Southern Glazer’s cuts jobs as US drinks distribution shifts
America’s largest alcohol distributor is cutting more jobs and expanding its use of artificial intelligence as weak demand continues to reshape the US distribution market. The move comes as rival RNDC undergoes a major restructuring following the loss of several high-profile supplier contracts.
The reorganisation of drinks distribution across the United States is continuing apace as demand remains depressed.
While Republic National Distributing Company (RNDC) continues to wrestle with the loss of major contracts with Brown-Forman, Pernod Ricard and Treasury Wine Estates, among others, the largest national distributor, Southern Glazer’s Wine & Spirits (SGWS), is preparing to lay off 1% of its workforce in addition to the 1% cuts it announced in February.
SGWS is moving to a hybrid sales platform using artificial intelligence, which will mean the loss of up to around 250 jobs.
SGWS said that it is implementing a new way of doing business through a hybrid approach that will combine field sales, inside sales and digital commerce under the same roof. The consolidation, it says, will create a newly designed “Customer Solutions Team” to better serve an additional 1% of its clientele.
It is widely predicted that some customers will no longer have direct access to a sales representative.
Focus on larger customers
Southern Glazer’s operates in 47 markets with projected revenue of approximately US$25.5 billion.
It distributes more than 80% of its portfolio through the independent channel, the bars, restaurants and independent retailers where brands are discovered, built and where pricing credibility is established before a product wins distribution with the major wholesalers and supermarkets.
The company is moving towards increased back-end capabilities for its highest-paying buyers. Its statement mentions data and insights, consultative selling and digital commerce tools, as well as serving “certain independent customers.”
“The marketplace is clearly signalling us to think differently about how we operate and best serve a portion of independent customers,” Southern Glazer’s chief executive Wayne E. Chaplin added.
“We are redirecting our resources where the business is moving and towards areas of growth, all while listening to our customers and individual markets to satisfy their needs and using AI to help us adapt to a changing market.
“Ultimately, this new hybrid approach will create a more responsive and effective customer support model, while improving the earning opportunity and retention for our talented commercial sales organisation.”
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Southern Glazer’s has been the single largest alcohol distributor in America since 1992, now operating in 47 US markets, Canada, the Caribbean and Central and South America.
It distributes brands from companies including Pernod Ricard, Sazerac, Brown-Forman and Suntory, generating annual revenue of nearly US$26 billion.
RNDC continues restructuring
Meanwhile, RNDC is undergoing major restructuring, downsizing its US footprint and laying off 500 employees.
It is quitting California, selling assets in 17 US control states to Martignetti, and transferring 11 state markets in a deal with Reyes Beverage Group. It is also selling its interests in Indiana and Kentucky to Breakthru Beverage.
Earlier this year RNDC was forced to undergo a significant refinancing exercise as it reshapes the business.
The slump in US demand has also affected Southern Glazer’s. In February, it said it was laying off a separate 1% of its workforce as it aligned with a “2030 strategy” to improve long-term efficiency.
Months earlier, reports circulated that it had laid off 40% of its on-trade team in Southern California.
FTC case nears conclusion
Meanwhile, Southern Glazer’s and the Federal Trade Commission are reportedly close to settling the lawsuit that accused the distributor of price discrimination.
In December 2024, the FTC accused Southern Glazer’s of “depriving” small and independent retailers of discounts and rebates.
According to Bloomberg, the two sides have reached a “tentative settlement”, with a judge agreeing to a joint request to pause the action for 45 days. A resolution is expected in August.
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