That’s the conclusion of Stephen Rannekliev, lead beverage analyst for Rabobank, in the bank’s latest wine quarterly, out this morning.
He notes that the merger of Southern Wine & Spirits and Glazer’s, to form Southern Glazer’s Wine & Spirits, and Republic National Distributing Co. and Breakthru Beverage has created two beverage networks that cover almost the entire country.
While consolidation provides opportunities for smaller wholesalers, it also creates challenges for smaller suppliers because working with smaller wholesalers requires a network of wholesalers to reach different markets.
Interestingly, Rabobank sees Total Wine & More as a boon for many small to medium-size suppliers who have found success in supplying the retailer (831 stores, 22 states) with exclusive brands at very reasonable margins. TW&M has become an important means for small suppliers to access a market that can be very difficult to penetrate.
Retailers have been exceptionally lazy in embracing eCommerce, and Rabobank warns this could lead to retailers, principally grocers, “missing out on an estimated $4 billion in alcohol sales by 2022.” The unknown: Will consumers find other ways to buy bev/al or simply reduce purchases.
Changes taking place in the alcohol beverage market will likely rewrite the list of winners and losers in the future. “The oft-repeated refrain that it’s no longer about ‘big versus small’ but ‘fast versus slow’ is extremely relevant, Rannekiev says.