A local wine and beer distributor is about to get a big infusion of cash from a couple of big names.
A unit of Berkshire Hathaway and the owner of the Chicago Blackhawks said Thursday that they’re forming a joint venture to invest in St. Louis-based Missouri Beverage Co. Terms of the deal, which is expected to close next month, were not disclosed, but Missouri Beverage president Bill Reichhardt said he’ll retain a majority stake in the firm, which ships wine, beer and spirits around Missouri.
The investment comes in a time of turmoil for Missouri’s distribution industry, with legislation and legal challenges to state franchise laws threatening to upend the way liquor and wine are sold here. It will give Missouri Beverage, a relatively small player, a much firmer footing, Reichhardt said.
“It’s a good deal,” he told the Post-Dispatch in a phone interview after telling his 58 employees the news Thursday afternoon. “It means continued stability and that our people will continue to have a job.”
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It also combines the logistics expertise of Berkshire’s McLane trucking unit with the Midwestern knowledge of Chicago-based conglomerate Wirtz Corp., said Wirtz President W. Rockwell “Rocky” Wirtz said. The companies may expand their relationship based on results in Missouri, he said.
“You’ve got to crawl before you walk,” Wirtz said in a phone interview. “I don’t know what the future holds. But, if this works out, it doesn’t mean that we can’t work together going forward.”
Missouri Beverage has a “relatively small” portion of the state’s $800 million annual wholesale wine and spirits sales, Wirtz said, but the three companies will work together to expand that market share, Wirtz said.
About half of Missouri Beverage’s business comes from wine and an additional quarter from distributing smaller craft brands, Reichhardt said. McLean and Wirtz were particularly interested in tapping craft growth, and in expanding into neighboring states like Illinois where Missouri Beverage has relationships with St. Louis-based grocery chains. Reichhardt said he’ll retain majority ownership of the company but that the investment will help fuel growth.
“It takes all my financial worries away,” he said.
The deal fulfills part of a projection by Berkshire Chairman Warren Buffett last year that the trucking unit would build its business.
McLane Chief Executive Grady Rosier bought two alcoholic-beverage wholesale distributors in 2010 and last year acquired Meadowbrook Meat Co., a North Carolina-based business that supplies national restaurant chains.
“Grady runs a logistical machine second to none,” Buffett wrote in a 2012 letter to shareholder of Omaha, Neb.-based Berkshire. “You can look for bolt-ons at McLane, particularly in our new wine-and-spirits distribution business.”
McLane, which Berkshire bought from Wal-Mart Stores Inc. in 2003 for about $1.5 billion, reported 2012 pretax earnings of $403 million, or about 1.1 cents for every dollar of sales. The unit gets about 30 percent of its sales from Bentonville, Ark.-based Wal-Mart.
Wirtz Corp. was founded in 1926 in Chicago, according to its website. The company expanded from real estate into beverage distribution in the 1940s and now has more than $2 billion in annual revenue. Operations currently span banking to sports.
Wirtz owns the National Hockey League’s Chicago Blackhawks and part of Chicago’s United Center arena. Wirtz Beverage has operations in Illinois, Iowa, Minnesota, Nevada and Wisconsin.
Bloomberg News and Tim Logan of the Post-Dispatch contributed to this report.
