How wine and spirits brands are bouncing back from RNDC’s California exit

Allison Luvera, co-founder of Juliet Wines, said the company had begun working with RNDC to help it bolster its expanding wholesale business. The company tripled its store count this spring with launches in places like Whole Foods, Safeway and Costco when the news of its exit hit. Brands who worked with RNDC told Modern Retail they had until Sept. 2 to find a new distributor.

“It was challenging for everyone in the industry, but especially challenging for us as an emerging brand that was at a really critical turning point in our retail expansion and needed that strong distributor partner to make everything work,” she said.

But by mid-August, Juliet had inked a deal with Classic Wines to continue its California business. Several other brands, like Une Femme and Saint Spritz, also landed at Classic. But the situation underscored the importance of relationships in the industry to help startup brands find their footing.

Brands interviewed by Modern Retail said they spoke with each other, their buyers and multiple other distributors as they figured out a way forward. Due to the unexpected nature of the withdrawal from an entire state, people were willing to call in favors, share their experiences or help make introductions for brands that would otherwise lose a major market if they couldn’t find a new partner.

“It’s one of the things I love about this industry,” Luvera told Modern Retail. “It’s still relationship-driven. It’s still who you know and who you have a connection with that plays a role.”

90 days to make a change

RNDC, which stands for Republic National Distribution Company, is a Texas-based company that has roots in the days before prohibition and currently operates in 39 states plus Washington, D.C. It works within the three-tier system for alcohol sales between brands that make wine and spirits and the retailers that sell them.

Requests for comment sent to RNDC were not returned. But CEO Bob Hendrickson said in a media statement posted to WineAdvocate.com in early June that the decision was driven by “rising operational costs, industry headwinds and supplier changes” that made staying in the California market unsustainable.

“It’s important to emphasize this is not a reflection of our California team’s performance or dedication, and we thank them for all they’ve done over the years,” Hendrickson’s statement continued. “We are committed to supporting all impacted associates with respect and care throughout the transition.”

Earlier in the year, heavyweight suppliers like Tito’s, Brown-Forman and High Noon stopped using RNDC in California and inked new deals with competitor Reyes Beverage Group. Several wine producers, including Folio Fine Wine Partners and Caymus, also found new partners, Wine Business reported.

But when the exit news broke, it was a shock to some brands, particularly smaller ones. And it was also time to hustle, with many in the industry rallying to support laid-off RNDC workers or help brands secure new connections.

Typically, securing a new distributor could take months. The process includes meetings about whether the product fits the distributor’s portfolio and if they can add value, plus contracts to be circulated before any brand presentations are made to sales teams or products are moved. But Luvera said much of this timeline was sped up after the RNDC exit.

“We knew firsthand that this was not something that is generally easily accomplished within 90 days,” she said. “I think all of the distributors that were picking up new brands understood the timeline. So they were working a lot faster than usual.”

Some founders like Luvera huddled up with other brands on text chains to share what they were hearing or share distributor contacts in their network.

Mallory Patton, founder of the canned spritz company Saint Spritz, said her team had conversations with a few distributors before landing on Classic Wines. It had worked with RNDC for about six months but wanted to ensure a smooth transition with its retail partners like Target, Walmart and grocery chains like Albertsons.

She said some friends called in favors to help her team meet with other large distributors. But Patton had heard good feedback from grocery buyers about Classic Wines, which helped solidify her decision. She also liked the idea of being a part of a distributor with a smaller portfolio.

“The relationship is everything,” she said. “You deal with these distributors on a day-to-day basis.”

Moving forward with new partners

Since RNDC’s exit, some brands have already announced new supplier deals. Q Mixers, for instance, tapped existing partner Breakthru Beverage Group, with which it already worked in 13 other states.

For Juliet’s part, Luvera said the brand didn’t lose any doors in the transition and is looking to keep scaling in California with Classic.

“It’s often difficult to get the distributors to be more of a brand advocate. So when you meet these teams where it feels like they’re excited about what you’re doing, that buy-in goes a long way,” Luvera said.

Une Femme, a canned wine company, also landed at Classic Wines after RNDC’s California exit. The company has been growing year-over-year and is on pace to sell 300,000 cases by the end of this year.

Jen Pelka, co-founder and CEO at Une Femme, said California is one of the most important and high-growth markets for her Sonoma County-based company — not just in retail stores but also in on-premise businesses like entertainment venues and hotels. Pelka said her team was “frustrated and disappointed” when faced with the challenge of finding a new distributor. But they locked in on Classic after reaching out to about 10 other potential partners through introductions or cold emails.

Pelka said it was a good fit because it has other brands in its portfolio that use alternative packaging and are meant to appeal to a new generation of wine drinkers. She said the company also has good relationships with many of its retail buyers and is reaching out to them to ensure a smooth transition. 

“It’s our responsibility as brand owners to take these challenges head-on and find a solution for ourselves and our teams,” she said.