MEZCALEANDO

The alcohol distribution system in the United States, the gateway to doing business related to spirits in any state of the Union, is going through a profound transformation driven by strong economic pressure caused by multiple factors.

What for decades operated as a profitable business and a channel to bring diversity to the market now works under a different logic: efficiency, scale, and control.

In recent months, the movement has accelerated visibly. Republic National Distributing Company is selling key markets. Reyes Beverage Group is aggressively expanding into wine and spirits. Southern Glazer’s Wine & Spirits continues absorbing regional distributors, while Breakthru Beverage Group restructures itself to remain competitive.

All under the same logic: efficiency and restructuring. But this efficiency is not designed to expand choice — it is designed to simplify it.

This is already a visible problem for new and small brands. Shelves still look full, even diverse, but that diversity becomes increasingly superficial. Portfolios are managed to maximize rotation and margin. If a product does not move quickly or requires special attention, it gets replaced. The business no longer has the room to build or position products.

For these brands, the rules of the game change completely: competition is no longer about quality. It becomes about speed, profitability, and surviving without equity.

And it is not that small brands cannot compete. It is that the system stops being designed to include them. The space, human resources, and materials that once existed to build products are now optimized to move volume.

The everyday consumer — curious and passionate, the one who explores, compares, and asks questions — now faces an offer filtered by volume. In practice, they walk into a store looking for something different and encounter whatever the system needs to move.

Without context, without recommendation, without narrative, and after repeating this experience several times, they stop searching. In many cases, they stop drinking or change their consumption habits. Not because of health concerns or discipline, but because of a lack of stimulation. The market stops giving them reasons to feel passionate about what they drink and what they buy. Ironically, this consumer is the core of the niche market small and emerging brands rely on to carve out a place in the industry.

Meanwhile, the American three-tier system presents itself as a structure of equal opportunity for all brands. In practice, that equality is fictional. Without equity in investment, visibility, and internal priority, competing against brands backed by multimillion-dollar budgets and aggressive practices becomes, in reality, impossible.

In theory, the system opens the door. But in day-to-day operations, it decides who sells and who does not. And in that decision, small brands stop being a priority — because they generate costs, not volume — and become expendable.

For small brands, the message is clear: the system stops supporting them. It simply can no longer afford to.

The changes are not distant. They are already happening.

The giants move slowly — characteristic of this industry — but they move. Layoffs have already started. Some brands, large, medium, and small, suddenly find themselves without a roof over their heads: displaced and searching for new routes. Others remain forgotten at the back of a warehouse, and many others, unfortunately, disappear. They fail because they never have the opportunity to stand in front of the right consumer on their own terms.

The system is saturated. Those making decisions within it are managing a crisis that exceeds their actual capacity for attention.

On-premise accounts are also trapped inside this new dynamic. They operate with less flexibility, fewer options, and increasingly conditioned decisions. In many cases, the purchasing process is already reduced to digital platforms without human contact, where buyers simply order what is available, without context, explanation, or real dialogue.

In some cases, these accounts become victims; in others, accomplices of increasingly aggressive and questionable sales strategies. And so, the restaurant, the bar, the cantina stop choosing and begin managing somebody else’s inventory.

The result will be a more uniform market, less dynamic and, in the long term, less attractive for consumers.

For new — and not so new — small brands, not everything is lost despite how gray the landscape appears. This context will not reverse itself anytime soon, so survival requires adapting to a new operational reality.

For them, the path could be:

First, choosing markets intentionally. Not all markets are worth entering. Entering a market without clear conditions is a waste of resources.

Second, finding access to those states through distributors that can actually generate business. Not all of them are equal. And let’s be honest: being added to a portfolio in any state has already been difficult for a long time, especially in saturated categories.

Third, assuming responsibility for sales. If the brand does not push, nothing happens.

Passive distribution stops being a viable option.

This means finding the right human resources and having the economic capacity to sustain them without expecting immediate returns. Having that investment power can become an argument for why a distributor chooses to shelter a brand.

Fourth, building key accounts. It is not just about running activations, but about developing relationships with influential bars and boutique stores that understand the product and defend it in front of consumers. Allied accounts become spaces that properly represent the attributes of the brand.

Fifth, maintaining identity and quality. Sacrificing image or virtues in order to compete on volume against brands backed by price, scale, and system support is a losing battle. Volume, if it comes at all, must be a consequence, not the starting point.

And finally, acting accordingly once it becomes clear that value no longer lies in simply entering the system, but in knowing how to move both inside and outside of it. Innovation in sales systems and in the way salespeople are incentivized becomes part of the game. So does cunning.

What we are witnessing is not the disappearance of independent brands, but the end of a model that sustained them through investment, time, and sales force support.

The distribution system can no longer support new bets. It is now designed to optimize operations, reduce payroll, and facilitate the exit of brands that no longer contribute enough.

For small brands, this is undoubtedly a crisis. But it is also a purge.

It is not a lack of quality. It is not a lack of product.

It is a lack of space inside a system that has already decided what it wants to sell.

From now on, survival will not belong only to whoever contributes the most to a distributor’s cash register. It will also belong to whoever manages to reach — through people, judgment, and execution — the shelf, the back bar, and ultimately the glass of the right consumer.

Originally written in Spanish; translated into English with digital assistance.