“Best athlete” versus national alignment: The strategy upending US alcohol distribution

For decades, US wine and spirits distribution has moved in one direction: toward consolidation and national agreements. Under these agreements, suppliers work exclusively with one large wholesaler across their entire footprint. The value proposition is simple: easier operations, preferential margins, prioritization with national accounts, the promise of more resources than non-aligned competitors, and most importantly, upfront payments and performance guarantees.

For wholesalers, network-wide alignment guaranteed multiyear truck-fill, increased leverage with national accounts, and helped reinforce weaker parts of the footprint with big, powerful brands. We outlined this strategy in our 2024 report, National alignment: How US wine and spirits brands are getting the most out of their wholesaler.

But with the recent upheaval in the wholesale market, a “new” approach has taken the industry by storm: the “best athlete” strategy. In some ways, this model – positioned in philosophical opposition to national alignment – represents a return to the past. Suppliers assess their route to market on a state-by-state basis, giving their business to the wholesaler offering the best deal, execution, and track record – in short, the best athlete.

The best athlete strategy is synonymous with fragmentation. It is both a driver of and a response to the partial unravelling of wholesaler consolidation. By moving to a more fragmented network, brands introduce greater complexity and more stakeholders while also moving more sales and marketing responsibilities in-house.

Adding costs and complexity is not the formula typically taught in business school, so why are so many suppliers taking this approach? We break down the reasoning into two buckets: defensive and opportunistic. Are brands running away from a difficult situation or running toward a great new opportunity?

RNDC’s collapse has a structural impact on the wholesale market

In 2025, Republic National Distributing Company (RNDC) – then the No. 2 wine and spirits wholesaler in the US – announced its exit from California, a market it had entered only a few years earlier through the acquisition of Young’s Market Company. The move left hundreds of brands scrambling for a new wholesaler in the country’s largest market and foreshadowed the most dramatic collapse the post-prohibition alcohol industry has ever seen. RNDC is now in the process of liquidated its business, selling operations in 35 states to competitors. The process is headlined by Reyes’ acquisition of 11 states, including Florida and Texas.

For brands exiting a national relationship with RNDC – or watching their distribution rights sold to the highest bidder – a more fragmented wholesaler network is less a deliberate strategy than the default outcome. Still, many are trying to frame the disruption as an opportunity:

“This is Brown Forman’s first significant change to our US route-to-consumer landscape in more than 60 years,” Robinson Brown IV said in a 2025 press release announcing Brown Forman – the Jack Daniel’s owner – was leaving RNDC in 11 states. “We believe they will bring tremendous opportunities for growth in the years and decades to come.”

The more candid subtext: We had to get out of there.

The national deals are no longer as sweet

Before the RNDC collapse, suppliers had two legitimate national distributor options. Now there is one. New competitors are emerging, such as Reyes and Johnson Brothers, but the loss of RNDC has fundamentally changed the negotiating dynamics for suppliers.

The rise of national agreements coincided with 25 years of steady growth in wine and spirits, culminating in the post-Covid supercycle. Large wholesalers were competing for national supremacy, and national agreements were their most powerful weapon. With a bullish outlook and the confidence that came with being “too big to fail,” wholesalers offered enormous concessions to brands willing to sign a national agreement. Some of these deals were so rich that they actually lost money for the wholesaler.

As industry performance weakens, contracts signed during the post-pandemic boom have become albatrosses for wholesalers, locking them into inventory positions and capital commitments they would love to unwind. Excess inventory is also a problem for brands, since it complicates transitions: Outgoing wholesalers are incentivized to discount or ignore the brand, while incoming wholesalers are often forced to buy old inventory instead of purchasing directly from the supplier.

With less competition and a more bearish outlook, the main attraction of a national agreement – the large payouts and guarantees – is no longer exceptional. As those perks fade, the best athlete approach looks far more appealing.

Brands don’t want to collapse with their wholesaler

Large wholesalers have long been seen as all-powerful, money-printing machines whose dominance was written into the laws of the US three-tier system. RNDC’s rapid retreat – and the supplier “bank run” that followed – forced a sudden realization: Wholesalers are vulnerable. Suppliers now feel compelled to spread exposure and reduce the risk of becoming collateral damage if another large distributor fails.

These disruptions seriously impact supplier performance. Treasury Wine Estates estimated USD 50 million in lost sales in California after RNDC’s exit – a 25% decline compared to the previous year’s annual revenue in the state – and had to deploy USD 65 million in capital to buy back inventory at a deeply inconvenient time. Even carefully planned distributor transitions can lead to 5% to 15% volume loss in the short term. Suppliers caught in RNDC’s California collapse did not have the luxury of an orderly transition, and few, if any, have fully recovered.

“Brands are avoiding putting all their eggs in one basket,” said the CFO at one wholesaler. “People are walking away from incremental markets … enforcing performance clauses to justify not expanding relationships further.”

The real fear among brand owners is that losses in service, shelf space, and share during this transition will become permanent. The fear is justified. A distributor picking up orphaned RNDC brands will treat those volumes as incremental.. They are poorly incentivized to rebuild those brands to prior levels, especially if doing so risks cannibalizing sales from long-standing parts of the portfolio. The influx of brands has also overwhelmed sales reps, making it difficult for most brands to command focused attention.

Even once reps become familiar with their new brands, suppliers are more likely to face intense competition within increasingly crowded wholesaler portfolios. Historically, that concern was significant enough that national agreements often required wholesalers to create a dedicated division – or place the supplier in a division where it would be the top brand.

“Our suppliers are obviously very concerned about what division they are in,” said another wholesaler executive.

One salesperson used the analogy of a swimming pool: The pool (wholesaler) is so full of people (suppliers) that no amount of chemicals could make the water safe for swimming. Best to find a smaller pool with fewer people.

Margins are probably better with a new wholesaler – could the execution be better too?

“I think when an industry is looking for growth, the suppliers are going to be looking for different ways to unlock that growth,” shared Breakthru’s Danny Wirtz in a February interview on our podcast Liquid Assets. “They are actually looking at their route to markets and asking themselves the question, ‘Are we with the right people and what do we need to do to unlock?’”

Growth does not necessarily mean top-line sales. Lower-cost distributors – often beer wholesalers moving into wine and spirits – operate on thinner margins, potentially improving supplier economics even if shipments remain flat.

But at the core of the best athlete strategy is execution. Under national alignment, suppliers were explicitly committing brands to help wholesalers build out weaker markets and were compensated richly for doing so. Now, with those deals less lucrative, many brands may not see enough upside to justify the commercial sacrifices required to align in weaker markets.

“These updates reflect a deliberate, market-by-market approach to distribution, grounded in execution capability and customer needs,” said Conor McQuaid, Chief Executive Officer, Pernod Ricard USA, in a recent press release announcing changes to wholesaler partnerships that – again – resulted in a more fragmented network. “Our priority is to stay focused on what drives performance: consistent execution, strong partnerships, and exemplary service for our customers and consumers.”

Suppliers are looking to restore leverage over their wholesalers

Loss of leverage was always the top concern executives expressed about national agreements.

In a fragmented network, suppliers can address underperformance directly with credible threats. They can move business to a competitor, refuse to integrate newly acquired brands, or dangle new territory as an incentive for improvement.

“The idea would always be that you have leverage to threaten to move business from one distributor to another,” one wine industry CEO told RaboResearch. “In a consolidating market, are you better off using that leverage or hitching your horse to [one big guy] and hoping you’ll get more time and attention?”

By moving toward a more fragmented network, suppliers can claw back some of that leverage, but there is a real trade-off: They lose all those exceptional resources that define a national agreement.

“We have a lean sales team and so don’t have the people to manage all those distributors,” said the head of commercial strategy at one large winery. “[By signing a national agreement] we got dedicated resources, people you don’t have to pay for.”

That supplier was seriously affected by RNDC’s unravelling and has all but lost those “dedicated resources.” This brings us back to our core thesis: If suppliers want to move to a more fragmented network, they will need to reinvest in their own sales and marketing infrastructure to replace what national agreements once provided “for free.”

Category blurring and the emergence of the total beverage distributor are driving further fragmentation

As wine and spirits suppliers conduct postmortems on their failure to capitalize on the ready-to-drink (RTD) space, one conclusion keeps coming up: They used the wrong wholesaler. Though not universally true (Southern Glazer’s did much of the work to build Long Drink, for example), most folks recognize that beer wholesalers – and their control over cold boxes – have structural advantages in selling the beer-like products driving RTD growth. Increasingly, brands are negotiating contracts that allow RTD innovation to move through a separate wholesaler network, resulting in further fragmentation.

“[We focus on] who is the best athlete for each brand in our portfolio,” said the head of commercial strategy for another major supplier. “What is the best athlete for one brand may not be the best athlete for the rest of the portfolio.”

We also hear that suppliers are eager to test alternative wholesalers. Wine and spirits wholesalers are adopting practices from beer, while beer wholesalers are building divisions to sell wine and spirits. Given the expansion of players like Reyes and Johnson Brothers, and the way that competition is reshaping incumbent behavior, it makes sense for large brands to give them a trial run, even if only in one or two states.

Most excitingly, wine and spirits suppliers that achieve scale in beer networks now have synergies with categories that were once beyond their reach. Now that they share a wholesaler network, would it be so absurd for a large spirits business to invest in non-alcoholic products, such as energy drinks? These synergies provide a compelling source of flexibility and diversification that should appeal to wine and spirits executives.

The benefits and trade-offs of signing a national contract still make sense for many if not most large suppliers. In fact, what many brands are calling best athlete is merely a scaled-back version of national alignment.

“I don’t want to say that there’s not value in system-wide relationships,” said Danny Wirtz on the Liquid Assets podcast. “There’s clearly more above market resources that we provide. We’re able to look at the business more holistically and … there is an absolute ease of doing business with [fewer] partners. That’s just what you would expect.”

Even when brands claim to choose the best distributor in each market, they often default to a preferred national partner when options are similar.

“We will go with the best-performing distributor in every market,” one winery executive told RaboResearch, adding that more than half of their business still goes through Southern Glazer’s “in states that really matter.”

In other words, the philosophy is distinct, but the resulting wholesaler network is not. Relatedly, there is growing fear – especially among smaller brands – that partnering with larger wholesalers without national alignment carries significant risks. Such wholesalers are strongly incentivized to prioritize brands with national contracts due to those agreements and their ability to capture business with national accounts.

“Without national alignment, wholesalers are less incentivized to secure listings when they only benefit in a handful of states,” said one wine industry CEO. “We used to describe national alignment with an airline analogy: The goal was simply to secure a seat on the over-sold plane. A risk of the best athlete model is discovering there are no seats left or you are at the back of plane next to the bathroom.”

We touched on the challenges for smaller brands in our 2024 report on national alignment, but for more recent commentary, we recommend a great article by Jason Haas on the Tablas
Creek blog.

All recent shifts in the wholesale tier point in the same direction: Brands need to take more responsibility for their own performance. Here is why that matters so urgently – and what becoming the best athlete looks like in practice.

If wholesalers are doing less, brands need to do more

Virtually all traditional wine and spirits wholesalers are reducing staff, cutting divisions, and neglecting all but the biggest brands in their portfolios. The largest player, Southern Glazer’s Wine & Spirits, is making major moves into beer distribution. At the same time, many new entrants are low-cost operators or beer wholesalers. Their greatest strengths – velocity, volume, and lower margins – limit their ability to provide the slow, expensive hand-selling that has traditionally defined wine and spirits distribution.

One wholesaler executive referred to a lower-cost competitor as “the ALDI of distributors. … You pay a quarter for your shopping cart,” adding that while these player may do less, they execute the basics extremely well. Brand owners interested in doing more than the bare minimum will have to pick up much of the slack.

Even if brands make no changes to their route-to-market strategy, resources and service levels are flowing out of the middle tier, pushing more sales and marketing responsibility onto suppliers.

“We don’t trust our new wholesaler will keep [a fine wine division],” said the head of business development for a supplier switching to a beer wholesaler. “We need to make sure that [our own] brands are taken care of.”

The obvious response is for suppliers to do more – but what should that look like? Fortunately, there are already strong examples of suppliers that have long taken their destiny into their own hands: namely, Gallo and Sazerac.

The “Sazerac model” illustrates how suppliers can address the agent-principal problem

You could argue that the best athlete strategy should be called the “Sazerac model,” not only because the company was an early mover away from national alignment, but also because its shift to a more fragmented network was a major driver of RNDC’s collapse.

In late 2022 and early 2023, Sazerac announced it was leaving RNDC in roughly 30 states, replacing a footprint previously controlled by one wholesaler with a network of 12 (see figure 1). This was arguably biggest industry story of 2023. At the time, nobody knew whether the move was genius or folly, but since then Sazerac brands have continued to outperform the market.

Sazerac was reportedly operating under an arrangement that paid RNDC a flat fee per case, regardless of whether that case contained Pappy Van Winkle or Fireball. “Sazerac justified the reduced rate by insisting that it would be taking much of the marketing, sales, product placement, promotional, and merchandising activities ‘in-house,’” RNDC stated in a counterclaim suit following the breakup. “According to Sazerac’s own executives, RNDC’s role as distributor amounted to no more than ‘four wheels and a truck.’”

The Sazerac move highlights how much more suppliers can do to control their future.

Over time, suppliers have pushed huge costs – and a large share of brand-building responsibility – onto wholesalers, a service wholesalers gladly provide so long as they are richly compensated. But that system creates too much distance between the people responsible for building a brand and those executing it. In essence, brands have to fix the agent-principal problem.

The agent-principal problem arises when one party (the agent) is hired to act on behalf of another (the principal), but their incentives are not fully aligned, leading the agent to act in their own interest. The simplest way to solve the agent-principal problem is for the principal to take on more responsibility.

In the context of alcohol, that would mean brands stop paying for dedicated staff and special divisions and bring those capabilities back in-house – shifting key functions from agents back into the hands of principals.

Once a supplier has those capabilities, the bells and whistles of a national agreement matter less. If above-market resources are no longer decisive, why not choose the distributor with the best coverage, execution, and economics? By building their own in-market sales and marketing capabilities, suppliers like Sazerac and Gallo have been able to prioritize these fundamentals in their route-to-market strategy.

Suppliers cannot become category captains overnight. Only a few firms – Gallo, Diageo, AB InBev – have the scale and resources to wield such influence. Still, there are practical first steps brands should consider, regardless of route-to-market strategy, but especially if they are moving to a more fragmented network.

#1: Reinforce your national accounts team

So much volume moves through these channels that if brands can only choose one place to invest, this should be it. Fortunately, this is one area that most large and midsize suppliers never fully handed over to their wholesaler.

#2: Invest in commercial analytics and market intelligence

As brands move to a more fragmented network, they need to add resources to keep reporting and market data accurate and current. But strong analytics is about more than auditing wholesalers. Sales and marketing teams need tools to identify target accounts for new placements, prioritize markets by brand, assess which promotions are working, and track how those decisions affect the bottom line. Even brands with a national agreement should up their investment in this area, otherwise, as one supplier’s head of commercial strategy put it: “You’re letting [the distributor] assign their own homework!”

#3: Expand distributor management roles to include sales functions, with help from marketing

A surprising amount of distributor management still comes down to showing up: replacing a faceless brand with a personal relationship, educating distributor staff, and – just as often – reminding that staff about products and marketing plans. Quite simply, adding boots on the ground makes a big difference.

While responsibility for the relationship will remain with sales and distributor management, brands need centralized selling tools and materials to maintain consistent storytelling and style – something AI should make much easier. In-market teams need quick access to decks and sell sheets. These and other materials should be tailored to each campaign, the latest data, and specific chain, channel, and market needs.

#4: Develop more shared service agreements

Most small and medium-size brands simply do not have the scale to compete nationally. Industries like wine need to consolidate, but most firms lack the capital for traditional M&A. One solution is shared services.

There are two main approaches. A smaller brand can hand over commercial execution to a larger supplier (for example, Korbel selling through Freixenet Mionetto). Alternatively, and more interestingly, similarly sized brands with clear synergies can combine sales forces. For example, a brand with strong national account coverage may partner with another that performs
well on-premise.

“It takes a lot more work to sell than when you could just hand things over to RNDC,” said Dale Stratton, Managing Director at Azur Associates. “A lot of wineries and brands just aren’t up
to the task.”

These shared-service or brokerage models do not only work for brands – distributors like them too. Without more of them, brands will lack the scale to field the sales force needed to compete.

After speaking with dozens of brands, suppliers, consultants, and wholesalers, I’ve come to a simple conclusion: Route-to-market strategy is not the main determinant of success. To be clear, brands still need distributors that can execute – something that cannot be taken for granted. But whether a supplier signs a national agreement or goes with a best athlete strategy matters far less than their own commercial capabilities. So, whatever the model, suppliers are ultimately responsible for performance. I’ll say it again: The best athlete must be the brand, not the distributor.

“We don’t see wholesalers as brand builders,” said the CEO of one supplier that signed a national agreement. “Their job is to increase points of distribution, especially outside major national accounts, but brand building and velocity must come from the supplier.”

“Best athlete” versus national alignment: The strategy upending US alcohol distribution