Industry toasts wine venture
• Wine retailers, brewers back Columbia Distributing’s expansion deal
Wine retailers and brewers say they'll raise a glass to Columbia Distributing Co.'s latest growth spurt.
Columbia Distributing and K&L Classic Wine Co., which is owned by prominent industry player Young's Market Co. of Orange, Calif., are putting the final touches on a deal that would form a new wine distribution company. Called Young's-Columbia, it is expected to become operational during the first quarter of this year.
The move will mark the third major financial maneuver for Columbia in the past 2 1/2 years. To fortify its Washington presence, Columbia bought the wine-focused G.A. Raden Co. in September 2000 and beer-oriented Sid Eland Inc. a year earlier.
Putting those divisions with the Young's wine-peddling division, along with Columbia's other wine forays, would enable the new company to distribute wines to more than 11,000 customers in the Northwest.
'It's great for us because it'll make their wine and beer distributing departments a lot more separate,' said Jerome Chicvara, chief operating officer for Portland Brewing Co. and, as a founder of Full Sail Ales, one of the fathers of the Oregon craft brewing industry.
'What we've talked about among the brewers is that we're about to gain a return to Columbia's historic roots,' Chicvara said. 'The brewers think that can't be anything but good.'
By the same token, wine retailers say they believe the move will improve their service. One retailer said privately that he's had several delivery issues with Columbia's wine division.
'They can't do the wine stuff spur of the moment, yet when my restaurant neighbor orders a keg of beer, they're there the same day,' the retailer said.
'Young's is a very good company, and their professionalism will be welcomed,' he said.
Ed Maletis, Columbia's chief executive officer, said the partnership stems in part because the region's wine industry is strong. That segment, he argues, delivers significant revenue and jobs to the Pacific Northwest.
As part of the deal, Young's will purchase an undisclosed share of Columbia. Maletis wouldn't disclose financial details of the pending deal.
Columbia did $285 million worth of sales in 1999.
Portland-based Endeavour Capital advised Columbia on the deal.
'It makes a lot of sense for everyone, including the suppliers and retailers,' said John von Schlegell, Endeavour's co-founder. 'It'll give the retailers fewer people to deal with, so they should expect better service.'
Columbia, located on 14.3 acres on Swan Island, distributes Miller Brewing beverages, as well as several nonalcoholic 'natural drinks.' The company says it supplies products for more than 95 percent of Oregon's population.
As the self-touted 'largest purveyor of microbrewed beer' in the nation, the company has helped such companies as Deschutes Brewery and Portland Brewing earn stellar, far-reaching reputations. Columbia also distributes offerings from such tiny craft brewers as Hair of the Dog, which has won a plethora of beer awards.
Columbia distributes products from every major Oregon brewer except for Widmer Bros. Brewing Co., BridgePort Brewing Co. and Rogue Ales.
The Young's partnership is expected to give Columbia access to a plethora of new merchandising resources. Young's reportedly uses an innovative tracking program to follow product trends, its own sales, and merchandising data and company orders.
'It's kind of odd in that the merger has no effect on the craft brewers, yet could have very positive implications in that we have the ability to utilize each other's best practices,' Maletis said.
As a result, local brewers could realize several shipping advantages.
'Young's tracking systems are known for being cutting edge,' said Jim Parker, executive director of the Oregon Brewers Guild. 'So there's no doubt that would be good. And if the wine business helps Columbia make money, that's all the more they can spend on things related to beer.'
Young's-Columbia will distribute wines from several vineyards, including Eugene-based King Estate. Other wines that the company will distribute include selections from Chateau Ste. Michelle, Covey Run, Kendall Jackson, Ferrari-Carano, Glen Ellen, King Estate and Vendange.
The company also will carry rare brands from Chateau St. Jean, Cakebread Cellars, Rosemount Estates and Sterling Vineyards.
Von Schlegell said he recommended the deal to Maletis after meeting Young's Chief Executive Officer Vern Underwood on a fact-finding trip to the company's headquarters.
'They're our kind of people,' von Schlegell said. 'They have a long-term perspective and, like Columbia, want to be in it for the long term. That's real important to us.'