With Gallo, Proximo Selecting New California Distributors, RNDC’s Exodus Enters Endgame
Last month, Republic National Distributing Company (RNDC) announced it would be exiting the California market by the end of the summer after losing several of its key supplier accounts. Ever since, the industry has had its eyes on Gallo and Proximo — two of the largest clients that remained with RNDC — eager to see which distributors the beverage giants partner with in the Golden State. Last week, that information became public.
On Thursday, Proximo Spirits announced that it reached a strategic partnership agreement with Breakthru Beverage Group (BBG), which distributes Proximo-owned brands in Colorado, Missouri, and Nevada. According to the new agreement, BBG will take over the distribution of all Proximo-owned brands — including Jose Cuervo, 1800 Tequila, Bushmills, Proper No. Twelve, Maestro Dobel, and more.
“We’ve seen strong performance with Breakthru in other key markets and have been impressed by their investments into a strong commercial and operational infrastructure in California that will lead to long-term growth,” Proximo Spirits president and CEO Mauricio Vergara said in a press release. “Their insights-driven approach and commitment to execution are essential qualities in a market as competitive and complex as California.”
The very next day, Gallo — the fourth-largest beverage alcohol supplier in California — revealed that it will shift distribution in the Golden State to Reyes Beverage Group effective September 3. The announcement comes just a few short months after Gallo announced it would pull High Noon from RNDC-led California distribution in favor of Reyes. Come September 3, Reyes Beverage Group will distribute Gallo-owned brands like New Amsterdam, La Marca Prosecco, and Barefoot.
“Our relationship with Gallo over the years has been one filled with shared values and a focus on growth,” said Reyes Beverage Group CEO Tom Day in a press release. “We are grateful for the opportunity to represent more of Gallo’s incredible spirits portfolio while also entering the wine category with an industry leading partner.”
Perhaps most notable about the Gallo exit is the conglomerate’s choice for new distribution — Reyes Beverage Group. It’s the very same distributor chosen by both Tito’s Vodka and Brown-Forman, as well as long-term RNDC partner Sazerac when it terminated relations with RNDC in 2023. (AB-InBev plans to distribute with Southern Glazer’s in California.)
“This transition to Reyes ensures continued support and availability of Gallo’s portfolio across California,” Gallo vice president of distribution management Cub Schuller remarked in the release. “We greatly appreciate the Reyes family and the organization they’ve built — one grounded in integrity, operational excellence, and a strong commitment to serving the trade.”
VP Pro Take
“Well that was quite a scramble, eh? I was texting with a Southern California industry source last Friday about the Proximo news last Friday morning when they sent me a screenshot of an internal email from Reyes Beverage Group (RBG) confirming the Gallo move. “This must be what Woodward and Bernstein felt” like, they joked. Maybe Deep (Share of) Throat would have been more precise? In any case, shortly thereafter, RBG — the middle-tier powerhouse that’s done more in the past half-decade to consolidate California’s booze trade than any other mega-wholesaler, including RNDC itself — sent out a release confirming it would be picking up Gallo’s prodigious volume in the state. And just like that, the final major prize in the Great Golden State Realignment Race had been swallowed up.
On one hand, it’s not surprising that Gallo shifted its spirits and select wines over to RBG. ‘Florals… for spring… groundbreaking,’ is how a colleague responded to the news, channeling Miranda Priestly’s iconic, brutal expression of boredom in ‘The Devil Wears Prada.’ Right: Gallo already handed High Noon to RBG earlier this year. Clearly, its executives liked what they saw. On the other hand, the country’s favorite vodka seltzer brand is packaged, shipped, and sold like beer, which the country’s biggest beer wholesaler absolutely, emphatically knows how to handle. Not so for full-bottle spirits and wine! Whether RBG’s California workforce can excel in those dramatically different categories and their respective customers is an open question, as I first called out on The VinePair Podcast early last month. Tito’s Vodka and Gallo are betting it can. Keep an eye on it.
Proximo’s move to Breakthru is more conventional, and it really puts a bow on a tremendous series of wins for the firm over the past month. By my count, Breakthru cleaned up in RNDC’s California collapse, scooping up almost a dozen major and mid-major suppliers in the stature, including Delicato Family Wines, Stoli Group, Concha y Toro, Wilson Daniels, and more. No other distributor — including Southern Glazer’s Wine and Spirits, the industry leader to Breakthru’s No. 3 — came close in terms of breadth of the scores, though I have yet to try to tally up the case counts in motion to declare a volume winner. (Anybody done that math yet? If so, bang my line: dave@dinfontay.com.)
For the rest of RNDC’s soon-to-be-orphaned portfolio, the tune hasn’t quite stopped on the grim game of middle-tier musical chairs, but it’s close. With roughly a month and a half to go until their former California distributor’s exit from the state, a lot of those firms on the long tail are looking at take-it-or-leave-it deals with smaller distributors to maintain market access in the country’s thirstiest state. And that’s if they’re lucky. We’re in the endgame now, and if you’ve yet to find a new truck, you’ll soon be out of luck.” —Dave Infante, VinePair columnist and contributing editor
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