By the CN&R Staff
The California booze business just descended into chaos, though mainstream publications have been slow to pick-up on the story, and many remain oblivious to it altogether. However, if you’re someone with friends working in hospitality and have heard about storm clouds are on the horizon, it’s true that bars, restaurants and beverage stores across the state are in for a head-spinning six months. And regional wineries and distilleries are perhaps in a worse bind from this developing story.
The only good news, for Chico at least, is that craft beer producers are going to be relatively unscathed from the grenade that just went off in the alcohol industry.
In June, Republic National Distributing Co., or RNDC — one of the two largest alcohol distributors in the nation — announced that it was pulling out of the Golden State all together. California may be the largest market for drinks in the U.S. (if you were to split SoCal and NorCal into separate markets, they’d still be the first and second largest, respectively) but RNDC’s massive presence here evidently still could not stop its business model from spiraling into a doom loop.
The immediate impact of RNDC’s departure, which happens Sept.1, is a loss of 1,756 sales and supply chain jobs across the state.
Bob Hendrickson, CEO of RNDC, issued a statement about the exodus, stressing that the decision to give up on California was the result of “rising operational costs, industry headwinds, and supplier changes that made the market unsustainable,” though Hendrickson denied that his sales team on the ground was responsible for the implosion. He stressed that RNDC sales reps had shown serious “dedication” to their work.
That’s an assertion that many managers of Chico’s watering holes and dining establishments would probably agree with.
What clearly got RNDC in trouble over the past year was major players and legacy brands deciding they wanted a different company to distribute their products from San Diego to Crescent City. One of the first brands to break ties was Tito’s Vodka. At the moment, journalists and restaurateurs don’t know exactly what happened behind the scenes between RNDC and Tito’s. The insanely popular vodka had built recognition over years while working with a family-owned alcohol distributor in California called Young’s Market Company. RNDC, based in Texas, acquired Young Market in 2022. A little over two years later, Tito’s walked away from its California arrangement completely. At almost the same moment, the parent company of Jack Daniels Whiskey, Woodford Reserve Whiskey, Old Forester Whiskey, Tequila Herradura and Diplomático Rum also decided to part ways with RNDC. Then, Cutwater’s canned cocktails determined that it too would be moon-walking out of RNDC’s business life in California and Hawaii.
RNDC tried to soldier on, hoping its still-sizable portfolio would keep California bars, restaurants, hotels, country clubs and indie liquor stores making lots of orders, but evidently that vision became less and less realistic by early 2025.
So, between now and the start of September, every hospitality-based business in Butte County and the rest of the state has to figure out from whom it’s going to procure a sizable portion of its most-popular alcohol stock, not to mention how it’s going to make that transition without losing customers, set budgets and reliable revenue in the process.
California’s wineries and mid-size distilleries have their own serious problem. Without RNDC’s vast distribution network to tap into, there are very few ways for them to grow their brands and reach new audiences. Many could be heading for business stagnation at a moment when overall alcohol sales in the U.S. are already on the decline. But for Chico, one of the epicenters of craft brewing in the West, one saving grace is that RNDC handled virtually no beer products. Outside of two niche bottled beers, one of which is from Greece, RNDC dealt almost exclusively in wine and distilled spirits. So, Napa County, Sonoma County and Santa Barbara County may all have challenges, but Chico’s contributions to California drinking should carry on uninterrupted.
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