A New Alcohol Distributor Network Aims To Revolutionize The Industry

Food & Drink

While the California wine industry braces itself for another vintage that will add to a growing wine inventory backlog, and the overall beverage alcohol industry tries to get recent tariffs reduced or eliminated, Independent Distributor Network (IDN) promises the beverage alcohol industry “…more service, more flexibility, and more choice.”

At $27 billion annually, the top two U.S. distributors—Southern Glazier’s Wine and Spirits and Republic National Distributing Company—account for more than half of what consumers spend on domestic wines; that’s before imported wines and spirits are factored in.

Established in 2019, IDN was formed as an alliance of 19 local distributors across 18 U.S. states with an aim for the beverage alcohol industry to overcome the downside of distributor consolidation. IDN’s Board President, David Stubblefield told Winebusiness.com “The top 10 wine and spirits distributors account for roughly 75% of the national market…a trend for the past 20 years. It has led to more efficiency and economies of scale for those companies, but has also left more niche or craft wine and spirits brands with fewer options for 3-tier sales.”

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About the wine inventory backlog, IDN Director of The Domestic Wine Portfolio, David Browne told me, “Demand is the issue. The wine category has enjoyed growth for decades, and we must engage all current and prospective consumers. Overall, we, as an industry, must do a better job to present the consumer with exciting options to best reduce supply with the realization the modern consumer is not one dimensional, but interested in wine, spirits, and beer. Consolidation has played a factor in the stagnation, and we are focused on providing an alternative for suppliers and growers to create a renewed interest in the overall wine category.”

Just to be clear, Browne says, “The current focus of the IDN is on wine and spirits brands. With that said, many of our members also sell malt beverages and they will focus on those items as well.”

IDN members handle imported products, too.

The present U.S. alcohol distribution situation gives consumers a wider selection than they’ve ever had, yet many small-to-medium sized producers have limited or no access to the national distribution pipeline, simply because they either cannot offer a national distributer enough product or enough incentive to support products. Those incentives are referred to in the beverage alcohol business as “programs.” A program includes things like large volume discounts, promotional support, etc. 

Considering the state-to-state alcohol regulation melange, how exactly does IDN work?

Browne again: “Each distributor is an independently operated business. Each distributor conducts business in accordance with their state laws. Product is ordered, billed and paid for separately by each distributor. When possible we do combine orders to help save on freight cost, but we have no plan or intention to move product across state lines.”  

He adds, “Each distributor has their own warehousing and distribution systems as well as a physical location in each state…IDN members handle billing separately, and in accordance with their own state laws.” 

IDN provides a local network of sales, marketing and brand building expertise. Browne said, “IDN combines buying power with partner suppliers to create cost savings and increased margin, with the possibility of shared purchasing and logistics.” 

If IDN’s plan to expand succeeds the current 18 state membership of Alabama, Colorado, Georgia, Illinois, Iowa, Kansas, Kentucky, Massachusetts, Michigan, Mississippi, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Tennessee, Texas, and Wisconsin may within the next two years be joined by another 10-15 states.  

Each of the present 19 member companies is family owned and often multi-generational. It would be a real plus if they remain that way, but who knows what can happen? I once worked for a wine distribution company that fit the same description. It was considered one of the best wine distribution companies on the East Coast—it was bought and consolidated into what is now the top U.S. national distributor.

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