Anheuser-Busch Screwed Over Its Distributors With Its Latest Canned-Cocktail Moves

Just over a year ago, Boston Beer Co. co-founder and chairman Jim Koch sat on stage at Beer Marketer’s Insights’ annual conference and sang music to the middle tier’s ears.

“It’s very possible that beer distributors win this whole thing,” he said, according to the trade outlet’s report from the event, referring to the American drinking public’s convergence on flavor-forward, single-serve, base-agnostic products known in the trade as “total beverage.” He added, “The deck is stacked in their favor.”

Koch is eminently quotable, especially on matters that benefit his firm, which earlier this decade ruffled many a feather throughout its own distribution network as the brewing partner in PepsiCo’s since-abandoned Blue Cloud Distributing gambit. If it was lip service, though, it was pretty accurate lip service. At that point, beer wholesalers had already begun to pick up “total beverage” volume (including Hard Mtn. Dew, which Pepsi last year finally decided to route through traditional beer distributors rather than its ambitious, doomed middle-tier end-around). Since then, they’ve picked up even more. This year alone, High Noon and Happy Dad have made the move to beer distributors’ trucks across the country. Plus Monaco Cocktails maker Atomic Brands in a couple states. And Jack and Coke, along with the rest of Brown-Forman’s portfolio in California.

In fact, much of this action has been concentrated in California, which boasts more drinkers with higher amounts of discretionary income than virtually anywhere else in the country, and some of the most amenable retail regulations for cross-category booze shopping. And much of it has been to the benefit of beer-first wholesale juggernaut Reyes Beverage Group (RBG), at the expense of listing (listless?) wine-and-spirits megadistributor Republic National Distributing Company (RNDC). But while the most recent tectonic total-beverage realignment saw the latter firm lose yet another key ready-to-drink brand in the Golden State and 13 others, it didn’t jump ship for the former. Or any other beer wholesaler, for that matter. Last week, Anheuser-Busch InBev’s leading spirits-based canned cocktail brand, Cutwater Spirits, announced it was taking its talents to Southern Glazer’s Wine & Spirits (SGWS). Not only that, but ABI also shifted its High Noon drink-a-like, NÜTRL, to SGWS from the “red network” beer houses that had been handling them up until now. Beer distributors might be winning most of the total-beverage toss-ups, but they lost this one twice over. It’s worth unpacking why.

There are several surprising aspects of this middle-tier two-step, but the fact that ABI wanted Cutwater in different hands isn’t one of them. We first discussed RNDC’s woes here at Hop Take in January 2025, when Tito’s Vodka announced its departure from the wholesaler for RBG. Since then, RNDC’s chief executive has stepped down, and Gallo and B-F have pulled volume out of its warehouses. Zoom out a bit, and you’ll start to see a pattern. The Sazerac Company canceled its wholesale arrangement with RNDC in 2022 in a handful of states. Shortly after acquiring BuzzBallz in 2024, it got the super-valuable spherical riot-puncher out of there, too. RNDC’s not just hemorrhaging brands, either. Also in 2022, Provi, a B2B booze ordering platform, sued RNDC, alleging antitrust violations; just last month, the parties settled for an undisclosed sum that you can bet was pretty sizable. Also-also in 2022, RNDC acquired Young’s Market Company (YMC), a major western wine and spirits distributor in its own right, sort of a consolation prize for the merger with No. 3 Breakthru Beverage Group (BBG) that the Department of Justice blocked back in 2019. The investment delivered more scale in California and throughout the West, and many of the premium brands mentioned in this story. But between the social media chatter on the typically reliable r/RNDC subreddit, and the brand exodus compounding by the week, it seems pretty clear that RNDC wasn’t able to deliver a return. (The firm did not respond to a request for comment.)

SGWS was a plaintiff in the Provi suit, and also settled earlier this year. But the firm is considerably larger than its perennial second fiddle, with deeper pockets and a more well-integrated operation. It has a bigger footprint than RNDC (46 states, compared to 39), and plenty of cash to buy out its rival’s brand rights to Cutwater in California, Hawaii, and a dozen control states. Those would’ve been pricey, given Cutwater’s segment-leading sales. Crucially, SGWS has also gestured at adapting to the sales shifts in package and channel that the wine and spirits categories are currently navigating. (For example: its late-2024 acquisition of Horizon Beverage Company, a 600-employee wholesaler of Molson Coors, Constellation Brands, and BBC, among others.) It wants a bigger piece of the RTD market; hell, it needs a bigger piece, given the long-range trends on traditional, glass-bottled full-proof stuff compared to canned cocktails. I can see why ABI, which acquired Cutwater from former Ballast Point Brewing Co. executives in 2019, would favor the brand’s future outlook at SGWS over RNDC.

But those were never the only two options on the table for ABI. One of the company’s longest-running competitive advantages in the American beer business is its vaunted distribution corps, as notorious for its aggressive tactics as it is admired for its party discipline, efficiency, and sheer scope. The wholesalers in the red network traditionally handle beer, but these days they handle everything else state laws allow. (In California, it allows spirits.)

It makes sense that Cutwater wouldn’t move to RBG. The “gold network” is a fearsome machine in over a dozen states, and the heaviest hitter in the vital Golden State, but it’s closely aligned with Constellation Brands, stateside makers of Modelo, Michelob Ultra’s sparring partner at the top of the sales charts these days. And ABI couldn’t move Cutwater to its two remaining wholly owned distributors in California; state law forbids that. But that still doesn’t answer why the firm would shaft all its independent distributors in California, especially when some of them had seriously scaled up their footprint, and others had created a whole collective to address this specific need for their mothership.

“Spirits is the dominant category of alcohol in California right now, so if we didn’t get into it, we were just letting an opportunity pass by,” Peter Heimark, the third-generation owner-operator of his family’s namesake, ABI-aligned distributorship in Indio, Calif., told Hop Take back in August 2023, shortly after he’d co-organized seven distributors into a consortium called California Beverage Solution (CBS). The pitch to ABI et al., as Heimark put it to me a couple years ago: “We can get to c[onvenience] stores, and we can get to on-premise in a much bigger way” than traditional wine and liquor distributors, which tend to be less experienced with high-velocity, low-margin single-serve RTDs.

That’s generally true! Beer distributors own non-fungible equipment, relationships, and logistics skillsets that match up nicely with total-beverage demand. Hence why all those RTD brands have moved over to RBG! But not ABI. It “will lose distribution overnight” as a result, predicted an anonymous source in Beer Business Daily earlier this week. Probably true, utterly baffling — and a very raw deal for all those hard-working houses in the red network that were ready, willing, and able to move serious Cutwater volume if the c-suite had deigned to offer it.

ABI did not respond to Hop Take’s request for comment, but issued a statement to Brewbound saying it was “confident” moving Cutwater to SGWS would “strengthen our spirits-based brands in key markets and help accelerate our overall commercial momentum.” CBS was also mum. Heimark responded to my inquiry with a brief note: “I have nothing to add.”

Unfortunately, ABI did. On top of its Cutwater insult last week, the firm inflicted a not-insignificant injury on Heimark and his California compatriots, pulling NÜTRL from its own independent wholesalers and handing it to SGWS, too. The vodka seltzer has been a bright spot for ABI after biffing several attempts at malt-/cane-based hard seltzer over the past half decade. It posted ~35-percent growth in both dollars and volume in the 52 weeks ending mid-April, according to NielsenIQ off-premise scan data crunched by 3 Tier Beverages and reported by Brewbound. It’s not going to catch High Noon, but it’s got plenty of room to grow, and offers a nice complement to Mich Ultra in terms of flavor and positioning. For ABI distributors in California locked in a dogfight for tap handles and cooler space with the Modelo-movers at RBG, NÜTRL was good business. Welcome business, too, after the firm’s high-profile flops (Bud Light Next, Bud Light Seltzer, Cacti…) and higher-profile flopping around throughout 2023 during the Bud Light fiasco. Losing it will hurt; losing it for the promise of “overall commercial momentum” with SGWS, which lacks the penetration and know-how of a beer distributor, is a slap in the face.

We don’t yet know the real reason ABI made these moves. (If you’d like to leak it to me, get in touch: dave@dinfontay.com.) The steelman argument, from where your humble Hop Take columnist is sitting, is that SGWS, hungry for more RTD volume, offered the brands’ parent company a real sweet deal that independent wholesalers weren’t willing or able to match, and pitched the hell out of its nearly national scale and experience placing spirits-based stuff in control states. That’s pretty thin gruel, though. A more substantive explanation might include some power games between ABI and its affected wholesalers, with the former forfeiting short-term sales growth on its canned cocktails in exchange for more leverage over the latter on matters of beer distribution. (And scaring the hell outta the unaffected wholesalers that still have NÜTRL in the rest of the country; scant few states offer franchise protections on liquor, after all.) You could even imagine some score-settling in the mix, a reminder to the red network who calls the shots after the unprecedented public grousing some distributors indulged in during the right-wing boycott of Bud Light.

Maybe it’s all of that, or none of it. But one thing is for sure: Total beverage is a high-stakes game, and beer distributors aren’t guaranteed the win.

🤯 Hop-ocalypse Now

For years, non-alcoholic beer has been a consistent bright spot of growth in a category with very few of ‘em. Now that most of our big beautiful macrobrewers have invested (or reinvested, as the case may be) in the segment, we’re starting to get a much better sense for just how big the opportunity actually is — and which companies are going to be a part of it. Analysis on Circana off-premise scan data by Beer Marketer’s Insights, presented at the trade publication’s spring conference last week, suggests that the window for craft brewers to follow Athletic Brewing Co. et al. to tunnel-pasteurized glory is closing fast: while the top 20 NA beer brands averaged 47 percent year-over-year growth in dollars, the entire rest of the field mustered -6 percent in the same period.

📈 Ups…

Berkshire Hathaway doubled its stake in Constellation Brands last quarter… DoorDash tracked an 82-percent uptick in NA beer orders last year, and a 42-percent hike in overall beverage alcohol this year… Diageo insisted that Guinness would not be a part of its newly unveiled, $500 million “asset dump” scheme… After a late start, Boston Beer Co. now says it’s selling its Surfside competitor Sun Cruiser “by the pallet”… Numerator’s numbers show beer is once again the top shopping priority for Americans this Memorial Day Weekend… A bill in Delaware would route THC beverages through the three-tier system (but keep them out of the on-premise)…

📉 …and downs

Asahi’s chief exec flagged another emergent competitor for beer money — screen time… Texas’ legislature took a major step closer to banning THC products… Rhode Island’s legislature is considering a THC ban, too… Beer is leading wine and spirits in on-premise price increases, up ~26 percent compared to pre-pandemic levels…

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