The largest total beverage wholesaler in the Pacific Northwest and a Southern California-focused independent distributor are linking up to start a distribution operation in Idaho this fall.
Columbia Distributing and Scout Distribution today announced the formation of a 50-50 joint venture to begin statewide distribution in Idaho starting in October.
Idaho is fertile territory for both, as neither distributor had previously operated in the state.
Scout CEO Jeff Hansson and Columbia president and CEO Chris Steffanci told Brewbound that they see a state with a fast-growing population and capital city in Boise benefiting from the migration of consumers from their core markets of California, Oregon and Washington. Idaho was also attractive due to the high demand for bev-alc options, strong craft scene and contiguous territory for Columbia.
Both Hansson and Steffanci see “strategic partnerships” as the future of the bev-alc business. They also view this partnership as a test that if successful could roll out in additional states.
The JV unites Columbia, the largest beverage distributor in Oregon and Washington where it services 24,000 customers, with Scout, an independent distributor operating in Southern California and Arizona.
In Idaho, Hansson told Brewbound that the companies have a five-year plan to reach 1 million cases through the JV.
Across Scout’s two territories, the nearly 4-year-old wholesaler will do a little more than 1 million cases this year (850,000 in Southern California and 180,000 in Arizona), Hansson said.
Meanwhile, Columbia will do 80 million cases across Oregon and Washington, with beer accounting for 58 million cases, Steffanci said. Columbia boasts a robust non-alcoholic beverage portfolio, and its wine and spirits offerings will expand when Sazerac transitions into its portfolio starting October 15.
The joint venture will operate under the Scout Idaho banner, with a mission of bringing “a well-curated portfolio of products to a growing state that’s thirsty for more selection and innovation.” Scout will lead the daily operations from a 30,000 sq. ft. warehouse near downtown Boise.
Scout Idaho is actively recruiting both beverage-alcohol and non-alcoholic suppliers. Hansson and Steffanci declined to share which suppliers beyond Harland Brewing would be in the launch portfolio. Talks are ongoing with existing suppliers in their respective portfolios. However, spirits won’t be a part of it due to Idaho being a control state, requiring those products flow through state-run stores.
Hansson said he is signing brands daily and Scout Idaho will have the “best launch portfolio” the company has been a part of in its nearly 4-year history.
Scout will lead sales, marketing and staffing, with Andrew Phillips leading Scout Idaho’s operations as VP and general manager, Hansson said.
“They want this to be Scout and act like Scout and run by Scout,” Hansson said, adding that his team will lean on Columbia and learn how to service “large swaths of geography and make money while doing it.”
Steffanci praised the reputation Scout has built for building brands and taking them to market in a unique, tech-focused way. Although Scout has built a reputation as being strong in the on-premise channel and with gourmet grocery stores such as Whole Foods, Hansson said the Idaho distributor will “attack all channels,” including chains.
“We’re not going to be a one-channel pony,” he said. “We want to win in all channels.”
Steffanci added that Columbia will help Scout Idaho make inroads with chain buyers in the Pacific Northwest.
In addition to helping open doors for Scout, Columbia will help with logistics, with beer from Southern California flowing through the distributor’s Pacific Northwest warehouses en route to Idaho. Columbia will also help with purchasing power to build up operations, such as delivery truck purchases, Steffanci said.
The partnership checked several boxes for both companies, including strategic growth into new markets, expanding opportunities for suppliers, and providing more choice to consumers.
“Having met Chris Steffanci and the Columbia team over a year ago, we knew immediately that we had found a group that was like-minded and had a desire to expand geographically,” Hansson said in a press release. “They are very different than most wholesalers of their size and pedigree. They want to innovate, they care about their employees and equally as important, they want to grow.”
“It’s rare to find a partner similar in core values and culture with the added bonus of an adventurous, entrepreneurial spirit,” Steffanci added. “Scout and Columbia are a great match on all fronts, and we’re looking forward to much success together.”