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Starwest Botanicals, Inc.
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Michael Handman
The beverage alcohol distribution system is cracking, and RNDC is the clearest symptom yet. RNDC’s exit from California was already a shockwave: thousands of suppliers suddenly without representation, and thousands of people out of work. Now we’re seeing the next phase: major suppliers defecting, rumors of asset sales, and a broader question no one wants to say out loud: What happens when one of the “Big 3” distributors becomes unstable? For years, conventional thinking was that distributors held all the power. But what we’re seeing now is something more dangerous: The entire system has become fragile. And here’s what’s getting missed in the headlines: The industry is being propped up by smaller and emerging brands. They’re the ones creating new consumers, driving innovation, and giving retailers something fresh to talk about in a category facing a historic decline in drinking. But those same brands are the most exposed when distribution weakens. Because if you’re a small brand with strong demand, strong velocity, or incredible online traffic, but no distributor will pick you up… You’re dead in the water! Not because consumers don’t want you. Because you’re structurally blocked from reaching them. The three-tier system was designed to prevent monopolistic behavior and protect the market. Instead, decades of consolidation have created what is effectively an oligopoly, where in many states there are only 2–3 realistic options for a supplier to scale. So when distribution becomes unstable, it doesn’t just hurt a wholesaler’s P&L. It suffocates the exact brands that are still keeping the category alive. Ahead of Wine & Spirits Wholesalers of America Access Live, I can only think how much longer can the industry pretend this isn’t a structural problem? For an industry this scrutinized, it raises a real question: How has the FTC not stepped in to force change, competition, or modernization? This isn’t just about RNDC. It’s about whether beverage alcohol has built a system that can survive the next decade.
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