Republic National Distributing Company

... um, for Brown-Forman that they had to win in Louisville and this entire state of Kentucky.

And, and we've taken that baton away from RNDC, and now we've run with it.

And inside of one year, we will, we will have been, you know, we will have hit, um, all of the goals that we were given, um, from, from the first 12 months.

So this wasn't like, "Hey, we'll, we'll get there in three years, and we'll be better." This is, "We're gonna continue to do better for that, that business." In Ohio, we're now the second-largest broker.

And, and if you have a single entity driving it, some would argue that the best way to see, be a sustainable business is to be the most profitable one, right? Um, I would argue there being good to your employees and other things are also important.

But, uh, that then breaks it down into, like, you guys aren't a single interested party, right? You are these collection of, of, of organizations which can offer its own, like, you know...

Does that then mean that there are opportunities for you guys to be less efficient, be less ruthless in becoming more profitable so that you can then, like, be alive in 25 years, right? And we're seeing right now a company, uh, with great legacy, RNDC Today, uh, the day of recording, uh, news broke that they filed for Chapter 11 bankruptcy, right? And, and, uh, one of the big complaints that I've heard in the market is like, well, who owned it? Who was responsible for making decisions at that company, right? And so, uh, and, and, you know, the, the ownership has passed down generations, and so now instead of having nine owners, you have 80 or whatever.

I don't know how many there are.

And then the other big news this morning... is that Constellation is apparently terminating Molson Coors-owned Coors Distributing Company in Denver, where we estimate there are like 5 million cases of CDCs, 13 million cases overall.

And as you know, it's a little bit of a surprise, but also a little bit not, because once Reyes entered the Colorado market when they bought RNDC, we thought, hmm, there's a lot of A lot of suppliers that are going to defect to Reyes potentially, right? Even though Constellation has not said that Reyes is their successor or successor distributor.

But I would be shocked and flabbergasted if that's not where Constellation ended up.

So changes in the middle tier, right?

How many regions or states are you in right now?

So currently Illinois being our backyard, obviously that's our number one market being distributed through Simple Farmer, which is a very small mom and pop, same sort of stay small, non-corporate and like sort of a vibe and Indiana, but through RNDC, which as you guys know, RNDC kind of I don't know what's going on with them, so

we're

working that out.

So if you're the brown foreman and you're looking at this, you're like, hey, this could damage my family's namesake.

Look at what happened to RNDC.

We already talked about that.

They wanted to go out and buy young so that they could expand their footprint because they thought there was going to be you know, cost cutting measures and synergies that they were going to be able to bring to the table.

The retailers are having their own challenges and The distributors and wholesalers are having many challenges.

Look at RNDC a couple weeks ago, right? They've filed for bankruptcy and left a lot of folks in the lurch who are making beverages.

There's a lot of pressures around accounts payable that people are dealing with.

And then, you know, the pain is when Then the ball corporation tells you that cans are going up by 10% again.

Brown Foreman and Pernod Ricard report declining sales, RNDC is leaving Georgia, and Heaven Hill is partnering with UK Athletics.

Those are just a few of the 15 bourbon industry news stories we're discussing on this week's Bourbon and Distillery News.

Hi, everyone.

And they have been active.

They have gotten involved and negotiated some changes to how the plan will work.

I'm going to come back to that in a minute because RNDC also asked to file what we call de minimis assets.

They've got sort of stranded inventory that they can't sell, that the buyer for that territory didn't want or whatever.

The court has approved a process for that, and they filed one of these reports of sale on August the 29th.

And that created an incredibly powerful middle tier.

so if you owned a whiskey company and you you could make maybe the greatest whiskey in the world but in most states you still needed a licensed wholesaler with warehouses trucks sales people and relationships with retailers to actually get the product into consumers hands and for decades there were a handful of gigantic distributors that accumulated enormous power in this system and one of the biggest was republic national distributing company also known as RNDC.

And at its peak, RNDC was the second largest wine and spirits distributor in the country.

It was operating in about 40 states.

It had about 2000 suppliers that represented and it had 170,000 customers and it was moving roughly 390,000 cases of alcohol every single day.

But almost everybody still needed a distributor and RDC controlled access to retailers across America.

a huge portion of the United States.

If anything, it seemed like suppliers needed RNDC more than RNDC needed any individual supplier.

They're focused on the relationships.

And she says something really interesting to me was in the whole RNDC, you know, explosion and bankruptcy, they felt so badly for so many of the wineries who were, you know, stuck with no place to go.

And they literally didn't take on a single new winery during that time because because they weren't in a position to really grow or to take on more stories.

So they were really focused on the people that they were already having long-term relationships with and not ruining what they had, that they had a lot on their plate and they wanted to continue the mission of the people that have been loyal to them and they've been loyal to over the years.

But still, that is a bellwether name in a core vertical for wholesale distribution.

The other one is over there in beverage, RNDC.

You know, at one point, the number two of the number one player behind, you know, Southern Glacier in that market, number two.

OK.

And, and, you know, because people aren't buying their office supplies and facilities, maintenance stuff at retail stores or online from them anymore, they're getting up from Amazon and other, other players.

So I think this whole two-step world in office supplies, janitorial supplies, facilities, maintenance has just collapsed to the point that competitors who are in a one-step channel have taken it away.

I think RNDC is a classic example of the bullwhip effect of COVID acceleration of demand and then decline.

And I mean, if you look...