buy bowels Yeah, man, I'm fucking bow forward over here So hoplark is my preferred brand, but I do enjoy a bunch of different ones Allagash has a great hop water that they were packaging I don't know if they still are but they were doing that for a little while There's a local brand here called hike in Richmond that I like so I like that Hopwater as a product. And, you know, on one hand, it's like, okay, like this is one of the big three buying in to the space. But on the other, with respect to Constellation, which has done some things very well, they do not have a great track record of entering sort of more nascent categories and helping to develop them for the rising tide lifts all boats type situation, right? Like that's not really what Constellation to my mind, is good at or has a long track record of doing. I don't know that Anheuser-Busch buying, you know, Hoplark, for example, just a hypothetical, would have been, like, that much better for the category, like, or the segment, or, you know, Molson Coors. Does Molson Coors have any stake in Hopwater? I don't think so, this segment. I don't think so. Yeah, but so like, I guess it's better than not that one of the bigs is getting into the segment, but it is not what I had hoped for for the segment, just because I want to be able to access this product more often. And like, it does need development, it needs education, it needs to borrow the buzzword stewardship from, yeah, no, sorry. Everybody's allowed one, from strategics with the resources to get distributors on board and get retailers on board. I would love to be proven wrong here, but I don't think that's Constellation.

[00:15:24] Justin Kendall: Well, Craft Brewers have tried too. Sierra Nevada, Lagunitas.

[00:15:29] Dave Infante: Athletic right and like lagunitas. I personally don't like hop. What is it splash? Is there a refresher? I'll be refresher Thank you. Hop splash is uh, this is another problem with this segment is everyone. That's alagash Yeah, hop splash. Hop splash might be them. But hop splash is uh, sierra, sierra, nevada yeah, I think alagash is might just literally be called hop water, but Too many hops. There's too many hops. But yeah, so I mean, again, like best of luck to them. But like they also haven't consolation or excuse me, hot water. WTR hasn't positioned itself in the beer aisle for the most part. You mostly see it merchandised or I do at least against in like the competitive set with like your spin drifts and your uh lacroix's and whatever which to me merchandising wise is odd but maybe that's the better opportunity there i don't know so i guess we'll see but yeah i was i was like yeah okay i mean i don't drink that brand but it's also i don't think it's going to be like a big big lift for the segment

[00:16:30] Brewbound Podcast: Yeah, it feels similar to me with what they're doing with Hayo, which they have that like stake in or investment in, which is another brand where I don't quite fully understand everything that's going on with it because it's a lot of those functional things. But it seemed to have a little bit of traction post that added money with the expansion to more retailers. I don't know. It just seems like a bit of a, hey, maybe let's try this thing. I don't know how much backing is behind it.

[00:17:00] Reyes Beverage: Yeah.

[00:17:22] Jessica Infante: So as much as there have been brand M&A going on in the past month, there's been even more distribution deals. So we have seen, basically from the second the calendar page turned to 2026, we have been basically off to the races, starting with the news in early January that the Reyes Beverage Group was about to acquire several markets from Republic National Distributing Company, RNDC. And that news developed further and expanded to being 11 markets and all of that became official official earlier this month. So that will extend Reyes's reach into several markets they weren't even in before. So that's big. In addition to that, there's been Southern Glazer Wine and Spirits, which has been picking off pieces of the red network this time, instead of being a wholly owned AB distributors. It was Claire Rose on Long Island and Eagle Rock in Colorado, which five years ago was a wholly owned AB house. And then kind of out of nowhere, we had this Keg One deal where they acquired Pine State Distributing up in me and Zoe's neck of the woods in Maine and New Hampshire. Dave, you're really good at looking at industry news through a consumer lens. What should drinkers know about all these middle tier deals that we've been seeing lately? What impact do you think this will have on just the average consumer?

[00:18:36] Dave Infante: I mean, right away, all of this stuff takes place, you guys know, so far behind the scenes for the average consumer that I think there's like a real lack of immediate interest in like any of this M&A. And I also say that because there's a real lack of interest among like mainstream media editors who I've occasionally pitched on stories like this and like, yeah, I don't really understand this. I also don't really give a shit about it.

[00:18:59] Jessica Infante: Well, it's like that meme from Arthur where like, is it like DW sees the sign? She's like, I can't read. So that doesn't apply to me. Right.

[00:19:07] Dave Infante: Yeah, exactly. But I do think, of course, this stuff applies to consumers in the longer term. I mean, Ray is consolidating or, you know, it is consolidating power in the middle tier. It's buying a bunch of word is like all of the valuable stuff rnbc still had to sell that's a big deal for smaller suppliers that are in the rnbc book wine and spirits suppliers that are in the rnbc book who are really going to have by all indications, a challenge winning the attention and interest of RBG, Reyes Beverage Group, that doesn't really operate the way RNDC or a wine and spirits wholesaler traditionally has, right? Like, I mean, there's the logistics and technical issues, which is that, you know, it doesn't do a ton of servicing of full bottle wine or spirits. So that is obviously changing. They're getting into that more. But there's also just like the basic culture like Reyes is very oriented, at least on the beer side, has been very oriented around, you know, fulfilling orders. They do not want to go out and be your like hand seller in the marketplace. They want to take the order. They want to drop the pallet. They want to move on to the next one. They're really good at that. And that works for the modellos of the world. We've heard from and I've reported on Craft Brewers that have had struggles with Reyes Beverage Group over servicing even something as basic as like on-premise accounts in California where they're very, very strong. Like they just... I'm thinking specifically of Kevin McGee, the former co-owner of Anderson Brewing Company. I reported on the lawsuit that he ultimately prevailed in over Golden Brands, which is the RBG subsidiary in California. And one of his complaints at the time, his frustrations at the time, was that they had moved to a telesales model for on-premise and just weren't really servicing at least Anderson Valley Brewing Company, and potentially based on what I was hearing from others, weren't that interested in serving craft brands on premise, which everyone who's listening to this podcast knows that craft over index is on premise. It's a very important channel. Draft is a very important channel for craft. RBG didn't comment for that column, and that was a year and a half ago. But my understanding or my reporting since, and certainly The Brewbound reporting that I've read since, suggests that the model that RBG pursues is not one that's necessarily that amenable to the sort of, I don't know, high touch discipline that wine and spirits sales has typically required, right? This is higher price point stuff, typically. It sells in full bottle, you know, 750s instead of single serve 22s or 12s or 16s or whatever. It's not nearly as oriented around the C store as beer is. So all of those things combined to be short term, very meaningless to the consumer, but longer term, I mean, based on what we know about how the middle tier is shaping up generally, I don't really see any reason that we wouldn't expect to see these deals narrow the amount of consumer choice in wine and spirits in the markets where RBG has taken over from RNDC. I mean, I published a thing in Fingers the other day based on some reporting that I had done with small suppliers who they haven't been paid by RNDC in months, so they're obviously not thrilled about RNDC, but they're also panicked about what it means to be getting transferred over to Rea. So hopefully at least these guys are pros enough to pay our invoices. But like, beyond that, I don't know, I might have to go find another distributor because it doesn't seem that they're particularly, you know, it's a wait and see for those suppliers. And as a result, like consumers that like smaller wine and spirits brands, like the discovery aspect of it, like the story, all that good stuff, you know, I think should be concerned about whether or not they'll be able to have the access to the breadth of selection that they did in the past.

[00:23:25] Brewbound Podcast: Yeah, we already know that retailers have been looking to cut down on how many things they're offering on shelves. They're looking to really clean up what has become a kind of myriad of a million different alcohol things in the past few years. And so this is The incentive to have a greater variety of options was those kind of touch points and relationships with folks to really emphasize why those brands, those smaller brands could be important and faster moving. And so if you don't have that anymore, there's not really a lot motivating them to continue to have that variety.

[00:24:00] Dave Infante: I think that's right. Yeah. I mean, like Reyes, part of the reason they've been so successful is because they have found ways to align themselves with demand on the retail side of things and with demand on the supplier side of things. They're playing that middleman role well. But they're playing it well for themselves, not necessarily for the middleman role that was statutorily envisioned, right? Like in theory, you'd want those wholesalers to be pushing retailers to take on smaller brands and to demand more attention to sort of like lower volume, higher price point stuff. And that doesn't necessarily fit into the model that Reyes has found that works for them. So if Reyes is which it is just based on this acquisition ascending to sort of the top of the duopoly between Southern Glazer and RBG. That's one less route to market for a lot of those small brands.

[00:24:58] Jessica Infante: All right, well, let's say you're a regional Craft Brewers with like, I don't know, 20,000-ish barrels sold via distro in a few states close to home. Like you're not wild, you're not Sierra Nevada, but you're not teeny tiny. What's the best case scenario for continued middle tier consolidation? Like what do you want to see happen?

[00:25:16] Dave Infante: You mean like if consolidation has to keep happening, there's no other option? There's no other option. That's a pretty funny framing. It's like, look, we all know it's going to keep happening. So what's the best type of consolidation for you? I mean, I think the best outcome for a hypothetical brewery like that is that they have a good relationship with a house that has access to capital that is doing the consolidating. I think it's likely. And of course, there are a million fucking exceptions to this. But like, I think it's typical that the brands that are with houses that get acquired are in a tougher situation than the ones that are doing the acquiring. Right. Like, yes, they're, you know, especially if it's in a strict franchise state, they don't have a lot of moves in that transaction and they have less mindshare, as they say, or they're likely to get less attention from the buyer because they're new. Even if it's a good brand and even if they're eventually able to reestablish a relationship with the incoming acquirer over time, they don't have it off the rip. So that's the first thing, right? It's just like, ideally, you luck out and you happen to be with the one doing the buying rather than the one getting bought. I mean, obviously, if you're lucky enough to live in a state or work in a state or this acquisition is taking place in a state where franchise law or franchise reform has been written to offer remedies for suppliers in the case of acquisitions like this, or you were able to negotiate that, that is another best case scenario that I don't think happens that often. That's another thing to hope for. I mean, I think from the beer side of things, specifically, you're hoping to see the rise of a challenger, if not like a, you know, no one is going to achieve the scale of RBG or even Southern Glazer anytime soon, but you're hoping to see a challenge. Like, I think there's some reason to be somewhat optimistic about the moves that keg one is making again in this paradigm where we have to accept just as a basic premise that consolidation is going to continue happening. Right. Which I'm mostly persuaded by that premise. I mean, I don't see any meaningful regulatory action coming anytime soon. You know, the Biden administration obviously had asked the Treasury Department to look at competitive practices in the middle tier, but that was, at this point, four years ago, and the Trump administration's antitrust doctrine, to the extent that it exists, seems to just be kind of, fuck you, pay us, and we'll allow a right-wing billionaire to consolidate the entire media infrastructure or whatever, as long as he's in our camp, right? Like, we haven't seen a meaningful, you know, there was a lot of talk After Trump got elected for the second time, they're like, oh, there's going to be like a right populism, you know, like, oh, J.D. Vance is like a right wing populist that's going to take on the corporations, but do it from the right. There's just no evidence of that. We haven't seen that happen at all. We certainly haven't seen it happen in the beverage alcohol space. So I think any dreams of meaningful regulatory intervention are pretty far fetched, at least in the short term. And so, yes, if that's the premise, then, yeah, I think you want to see more, you know, mid-major regional challengers that are able to pick up some of the slack and see and able to obviously make that pencil out for their businesses, pick up the slack for Craft Brewers that are maybe going to get lost in the sauce of these much, much bigger portfolios of, you know, Aureus or Southern Glazer. I mean, that's that is, I think, kind of your best case scenario. I mean, how how much is that even happening, though, guys? You cover this as much as I do. Like, I don't know. That seems pretty far fetched.

[00:29:09] Jessica Infante: What's the last time that we saw any kind of meaningful attempt to shake up this space was probably Blue Cloud and... Oh man, rest in peace.

[00:29:20] Dave Infante: All right, peace. I just love that they went for it. I don't even have much of an opinion on whether or not it was a good idea. I just love that they went for it. Craig Purser, if you're listening, you took that from me personally. I can't believe you did that to me. I don't know if Craig listens. Yeah, Blue Cloud is one. I mean, there's been like some maneuvering in Southern Cal, like I'm thinking of the Hand family, like kind of made to play. Yeah, with Sunset. So like, okay, there's some of that going on, you know, like, but that's again, it's so regional. And so you also have to hope that you're a brewery that needs distribution in one of those areas.

[00:29:56] Jessica Infante: Yeah. I mean, your worst case scenario here, I feel like would probably be. One company. Well, like in your market, it's Reyes or like an AB WOD. Right. Yeah. And that's it. And then what do you do?

[00:30:09] Dave Infante: Yeah. And like the wholly owned distributorships, are we calling them wads? Do we have to say that?

[00:30:15] Jessica Infante: We, we don't have to.

[00:30:16] Dave Infante: Okay, cool.

[00:30:16] Jessica Infante: We do. I don't know if we do that publicly or if that's just something we say to each other. I can't remember now.

[00:30:22] Dave Infante: What is the situation with wholly owned distributorships? My understanding is the sentiment is shifting around that at the mothership. Like for years, there was this idea that they just wanted out of this business. And then more recently, I feel like that's not really what they're signaling anymore.

[00:30:38] Jessica Infante: They do a little bit of both. They sold their New York wholly owned distributorship to Southern Glazer last year. But then they also picked up some cases in Washington State. So it definitely goes more of the they sell off. But occasionally they pull the man bites dog and go the other way.

[00:30:57] Dave Infante: Right. And the consent decree is expiring in what, June 2026, I want to say, so three months from now?

[00:31:03] Justin Kendall: I think it's July.

[00:31:05] Dave Infante: July?

[00:31:05] Justin Kendall: Yeah, it's summer.

[00:31:06] Dave Infante: That was like they couldn't have any more than 10% in any given market going through wholly owned distributorship.

[00:31:13] Brewbound Podcast: Yeah, but I mean, you heard Mr. AB say at the beginning of this year, he doesn't give a single thought to that. So I guess that doesn't factor in at all.

[00:31:23] Dave Infante: Are we talking about my other close personal friend, Brendan Whitworth? Yes. Oh, man. Yeah, that's right. He was too busy shivving hemp-derived THC to care about whether or not their wholly-owned distributorship business was in the right place.

[00:31:37] Justin Kendall: I'm sure somebody else is thinking about that, and then they will share their thoughts with him when July comes.

[00:31:43] Dave Infante: Yeah, right. And not a moment before. Heaven forfend he gets asked beforehand, you know? Maybe he's got the answers stuffed into sneakers.

[00:31:52] Justin Kendall: He's got some pretty cool shoes. It's sneaker closet.

[00:31:55] Dave Infante: It's got to be awesome Yeah, but also like the eagle rock thing is a funny kind of like full circle, there's this kind of like shadow wholly owned distributor network that I feel like is forming. It is obviously owned by Southern Glazer, right? They buy the New York wholesaler in, what is that, August of last year. And they picked up a bunch of volume in Southern California, not really from the wholly owned distributor ships. No, yes, some from neutral came from either the independents or the WDs in California, right? They'd had to have. The independents, yeah. Yeah. Or no, strike that. I'm sorry. I'm misspeaking. I'm misspeaking. The independents, you're right. Because the whole young distributors couldn't handle it.

[00:32:35] Jessica Infante: Yeah. Well, to me, there's like kind of like two different flavors of AB houses. There are the ones that were tried and true and only carried AB products as though they had been demanded so to do decades ago. And then there were the others that you know, did other things and carried Constellation Brands then ended up all getting Black Roses. I think there's, there's two different things. Like look at like the Sheehan Network. Like Sheehan in the Northeast, you know, before all those sales was like a super viable option for craft brands. They also sell AB products. You don't see that too many other places.

[00:33:07] Dave Infante: It had to be like a strong enough distributor owner, like literally like a culture of like the family patriarch or matriarch, but really mostly patriarch. Unfortunately. that was not buying into August Bush, the third's total mind. What was it called? Total 100% share mind, I think is what they were going for. And if you were like a strong distributorship owner that had a vision for the market and understood your market and wasn't maybe as intimidated by or wasn't as beholden to the mothership in the pre-InBev days, then yeah, you could have a more diversified business and you kind of, you know, carved your own path there. And ultimately you're set up a little bit better for the craft boom in the 2010s. And then, you know, maybe not so much these days, but like. It was good for Kraft to have more of that perspective represented within the Red Network because I think it's pretty clear that for many years, Anheuser-Busch and InBev didn't really know what the hell they were doing in the Kraft business.

[00:34:11] Jessica Infante: I mean, who did you want to be up against going out to bars? You know, Shock Top or Blue Moon, you know?

[00:34:17] Dave Infante: Right. Oh, man. Shock Top. Ah, the one that got away. But it's back. It's back, baby. The brand that will never die.

[00:34:24] Justin Kendall: It's back with Voltage. 9.6 A B V of it.

[00:34:31] Dave Infante: Boom. But yeah, so there were those houses that in the Red Network that were still, and Blue Silver was always more amenable to craft and more open to it, right? And Sam Adams had a lot of success, or Boston Beer Company, excuse me, had a lot of success moving Sam Adams through that network. the landscape is shifted dramatically and also the problem is that a lot of the pull is pulling away from Craft Brewers which you guys cover all the time but like everyone is more interested in pushing you know spirits based stuff where they can you know single serve and that does not help with any of the situation for this hypothetical, you know, small brewer that's like 20,000 barrels a year. It's like, unless you have a red hot spirits based RTD brand, which presumably you don't, it's harder to have those conversations. It's a very challenging time in the distributed Craft Brewers business right now. Extremely.

[00:35:29] Jessica Infante: I don't know that there's been a more challenging time, say, for 40 years ago.

[00:35:33] Dave Infante: Yeah, I was going to say, like, I don't have perspective on this, but some of the older heads in the business could potentially speak to this. Like, is it more does it feel more dire now than it did in like ninety three or whatever? Actually, I guess close to like ninety nine. When did the slump come? Like early 2000s, really more than the early nineties. Yeah.

[00:35:56] SPEAKER_??: OK.

[00:35:56] Jessica Infante: But then things got real hot again, like 10 years later.

[00:35:59] Dave Infante: But 10 years is a long time. It is a long time. You're right. Like you don't know that 10 years from now, it's going to be better. You got to hang on. In other words, I'm just trying to imagine like I should maybe we should go like pulling old newspaper clips or whatever. But I'm so curious. Of course, Brewman didn't exist back then. And like mainstream newspapers weren't doing like rigorous business cover. We got to pull BMI stuff.

[00:36:19] Justin Kendall: Get the microfiche out.

[00:36:20] Dave Infante: Find some old celebrators. Benj, we need the BMI microfiche. Let's get that fired up. I want to see the old physical copies.

[00:36:30] Jessica Infante: I think the difference from then to now is that back then at least you had perhaps the glimmer of hope that there were more consumers that hadn't met your product yet. Right, right. Today, unfortunately, it feels as though Craft Brewers has become almost like a punchline, at least for Gen Z content creators.

[00:36:49] Dave Infante: Well, it's the it's the wallpaper, too, right? Like it's just there. It's just, you know, it's OK. It's there. It's cool. There's nothing novel about it. And it's a victim in some ways. And you guys have all written about this. And so it's a victim in some ways of its tremendous success. achieving ubiquity in the American beer aisle over the course of the past decade and a half. And that has made it less special and made it less interesting to a new generation of consumers that has more choice than ever. So all of those things are working against the distributed craft business. And RBG or anyone would say they're fishing where the fish are, they're interested in what's working. And that's true, but You know, I'd buy that, but it's also, it doesn't leave a lot of room for a lot of craft brands.

[00:37:35] Justin Kendall: And the boutiques aren't there.

[00:37:37] Dave Infante: But the boutiques were a total fail, not a total, but like mostly a failed experiment, right? Like that, on balance, like what boutiques worked? I mean, a noble effort. Yes. Not a critique of, like, the idea. Like, the most charitable thing you could say about the craft-oriented distributorship is that the outcome was a total mixed bag, verging towards negative. I can't think of a lot of, like, great successes of boutique distributors.

[00:38:03] Jessica Infante: If stone distributing had to hang it up, I don't think there's much help for anybody else.

[00:38:07] Justin Kendall: I mean, that's probably the example, right? The example, yeah. But are we in this new era of the mega distributor then? Because you've got Reyes, you've got Southern Glazer, you've got RNDC that's collapsing.

[00:38:21] Dave Infante: Yeah.

[00:38:21] Justin Kendall: I mean, when we used to talk about Reyes in California and all the dealmaking they were doing, then it felt big. But when they're picking up 11 markets from RNDC and some of those are overlap markets, that's a different game.

[00:38:36] Dave Infante: It's a totally different game. I mean, the scale here is totally changed, right? And like, it happened, what is the Hemingway line, like slowly then all at once? Like, everyone knew that Reyes was doing acquisition to expand in California and in other markets. You guys had done a lot of reporting on this. I think the American Prospect had a great piece on this back in like 2022 or so about Reyes. So that was like a known part of the strategy and it was happening in the background and in some ways like RNDC's you know, historic collapse in California and in some of, you know, basically nationally at this point, although they're still operating, at least in theory, you know, provided this once in a generation opportunity for Reyes to just do an order of magnitude more acquisition and expansion than they'd previously been able to. It was like the same playbook. It was just this like insane opportunity that they were like, well, I guess we'll just like, become one of the biggest wine and spirits distributors in the country by virtue of the same acquisition for expansion that we did previously with beer. Like, it makes sense inside their thesis. And yeah, I mean, I think pretty demonstrably we're entering an age of mega wholesalers. There's Southern Glazer. There's Reyes. Has anyone, have you guys done like the case to case compare? Like, is there an apples to apples comparison out there yet? Or is the dust not settled enough? Who's biggest?

[00:40:07] Justin Kendall: I think Glacier's is biggest overall, but I mean, must be more states. Yeah. But where my mind goes to right now is there was a lot of reporting insights, and I think BBD did some as well about. AB wholesalers who were sort of put on notice last year. And Eagle Rock, presumably, I believe from Insights Reporting, was one of those distributors where they were doing market checks on. And this is the result of it five years after they acquired the WOD or whatever. Is this sort of the path forward now? Is AB pushing its wholesalers to sell to Glazers? And essentially, you've got a mega mega red network then.

[00:40:59] Dave Infante: Look, I don't have inside reporting on this, although anyone who works at Anheuser-Busch who hates their boss, feel free to leak to me. Don't leak to any of these guys. Leak to me, please. So I spoke with a middle tier veteran who's still in the business who requested anonymity to speak with me, speak candidly about the deal because they still had relationships in the space and are still operating in the space and couldn't afford to jeopardize them. When Southern Glazer acquired its wholly owned distributorship in New York, I spoke with this source who I've liaised with for years, and they told me, and here's a quote, that Anheuser-Busch was willing to divest a significant asset to Southern Glazer, suggests that it must have had a strong belief that Southern is going to be a partner for the future, close quote. And that's August of 2025. And I mean, look, that is not exactly Babe Ruth calling their shot. That's pretty open-ended. I will warrant that. that source turned out to be quite right, right? It was like we saw as Southern Glazer made its acquisition of the wholly owned distributorship in New York City, the concurrent pressure that AB was putting on some of the mommers and poppers out and mom and pops, not mommers and poppers. That's not right. That's weird.

[00:42:21] Justin Kendall: That's what you get at Applebee's.

[00:42:25] Dave Infante: But yeah, so at the same time that Southern was buying the wholly owned distributorship in New York, ABI is putting a ton of pressure on some of the independents throughout the red network over, I mean, the pretense was out of code Bud Light Peach or Bush Light Peach, I believe, if I'm not mistaken. Right? And like, this was always very flimsy. Like, it's like, oh no, like, are you worried about quality concerns with Bush Light Peach? Like, you're worried that people won't get the delicious peach flavor that they've come to expect from Bush Light Peach? I mean, come on, like, yeah. Yeah, exactly. You know, like, I don't doubt that there's friction within the red network, just like any other distribution network. There's always going to be push and pull from suppliers. But to my ear, it rung as a very false pretense for crewing for the reporting that that BBD and that insights. were publishing at the time, which were, you know, site checks, ride-alongs, you know, talk about the equity arrangement, the equity agreement, you know, the sort of covenant that, you know, infamously strict covenant that dictates the relationship between the wholesaler and ABI. There's ways to pursue remedies for out-of-code beer, if that really is an issue, that don't require this sort of you know, dramatic and spoiler room style, like, sweating of these distributorships. So that raised a lot of speculation, as you referenced, Justin, that there's going to be, you know, more moves on ABI's side to try to push some of these businesses to sell. And we weren't in the room for it, so I can't substantiate that. But, like, the outcome is the same, which is that One of the big distributors that ABEI was reportedly going through with a fine-tooth comb back in August 2025, or back in summer 2025, Eagle Rock in Colorado, smash cut to six months later, and they're one of the ones that's selling to Southern. So it's sort of a distinction without a difference, in my mind. ABEI, I would imagine, would never have caught to that, and I haven't gotten a chance to ask, and they don't respond to my emails anymore. I think they, I'm persona non grata in, where are they these days? Chelsea? Where's their headquarters? Somewhere in New York. Yeah, somewhere in New York. Well, if anyone's listening over there, I would love to talk. But to my mind, it's a distinction, not a difference. Because yes, I do think that, I mean, are we supposed to believe that this ends with the Eagle Rock? That doesn't seem plausible to me. Why would it? I mean, for years, the Brazilians have been like, why are we in business with this many fucking like onesie twosie distributors? Like, why can't we consolidate around a smaller set of bigger distributors? They for years have put that off, right? They, oh, no, we're not going to do that, even though that was known as their interest when they acquired Anheuser-Busch. I think Brito at one point promised not to do it. There was a lot of lip service around the idea that they weren't going to consolidate in that way or pressure for consolidation of their middle tier presence in that way. But the gloves are off. I mean, now we're what? It was 2008. So we're, help me, 18 years removed from the acquisition. The regulatory regime is about as lax as it's ever going to be. The consent decree, which isn't directly material to this, but is generally, you know, relevant in terms of scrutiny that's on the business, is about to expire. And coming off the Bud Light fiasco of 2023, Some of these smaller, or not even smaller, but independent wholesalers got a little mouthy in a way that clearly the folks at ABI did not appreciate. And I mean, this is part score settling, maybe, and part just sort of the iron-fisted will of a very disciplined organization that sees a lot of merit in economies of scale in the middle tier and is finally getting an opportunity to go to pursue it. Sorry if I talk too much, guys.

[00:46:24] Jessica Infante: No, no, no.

[00:46:27] Brewbound Podcast: Are we gonna talk about Irwin? Come on. No, Irwin's gonna have to be the next episode. I'm sure they'll have picked up multiple new things by the next episode.

[00:46:36] Dave Infante: I think he's gonna buy a pet food company. I think he's just gonna like fuck around and buy Purina by accident, you know?

[00:46:44] Jessica Infante: Oh my God, I love it. Dave, since we've spent a good deal of time kicking Craft Brewers whilst it's down, you will be attending the Craft Brewers Conference in Philadelphia. What are you interested in tracking while you are there?

[00:46:56] Dave Infante: Always, always looking for the mood, right? Like that's something that I think is pretty intangible, but I know that you guys are sensitive to it as well. It's self-selecting to some extent because anyone who's there, their business is at least doing well enough to buy tickets to be there. But I am curious to hear from individual brewers about how they are feeling about their specific business. So a lot of the conversation you hear from the top of the Brewer's Association, Bart Watson and Matt Gasiok in particular, is, and I don't think that this is untrue, is that like, you know, about half of the market is doing well. I want to hear from that half of the market because frankly, I don't that often. And I can be critiqued. I think my coverage is not beyond reproach for being perhaps a little bit more negative than, you know, the average outcome in the craft brewing industry right now. Like that's a function of the way, you know, media coverage works right like we're looking typically we're looking for conflict or whatever and success stories don't sell nearly as well as train wrecks do but i am curious to read the tone i'm also interested in like the consolidation wave has shifted so much in the last like three years towards these more, and certainly in the last 18 months, towards these more craft on craft like platforms or collectives, as we were talking about earlier in the episode. And I think we can start to ask whether any of this is bearing fruit, right? Like some of these have been around for a long enough to say like, is this working or is this not working? Some of them are unraveling. Yeah. Right. No, totally. And so that's also of interest to me is like, I want to take the temperature of how folks are feeling about that business model and whether they're exploring it and have said no to it, whether they're excited about the one they have, you know, that I think is something that is a productive use of CBC for us to try to kind of sound folks out on the future of like their own businesses, the way they're thinking out their own businesses. What about you guys? What are you, what are you going to, I mean, you guys have to pod all week.

[00:49:00] Jessica Infante: We do have to pot all week. We're going to be, we always check for the vibe and we are hosting a networking party. So that will be on Sunday, the 19th. It's going to be great plug at the very end. Dave, if you come, you will meet the man that most people think that you are. And by that, I mean, my husband, he will be in attendance.

[00:49:16] Dave Infante: We'll be in the same room so people can see. Yeah. I'm looking forward to The Brewbound Podcast. I think it's going to be great. I get such a rare opportunity to hang out with you guys. So I'm always looking forward to that. I'm going to do the like wedding crashers thing. Remember where they bring like the fake purple hearts so they don't buy their own drinks. That's what I'm going to do. I'm going to steal some valor in order to get some free Love City beer.

[00:49:42] Justin Kendall: Nice. Well, thanks for doing this, Dave.

[00:49:45] Jessica Infante: It's always a pleasure, guys. Thanks for having me on. And that's our show for this week. Thank you for listening. The Brewbound Podcast is a production of BevNET CPG. Our audio engineer for The Brewbound Podcast is Joe Cracci. Our technical director is Joshua Pratt, and our video editor is Ryan Galang. Our social marketing manager is Amanda Smerlinski. Our designer is Amanda Huang. If you enjoyed this episode, please share it with your colleagues and friends and review us on your listening platform of choice. You can find our work The Brewbound.com and we also welcome feedback and suggestions at podcast The Brewbound.com. On behalf of the The Brewbound Podcast team, thank you for listening. We'll be back next week.