A wholesale beer distributor based in Cedar Rapids and Dubuque is planning to purchase Vanguard Distributing in Davenport, reflecting a national trend of industry consolidation.
7G Distributing LLC was formed in 2010 with the merger of Dale Lee Distributing in Cedar Rapids and Dubuque-based Kirchhoff Distributing. The company is an Anheuser-Busch wholesaler, along with Crown Imports, Monster Energy and over 14 additional beverage suppliers
7G Distributing will acquire all assets and distribution rights of Vanguard Distributing effective Jan. 1, 2014.
Vanguard Distributing is owned by Bill Wallace of Davenport. The company distributes Anheuser-Busch, Crown Imports, Monster and several other craft beers.
Joe Lee of 7G Distributing said the company wanted to expand its operations and Vanguard Distributing offered a good fit.
“We were in a good position financially and Bill Wallace wanted to exit the business,” Lee said. “It was a footprint that’s adjacent to our territory and that made it very attractive. We expect to achieve a number of synergies.”
Lee said Vanguard Distributing will be rebranded as 7G Distributing after the merger is completed.
7G Distributing services retailers in 16 Eastern Iowa counties with sales of over 4 million cases annually. With the addition of the Vanguard distribution rights, 7G will distribute approximately 6 million cases in Eastern Iowa and employ over 200.
Consolidation of wholesale beer distributors has been occuring for many years in the United States. The number of wholesalers has declined from more than 5,000 nationwide in 1970 to fewer than 2,500 today.
Beer sales in Iowa declined 5.8 percent to 73.1 million gallons in the fiscal year that ended June 30 from the previous fiscal year, according to the Iowa Alcoholic Beverages Division.
Tonya Dusold, spokeswoman for the Iowa Alcoholic Beverages Division, said the state is reflecting a national trend of lower beer sales and increasing sales of wine and spirits. Wine sales rose 6.1 percent in Iowa to 4.42 million gallons in the most recent fiscal year and 4.95 million gallons of spirits were sold , up 1.9 percent from fiscal year 2012.