Brown-Forman Takes RTD Portfolio In-House, Ending Distribution Pact with Pabst

In a significant shift for the U.S. ready-to-drink (RTD) alcohol sector, Brown-Forman Corporation and Pabst Brewing Company have dissolved their distribution and sales partnership for a portfolio of flavored malt beverages. The agreement, established in 2021, is set to wind down as the Jack Daniel's owner moves to internalize control of its RTD strategy.

The partnership saw Pabst handle the supply, sales, and distribution for brands including Jack Daniel's Country Cocktails, Jack Daniel's Bolder, Jack Daniel's Hard Tea, and El Jimador Spiked Bebidas. Both companies stated the decision to part ways was mutual and are collaborating on a transition plan to maintain supply chain continuity for retailers and consumers.

"Bringing these brands in-house allows us to take greater control of our ready-to-drink strategy during a period of increased consumer demand," said Robinson Brown IV, Managing Director for Brown-Forman's U.S. and Canada operations. "Centralizing our efforts positions us to accelerate the portfolio's momentum and maximize its future impact."

For Pabst, the change follows a recent reorganization of its sales force and the appointment of CEO Greig DeBow last year. DeBow stated the transition will enable the company to "reallocate resources toward execution and innovation within our core portfolio of iconic brands," such as Pabst Blue Ribbon beer.

The strategic uncoupling comes as Brown-Forman prepares to report its fiscal third-quarter results. Recent financials show a mixed picture for its RTD segment: while net sales from RTDs grew 5% in the six months to October 31, 2023—driven by its New Mix range in Mexico—the Jack Daniel's RTD portfolio itself declined by 4%. The company attributed the drop partly to trade tensions affecting the availability of American-made beverages in Canada.

Industry analysts suggest the move reflects a broader trend of major spirits companies seeking tighter control over high-growth RTD categories, which have surged in popularity among younger, convenience-seeking consumers. By internalizing operations, Brown-Forman aims to gain agility in marketing, innovation, and supply chain responses in this competitive segment.

What the Industry is Saying

Michael Torres, Beverage Industry Analyst at Horizon Insights: "This is a calculated, forward-looking move by Brown-Forman. The RTD space is too critical for future growth to outsource key functions. Bringing it in-house allows for integrated brand storytelling and faster reaction to flavor and format trends."

Sarah Chen, Owner of 'The Cork & Barrel' retail chain: "As a retailer, I just hope the transition is seamless. My shelves need consistent stock of these popular brands. If this move leads to better innovation and support, it's a win. If it causes disruptions, it's the independents who will feel it first."

David K. Miller, former distribution executive (via industry blog Spirits Wire): "This 'mutual' decision smells like corporate spin. Pabst's recent sales team cuts and Brown-Forman's sliding Jack Daniel's RTD numbers tell the real story. It's a retreat masked as a strategy. Brown-Forman is scrambling to fix a segment that's underperforming while Pabst is likely cutting its losses to focus on its own struggling core."

Priya Sharma, Consumer Trends Consultant: "The RTD category is fragmenting. Consumers want authenticity and direct brand connections. This move could allow Brown-Forman to build a more authentic, agile relationship with the end-drinker, which is essential for longevity beyond the initial RTD boom."

This report is based on original reporting and official statements from the companies involved.