How will the sale of Missouri’s biggest locally owned distributor affect local businesses – and you?
The acquisition of St. Louis-based Major Brands, Missouri’s largest wholesale alcohol distributor, by Breakthru Beverage Group was announced in early January, with the deal expected to close sometime this spring. The sale of one of the biggest players in the Missouri drinks business is obviously big news for the local alcohol industry, but what does it mean for consumers and the businesses that work with Major Brands?
If you’ve ever purchased alcohol in retail stores, bars or restaurants in Missouri, you’ve almost certainly bought a product that’s part of the Major Brands portfolio. As a consumer, the big question is whether the company’s acquisition will have an effect on the range of products available to you in stores and venues around St. Louis. Major Brands CEO Sue McCollum said she doesn’t anticipate that any brands will be lost to the local market – if anything, the consumer will have more choice. “People want to be in Missouri, and we try to bring new brands into our portfolio,” she said. “You're always trying to bring in brands that you think your consumers want in the market. That's what we always do and continue to do.”
Local venue operators have also been responding to news of the acquisition. Ted Kilgore, co-owner of Planter’s House and Small Change, said Breakthru Beverage Group brings a good reputation to the Missouri market. “I am confident that Major Brands would vet any company buying them,” Kilgore said. A Major Brands client of 24 years standing, Kilgore said his bars buy more stock from the distributor than from any other vendor. “I hope that nothing much will change as far as their loyalty to us, as well as ours to them,” he said.
Local venues and suppliers will be eager to see how the transition plays out, but McCollum said clients can expect continuity and consistency. “They're going to have the same sales rep. Their products are going to come out of the same warehouse, the same people are going to be touching it along the way, they're going to have the same driver,” McCollum said. “All those touch points that are personal and local don't change.”
Local laws regulating alcohol distribution differ greatly from one state to another, as do market conditions. In an acquisition like the Breakthru-Major Brands deal, that incentivizes the acquiring company to lean into local experience. “Breakthru doesn't have an operation in Missouri,” McCollum said. “So it's not like you're combining two companies and all of a sudden you don't need X, Y or Z there. They want to assume the operations of the company in Missouri.”
Kevin Lemp, founder and owner of 4 Hands Brewing Co. and 1220 Artisan Spirits, said he sees “a lot of upside” in the acquisition. “I feel like it's going to be business as usual, with some pretty tremendous outside resources that Breakthru has from the top down,” Lemp said. “Being a multistate operator could potentially shed new light on opportunities in our current market.”
He said 4 Hands had forged a “wonderful relationship” with Major Brands over the past decade, but that the brewer also enjoys a good working relationship with Breakthru, which sold 4 Hands in the Chicago market for several years until Breakthru got out of the beer business in Illinois.
Breakthru’s network includes 14 U.S. markets, as well as Canada. That’s a potential pathway for Missouri’s homegrown beer, wine and liquor brands to extend into new territories.“There may be opportunities through their network,” McCollum said. “I think that's an interesting piece to this. People always think about, 'What am I going to lose?' with a change – not, 'What am I going to gain?'”
Lemp is cautiously optimistic about the prospect of expanding his products into new markets. “There's a lot of pieces to that puzzle,” he said. For one thing, Lemp said the 4 Hands brand is “hyper-focused” on Missouri and Illinois. On the other hand, Lemp believes that there are potential breakout stars among the broader 4 Hands and 1220 portfolio – for example, 1220’s line of canned cocktails. Securing that opportunity will require patience, relationship-building and a lot of due diligence. “It's not as easy as Breakthru just coming in and flipping on a switch,” Lemp said.
When the deal is concluded, one thing that may change is the Major Brands name. If it does, it would likely be Breakthru Beverage Missouri; however, that has not been confirmed. But McCollum is adamant that the company’s future will be guided by the same principles that have been its underpinning for almost nine decades.“We've been in business for [88] years,”she said. “And it's because every brand we take on, we care about. It matters to us.”
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