Independent San Diego wholesaler Scout Distribution will add statewide distribution in Arizona, starting April 5.
Scout raised $2 million to fund the launch in Arizona, where the company is “starting from the ground up,” CEO Jeff Hansson told Brewbound. (An SEC filing from March 16 shows Scout’s parent company, Ocotillo Holdings LLC, raised about $1.5 million through an equity raise.)
The company will start operations from a warehouse in Phoenix, with plans to add a second in Tucson in the next 12 to 18 months.
Scout currently operates in San Diego and Orange County, California. So why would the upstart wholesaler go multi-state?
“Arizona is the third fastest growing state in terms of population,” Hansson explained. “The state is seeing a flood of new residents every month as there is a great cost of living and beautiful scenery. A big reason we looked hard at Arizona was the chain cross over from Southern California. Nearly all of the chains we work with all operate in Arizona, so it makes sense for us to leverage those relationships.”
Scout will start with a portfolio that includes Phoenix-based Wren House Brewing Company, which previously self-distributed its offerings.
“We look to them as one of the strongest up-and-coming breweries in not only the state of Arizona but the country,” Hansson said. “Their beers are incredible and they have earned a ton of fanfare in Arizona and beyond. We will look to bring in new brands as the business grows.”
Scout’s initial portfolio in Arizona includes California craft breweries Karl Strauss, Harland Brewing, South Norte, Topa Topa, Fort Point Beer Co., Calicraft, and Artifex Brewing, as well as Iowa craft brewery Toppling Goliath.
Scout’s Arizona book will also include wines from Claxton Cellars and Longhouse Wines; hard seltzers from Fountain and Endless Summer; probiotic beverages from De La Calle; cider from Bivouac Ciderworks; kombucha from Local Roots; and coffee from Dark Horse Coffee Roasters.
In Arizona, Scout will employ around 15 workers to start, led by Bryan Paul, who will serve as VP and general manager. Paul brings 28 years of industry experience to Scout, last serving as senior VP and general manager of Young’s Market in Southern California. His industry experience includes stints at Boston Beer Company and Young’s Market in Arizona.
Scout plans an initial on-premise push into the market, similar to what it did in San Diego, but will call heavily on off-premise retailers and chains, Hansson said.
Although launching Arizona is the “immediate priority” for Scout, the company will also go deeper in its home state of California, with plans to expand into the Los Angeles market in fall 2021.
Scout also officially announced the hire of Michael Yao as VP of operations, who joined the wholesaler in October 2020 after three years as VP and general manager for Triangle Distributing Co. in Los Angeles. Yao’s resume includes stints at Mikkeller San Diego, Starbucks, Karl Strauss and PepsiCo.
“Scout is basically a brand incubator that has its own dedicated route-to-market,” Yao said in a press release. “It is no surprise that the Scout team has had so much success with brand building.”
Earlier this month, Scout began distributing products from Tomme Arthur’s Port Brewing and Tiny Bubbles brands in Southern California after acquiring the brand rights in February.