Nor-Cal Beverage Co., West Sacramento, CA, agreed to sell its beer distribution business to Markstein Beverage Co. of Sacramento, in a deal expected to close by year’s end.
Markstein gains expanded coverage Northern California along with distribution rights for brands from Anheuser-Busch InBev, Sierra Nevada, Constellation Brands Beer Division, Firestone Walker additional micro-brew brands.
The deal frees resources for Nor-Cal to focus on growing its manufacturing and contract packaging operations. The company’s plants in West Sacramento and Anaheim, CA, co-pack chilled juices, cold fill carbonated and hot fill beverages as well as its own Go Girl Energy drink brand, which is currently distributed in nine Western states.
Why would a co-packer shed distribution when trends seem to point to greater integration with logistics? One factor, verified by a source inside the company, is the decision to make a proactive, fate-controlling move to take advantage of optimal corporate valuation, as opposed to operating with the uncertainty of working with global beverage conglomerates whose continued restructuring moves can destabilize a small company. Selling now seems a positive step today, as it did in 2007, when Nor-Cal sold its Cadbury Schweppes soft drink distribution and bottling rights (including Dr Pepper, Squirt, and Hawaiian Punch brands) to Pepsi Bottling Group.
“It was a difficult decision,” Shannon Deary-Bell, CEO of Nor-Cal, said in announcing the sale of the beer business after 50 years of operation — the same words her father Don Dear, company chairman, said in 2007 of the similar soft drink sale. Following the the 2007 sale, the company pumped $47 million into a renovation that resulted in a gleaming, automated West Sacramento plant for alternative drinks such as energy drinks and vitamin-enhanced water. Proceeds from the current transaction are undisclosed.
