California is well known as the largest alcohol market in the U.S., so it was quite a shock when Republic National Distributing Company (RNDC), America’s second-largest alcohol distributor, decided to withdraw from the California market. This dramatic move, set to take effect by September 2025, will result in the loss of more than 1,750 jobs, affecting families and communities who rely on their business.
The upcoming closure is leaving more than 2,500 alcohol brands scrambling to find stability within the industry, and workers searching for jobs in an unstable market.
All About RNDC
The Republic National Distributing Company is quite a name in the alcohol industry, but things are taking a turn for the worse. The company’s origins date back to 1898 in Pensacola, Florida, and the company as it exists today was formed in 2007 through the merger of Republic Beverage Company and National Distributing Company. The company employs over 9,000 people and operates in over 20 states through wholly owned branches and strategic partnerships.
They built a vital link between alcohol producers and retailers, helping to shape the modern three-tier distribution system that governs the U.S. alcohol market.
WARN Notices and Worker Rights
When a company like RNDC plans large-scale layoffs, the Worker Adjustment and Retraining Notification (WARN) Act is crucial in protecting employees. Under federal and California state law, employers must provide at least 60 days’ advance written notice before a mass layoff, plant closure, or significant relocation.
The main purpose of the WARN Act is to allow workers and their families to seek new employment, access retraining resources, and manage financial changes brought on by sudden job loss. “We’ve made the difficult business decision to withdraw from California, which affects many of the roles in the state,” said CEO Bob Hendrickson. “We are complying with all regulatory obligations and are committed to handling every transition thoughtfully and smoothly and ensuring everyone is treated fairly and respectfully. We are grateful for the support of these employees and will do our best to support them during this time.”
Why RNDC Is Leaving California
The company claimed that rising operational costs, intense industry headwinds, and the loss of major supplier contracts were key factors behind its exit. In recent months, RNDC lost distribution agreements with several high-profile brands, including Tito’s Handmade Vodka, Brown-Forman (the maker of Jack Daniel’s), and E. & J. Gallo Winery’s High Noon, all of which shifted their business to rival distributor Reyes Beverage Group.
The Immediate Fallout
The biggest fallout of the company’s closure in the state is that 1,750 employees, from warehouse drivers and business analysts to sales representatives and vice presidents, are being laid off across major cities, including Hayward, Los Angeles, San Diego, Sacramento, and more.
The sudden loss of many jobs disrupts livelihoods and underscores workers’ vulnerability in an industry facing rapid consolidation, shifting supplier loyalties, and mounting financial pressures.
Why the California Market Matters
California is the single most influential alcohol market in the United States, both in size and economic impact. ParkStreet states, “California had an approximate population of 39 million people in 2022, with 28.8 million within the legal drinking age bracket. This makes it the largest state in the country and the top state in beverage alcohol consumption.”
The scale of California’s market is staggering: its beer, wine, and liquor stores alone generate over $7.2 billion in annual sales and support more than 20,000 jobs.
Regulatory and Economic Pressures
Running a business only gets harder daily, and the current economy isn’t helping. The company faces threats from operational costs, including labor, logistics, and compliance expenses, compounded by California’s high cost of doing business and fierce industry competition. The market is further pressured by national and global trade dynamics, such as tariffs and shifting supplier contracts, which can quickly erode profitability.
The state’s three-tier system, strictly separating producers, distributors, and retailers, imposes complex compliance demands, from mandatory electronic funds transfers for wholesale transactions to evolving labeling requirements and bans on certain products like hemp-infused beverages.
A Loyal Tradition Broken
Once, major supplier contracts were considered almost sacrosanct, with brands and distributors working together for generations. But as competition intensifies and market pressures mount, these bonds have frayed. In recent years, a wave of high-profile brands has broken ties with RNDC, shifting their allegiances to rival distributors in pursuit of better terms or broader reach.
This closure clearly indicates the end of an era in which trust and tradition anchored the industry. As the world changes and businesses have to adapt, business decisions’ influence on staff and other involved people is becoming less and less important to ensure the company’s survival.
Declining Consumption
Analysts project that 2025 will mark the fourth consecutive year of declining per capita alcohol consumption, with estimates pointing to a 1% year-over-year drop. This decline in sales is most likely due to younger generations that are increasingly embracing moderation, abstinence, and alcohol alternatives. At the same time, health consciousness and the popularity of weight loss drugs further dampen demand.
In the decade leading up to 2023, the number of binge drinkers aged 21–34 dropped by around 3 million, highlighting the generational shift away from traditional drinking habits. “Drinkers are now more habitual in their control of alcohol intake,” says Susie Goldspink, Senior Insights Manager for IWSR. “This trend spans all age groups, regions, and demographics, highlighting moderation as a mainstream cultural phenomenon, rather than a trend limited to younger LDA+ consumers.”
The Future of Alcohol Distribution in America
Alcohol distribution in America is constantly changing and adapting to consumer preferences and regulatory changes. With the help of technology, distributors can optimize supply chains, anticipate trends, and enhance customer engagement like never before. Meanwhile, the rise of ready-to-drink (RTD) beverages and non-alcoholic alternatives expands product diversity and challenges traditional distribution models.
As consumers continue to prioritize convenience, safety, and premium experiences, online alcohol sales and home delivery are bound to capture a larger share of the market. “Distribution has always been evolving, but this is the biggest change I’ve seen in my 40 years in the business,” says Lloyd Sobel, EVP and chief commercial officer for Breakthru Beverage. “The combination of the e-commerce explosion, the pandemic, on-premise shutdowns, and changing restrictions has resulted in huge change for our industry.”