Would you ever have imagined that California’s wine industry would experience a decline in sales? Given that around 90% of American wine is produced in California, it’s quite a shock.
While California wineries are still making wine, but sales have been gradually declining. In addition, some of the distributing companies responsible for getting that wine onto store shelves are calling it quits.
One major distributor is leaving California in a matter of months, and it’s a pretty big deal for the industry…and it’s costing over 1,000 people their jobs right now.
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Republic National Distributing Company (RNDC) is the United States’ second-largest distributor of wine and spirits. RNDC plays a pivotal role in getting alcohol from manufacturers to retailers, whether that’s your favorite grocery store or liquor store.
In June, RNDC announced that they wouldn’t be doing business in California effective September 2, 2025.
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With Republic National dropping California completely, distillers and wineries who had been using Republic have been forced to find new distributors.
Some examples of other alcohol wholesalers include:
- Breakthru Beverage Group
- Regal Wine Co.
- Reyes Beverage Group
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According to CEO Bob Hendrickson, several factors like “rising operational costs, industry head winds, and supplier changes” led to the Texas-based company’s decision to flee California.
Even though their departure date isn’t until September, the impacts of Republic’s decision are already sending shockwaves to several employees…
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The most recent news regarding Republic’s departure is the layoffs of its California-based employees.
A total of 1,756 employees throughout eight different locations were laid off. The laid-off positions ranged from sales, human resources, business analysis, warehouse drivers, and even the vice president of sales.
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Republic National was hit hard when it lost some of its major brands at the beginning of the year. Tito’s, High Noon, Cutwater Spirits, and Jack Daniel’s all went with another wholesaler, which surely impacted their profits and could have precipitated the exit from California.
Republic National had purchased another California-based distributor in 2022, so the turning of events so quickly after that acquisition points to the turmoil that is happening in the alcohol industry.
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According to a Gallup poll, Americans are planning on drinking less in 2025. The percentage of Americans who said they drank beer, liquor, or wine decreased by 9% from 2022 to 2024 (it was at an all-time high in the mid-to-late 70s).
For those who do still drink alcohol, generational drinking habits seem to be shifting…
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Consumers seem to be gravitating towards lower-sugar, lower-calorie alcoholic drinks to be “healthier”. Hard seltzers, which are low in sugar and usually 100 calories or less, have exploded in popularity.
This means that fewer people are turning to wine and spirits than in previous years, which is shaking up the business side of things for alcohol distributors.
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Now without a wholesale distributor, many wineries and businesses that have held contracts with Republic National are scrambling to find new partners.
On the other side, wholesalers are like vultures and are trying to snag the business opportunities that have become available with Republic’s departure.
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Keep in mind that Republic National is the second-largest wholesale distributor in the nation. Not doing business in California is going to impact them as a business, but that doesn’t necessarily mean it’s going to break them.
Republic National distributes thousands of brands nationwide. However, what’s going on in California may trickle down into other states down the line.
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Some people believe that what’s happening in California with the alcohol industry is a sign of what’s to come in the rest of the country.
California IS the second-most populous state, so it makes sense that it could be a vital sign for what could happen in other regions in terms of alcohol trends.
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Republic National’s withdrawal from California is a big deal, costing over 1,000 people their jobs effective immediately.
It doesn’t mean that Californians will be without their favorite drinks, but it could shake up the supply chain temporarily.
What do you think of the changing alcohol consumption trends? Do you think alcohol consumption will continue to decline over the coming years? Join the discussion in the comments!
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