Updated – Two distributors shut down, leaving local breweries out in the cold

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Updated March 17

This story is starting to unpeel like an onion. We will continue to post updates as it unfolds.

Following up on the original story posted below, Brewbound’s Jessica Infante reports that PepsiCo is in the process of setting up beverage-alcohol distributors in Washington. At least, it is trying to do so. Since 2021, PepsiCo has worked to set up its Blue Cloud Distributing network, a nationwide network of beverage-alcohol distributors. It has successfully done so in some states and is working on it in others. It now appears that Washington is on the list.

According to a story on Brewbound posted last night, “PepsiCo has been wading into the beverage-alcohol industry since 2021, when it announced the formation of Blue Cloud Distributing, a nationwide network of bev-alc wholesalers it was building with Boston Beer-produced Hard MTN Dew as its flagship product. Blue Cloud’s rollout has been bumpy, as evidenced by Hard MTN Dew’s staggered roll out, which has only reached 11 states one year after its launch.”

“Although Hard MTN Dew has yet to launch in Washington, Blue Cloud has six permits for alcohol wholesalers in the state filed with the Department of Treasury Alcohol and Tobacco Tax and Trade Bureau (TTB). The address of one of those permitted wholesalers is 219 S. Timm Road, also Corwin’s address. Other locations for listed Blue Cloud permits include Auburn, Everett, Seattle, Redmond and Spokane.”


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The prospect that one of the world’s largest soft drink companies is entering the realm of alcohol-beverage distribution is something Good Beer Hunting referred to as a “coming storm” in a story it published in October 2022.

Updated March 16

Corwin Beverage Co. issued the following statement regarding its decision to leave the beverage distribution business and the PespsiCo acquisition of its non-alcohol division.


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CORWIN BEVERAGE CO. EXITING THE BEVERAGE BUSINESS

RIDGEFIELD, Wash. – (March 16, 2023) – Corwin Beverage Company, which started out as Pepsi Cola of Vancouver in 1941, has decided to exit the highly competitive beverage distribution business. The non-alcohol division of Corwin Beverage Company will be acquired by its longtime partner PepsiCo. Concurrently, the company is actively exploring transition options regarding its craft beverage business through assignments to other distributors in accordance with its beverage distribution agreements.

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Corwin Beverage Company has been a proud distributor of beverages, including craft beverage distribution through Kendall’s Pioneer and Browar Polska, for more than 81 years. During that time, the Corwin family has had the opportunity to work with many great people and actively engage with the community, which in turn helped Corwin develop and grow as a thriving business and contributor to the region.

Staff, supplier and partner notifications began this week. The transition process is expected to be complete on or before April 30, 2023.

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ORIGINAL STORY BELOW

Two distributors shut down, leaving local breweries out in the cold

It’s dire news and it is still developing. Here’s what you need to know right now.

Today we learned that PepsiCo, Inc. purchased Corwin Beverage Company, a large beverage distribution company based in Southwest Washington. Why does this matter to beer drinkers like you? Allow me to explain.

Corwin Beverage is/was the parent company of two local, craft beer distributors. The deal with PepsiCo resulted in Corwin dissolving Kendall’s Pioneer Distributing and Browar Polska Distribution. The sudden shuttering of those two businesses impacts a number of craft breweries in a very negative way. With the snap of a finger, those breweries are now without a distributor in certain territories. This has already impacted some breweries and could very seriously impact them all.

Kendall’s Pioneer distributed beer in Southwest Washington and as far east as Yakima. Browar Polska distributed beer in Greater Seattle and Eastern Washington. Breweries distributed by Kendall’s Pioneer and Browar Polska include Barrel Mountain Brewing, 54-40 Beer, Everybody’s Brewing, Hellbent Brewing, Ten Pin Brewing, White Bluffs Brewing, Grains of Wrath, Stillwater Artisanal, and many others.

A statement today from the Northbank Brewers Alliance, a 501c6 non-profit that represents the breweries of Southwest Washington, said: “We are dismayed by the news this week that Corwin Distribution will dissolve Kendall’s and Browar Polska Distribution due to their buyout by Pepsi Co. This consolidation serves to injure the Northbank brands held by Corwin and will echo for years to come in southwest Washington craft beer.”

Northbank Brewers Alliance notes that Corwin did not provide enough notice, which means the craft brands handled by the two distributors did not have enough time to pivot in an effective manner.

“This short notice has already led to layoffs at the individual breweries and will most definitely lead to more in the future,” said the statement. “This lack of communication about their plans with PepsiCo will also deprive the craft beer community in Washington State now and for years to come.”

“The Northbank Brewers Alliance will aid these brands by helping with education in self-distributing and we will also be championing our local bars, taprooms, and restaurants that feature local beer from all of our community suppliers.”

“Supporting local beer is more necessary now than at any other time in our young Alliance history. If you have the means to support our small businesses either at their brewery or at your local taproom, now is the time.”

As always, and now more than ever, it is important to support your local brewing community. The Washington Beer Blog is watching the situation and will report any developments and let you know how you can best support the impacted breweries.



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3 thoughts on “Updated – Two distributors shut down, leaving local breweries out in the cold

  1. There is no way that PepsiCo/Corwin were going to jeopardize the multimillion-dollar sale by giving notice to breweries, let alone their own employees before the deal was signed and the ink was dry.

    This is a tremendous opportunity for those breweries to take back market share and margin dollars by self-distributing. Pointing fingers at PepsiCo will do you no good. I’m sure any brand with even a modest market share will be picked up by NW Beverage, Orcas or River Barrel.

    1. They can self-distribute but they won’t have the same reach and infrastructure as a dedicated distributor. I will point a finger at PepsiCo. Since the divorce from bang, they’ve been going around the market thinking they’re the only company that’s in the area. True story: pepsi went into a walmart to pull the bang coolers and install more Rockstar coolers, but they didn’t tell the store or walmart about it. When the store found out, they kicked every pepsi cooler and display off the floor

  2. Total devastating blow to anyone who wants support small craft breweries here in western Wa and Oregon. Sure some can decide to self distribute, but that means hiring a driver, a van and someone to coordinate orders. Not to mention getting your product out to consumers, both retail and restaurant. Small breweries that are already struggling with the cost of production have zero chance at getting wider attention without a good local distributor or a deep pocket investor. If this crap continues the beer selection everywhere in this area is going to look the same as the cooler in Fred Meyer or Safeway. I personally refuse to work with Columbia, NW Bev, Olympic Eagle and all the rest of the corporate majors, as they all operate out of the same gangster mentality of freezing out those don’t sign up for their distribution network. Corporate beer sucks.

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