In a deal that will make it the largest wholesaler of Anheuser-Busch products in Massachusetts, Quality Beverage announced today an agreement to acquire Williams Distributing.
Financial terms of the asset purchase, pending supplier approval, were not disclosed. The transaction is expected to close in October.
According to Brewbound, Quality Beverage president and CEO Conrad Wetterau said the company will add 2.8 million case equivalents (CEs) in the transaction from Williams Distributing. He added that the combined company’s business would total 9.7 million CEs, servicing more than 3,400 retail accounts across 130 cities in Bristol, Hamden, Hampshire, Norfolk, Middlesex and Worcester counties.
“We’re adding geography, we’re adding customers, we’re adding scale to the business and we’re ultimately making a stronger company financially,” Wetterau said.
Wetterau estimated that after the transaction, Quality Beverage will sell about 45 percent of the A-B volume in Massachusetts and about 20 percent of the total beer volume in the state, making it one of the Bay State’s largest beer wholesalers.
Quality Beverage and Williams Distributing share similar brand portfolios, with both companies distributing products from A-B, Constellation Brands, Yuengling, Craft Brew Alliance, Sierra Nevada, Wormtown Brewery and SweetWater, among others.
Williams Distributing also holds the brand rights for Mass Bay Brewing Company, which Quality Beverage does not represent.
Wetterau said discussions with Mass Bay Brewing Company — which makes the Harpoon, UFO, Clown Shoes, Arctic Summer hard seltzer and City Roots cider brands — are ongoing. He added that the company is tapping Anthony Frasco, Williams Distributing’s VP of sales and marketing, as its new vice president and general manager of the Chicopee division.
“I’m confident that it will all come to be,” he said. “My goal is to transfer 100 percent of the suppliers that are out there.”
Williams Distributing was founded in 1950 by William Sadowsky, whose family operated the beer wholesaler for three generations. In June, Williams Distributing was one of three Massachusetts wholesalers terminated by energy drink maker Red Bull North America as part of strategy shift, transitioning to a self-distribution model for off-premise accounts and moving its on-premise business to wine and spirits distributor Martignetti Companies.
In a press release, Williams Distributing president Scott Sadowsky said he was proud of the business his family built over three generations.
“This was a difficult decision, but one we think is best as the beverage distribution business continues to evolve and change,” he said. “We have known and respected Quality Beverage and the Wetterau family for years. They run an excellent operation with a similar culture to our business, and will serve our suppliers, retailers, and employees well moving forward.”
No layoffs are expected to result from the transaction.
For Quality Beverage, the acquisition of Williams Distributing was “the next logical move” in its westward expansion in Massachusetts, which started in 2013 with the purchase of A-B wholesaler Consolidated Beverages in Auburn, Wetterau said.
Following the transaction, Quality Beverage will operate three warehouses in the state: a 95,000 sq. ft. facility in Taunton, a 57,000 sq. ft. warehouse in Auburn and Williams Distributing’s 90,000 sq. ft. warehouse in Chicopee, which covers the Springfield area.
Asked if Quality Beverage would consider future acquisitions, Wetterau said it would “take a serious look” as long as it was “contiguous” to its existing business inside of Massachusetts.
The transaction between the two independent Anheuser-Busch Massachusetts wholesalers is the latest consolidation within the middle tier.
Subscription newsletter Beer Business Daily reported last week that Dallas-based Glazer’s Beer and Beverage reached a deal to acquire GLI Inc. in San Antonio. Glazer’s acquired 4 million cases in the deal from GLI, whose portfolio of offerings includes Boston Beer Company, Pabst Brewing, Shiner, Guinness, Teacte, and Peroni, among others.
On average, two to three beer wholesalers consolidate each month. According to advisory firm Ippolito Christon & Co., 27 distributor deals were completed in 2018.