August 2, 2018
After more than 70 years of business, Wheeling-based Skokie Valley Beverage Co. is closing its doors and selling off chunks of its North Side and north suburban distribution business to longtime competitors.
Lakeshore Beverage Co., the Chicago area’s largest distributor of Budweiser – among scores of other brands – is buying the rights to distribute Old Style beer north of Armitage Avenue into Wrigleyville, which remains a stronghold for the aging brand. Lakeshore will also acquire the rights to more than 700,000 cases annually of LaCroix sparkling water, bringing its total to about 1.5 million cases. That will make Lakeshore the largest distributor of LaCroix in the U.S., according to Beer Marketer’s Insights, a trade publication.
Meanwhile, two other wholesalers, Chicago Beverage Systems and Windy City Distributing, both of which are owned by Reyes Holdings, are carving up the rest of Skokie Valley’s business. Chicago Beverage Systems will acquire rights to distribute about 1 million cases annually of popular Mexican imports like Modelo and Corona, in northern Cook County. And Windy City will acquire distribution rights to Lake Barrington-based Wild Onion Brewery.
The sale is expected to close Friday; terms were not disclosed. William Schirmang, CEO of the fourth-generation family-owned Skokie Valley Beverage, declined to be interviewed Thursday. Nearly all of company’s 60 to 70 employees will be hired by the other three wholesalers, said Joe Thompson, president of the Independent Beverage Group, who served as a consultant on the deal.
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“This allows us to expand our portfolio into a wider swath of this city,” said J.R. Hand, president and CEO of Hand Family Cos., parent company of Lakeshore Beverage, on Thursday.
Lakeshore already distributes Old Style and LaCroix in other parts of the city; this deal allows it to distribute those brands north of Armitage to the Cook County line, Hand said.
As beer sales have been flat or declining in recent years, Lakeshore has increased its nonalcoholic beverage offerings, Hand said. And LaCroix is king of the sparkling waters.
“It’s probably one of the hottest brands there is,” Hand said. “It’s very beneficial to us, strategically.”
And Lakeshore already distributes Budweiser, the official beer of the Chicago Cubs, in Wrigleyville. Now it can also sell the former official beer of the Cubs, Old Style, to area retailers. Lakeshore is also acquiring North American Breweries, parent company of Labatt and Seagram’s brands, from Skokie Valley Beverage.
There’s been more recent consolidation among wholesalers of wine and spirits, as compared to beer. Last year, for example, Breakthru Beverage Group, the alcohol wholesale company that has its Illinois operation based in Cicero, announced plans to merge with Texas-based Republic National Distributing Co. to form the second-largest alcohol distributor in the United States. In 2016, Wirtz Beverage joined forces with New York-based Charmer Sunbelt to form Breakthru Beverage, a company with a portfolio that includes more wine and spirits than beer.
Beer wholesalers have remained more independent in part because of state franchise laws that make it more difficult for suppliers to change distributors, said Eric Shepard, executive editor of Beer Marketer’s Insights.
Thompson, the consultant on the deal, said that isn’t likely to change.
“These are largely family-owned businesses. I don’t think this creates any dominoes effect,” Thompson said.
Representatives with Reyes Holdings couldn’t be immediately reached for comment Thursday.