The merged entity will be the second-largest in the US, behind Southern Wine & Spirits

The merged entity will be the second-largest in the US, behind Southern Wine & Spirits

The consolidatory trend within US alcohol distribution has hit another high, with the second- and third-largest distributors in the country looking to merge.

Republic National Distributing Co, second behind Southern Wine & Spirits, and number three Breakthru Beverage Group announced their intentions to combine operations earlier today. The letter of intent between the two is a result of "compelling reasons" drawn from not only alcohol industry trends, the pair said, but also "the greater consumer and retail environment" in the country.

The pair presently employ a combined total of around 16,500 staff across the US and Canada. Completion of the move is expected towards the end of the second quarter next year.

"The merger of RNDC and Breakthru will create strategic opportunities that will benefit our associates and our business partners in a rapidly changing and highly competitive marketplace," said RNDC CEO Tom Cole.

Breakthru CEO Greg Baird added: "We see this as the launch pad to … usher in a new era for our business and industry."

Cole will serve as CEO while Baird will become chief integration officer. RNDC's executive VP of sales & marketing, Bob Hendrickson, will move to chief operating officer, while Breakthru vice-chair Danny Wirtz will be chief growth & strategy officer.

Today's news comes just over two years since Breakthru came into being, itself the result of a distributor merger between The Charmer Sunbelt Group and Wirtz Beverage Group. Market leader Southern merged with Glazer's at the start of last year.

Why drinks companies will struggle to break Generation Z - Consumer Trends

Expert analysis

Alcohol Beverages Market in US 2017-2021

Alcohol Beverages Market in US 2017-2021

Alcohol beverages are drinks that contain certain amount of ethanol. Technavio’s analysts forecast the alcohol beverages market in the US to grow at a CAGR of 3.55% during the period more