EDITORIAL | mw
Success Stories
W henever we see a thriving business, the first thing we want to know is, how did they get there? It’s usually a very interesting story, involving creative ingenuity, tactical intelligence, and an exceptional amount of hard work. In this year’s MARKET WATCH LEADERS issue, we profile many such remarkable examples.
In his first life, our Retailer of the Year Jim Shpall of Colorado’s Applejack Wine & Spirits was a seasoned lawyer. When the opportunity arose to acquire Applejack from father-in-law and 1992 LEADER Alan Freis, Jim—a Hardvard grad, mind you—took the plunge, moving from the halls of justice to the world of drinks retailing—and found that he loved it. Colorado retailing has seen some big changes over the years, and Jim has navigated things brilliantly at the helm of this 3-location superstar.
We also honor this year’s class of MARKET WATCH LEADERS: Ted Farrell and Beau Farrell of Haskell’s in Minneapolis; Chris Lamb of Indiana Liquor Group in Carmel, Indiana; Vanessa Patel of A1A Fine Wine & Spirits in Palm Beach Gardens, Florida; Beau Starkel of Wine, Beer & Spirits in Omaha, Nebraska; Neal Rounseville of M&R Liquors in South Windsor, Connecticut; and Barry Broudy of Broudy’s Liquors in St. Augustine, Florida.
As for our two LEADERS Alumni Award winners, the Best Marketing award goes to Marques Warren of Seattle’s Downtown Spirits, who has succeeded by melding innovation with traditional marketing. And our Community Service winners are brothers Charles and Jess Bailes of ABC Fine Wine & Spirits in Florida, who find time to help people in need while also running their 127-store, $800 million retail juggernaut.
In our LEADERS Choice Awards, Espolòn Tequila from Campari Group has won Spirits Brand of the Year. Our Wine Brand of the Year is a repeat winner, Josh Cellars from Deutsch Family Wine & Spirits. Continuing Tequila’s hot run, Flecha Azul from WES Brands has won Best New Product: Spirits, while Constellation Brands’ Meiomi Bright has won Best New Product: Wine. And last but not least: Ugo Fiorenzo of Campari Group is our Industry Executive of the Year.
Congratulations to all the winners,
MARKET WATCH
MARKETWATCHMAG.COM • VOL. 43 NO. 8
Editor and Publisher Marvin R. Shanken
Editorial Director Michael D. Moaba
Executive Editor/Senior Vice President, Wine and Spirits Editorial David Fleming
Consulting Editor/Vice President, Wine and Spirits Editorial Daniel Marsteller
Senior Editor Julia Higgins
Senior Copy Editor Danielle Palecek Driscoll
Associate Editor Madeline Ender
Assistant Editor Danny Brandon
Contributing Editors Terri Allan, Kevin Barry, Amber Drea, H. Lee Murphy, Laura Pelner, Jean Deitz Sexton, Carol Ward
RESEARCH
Director of Research Juan Banaag
Market Research Assistant Jessica Bernstein
Market Research Assistant Abby Wilson
ART & PRODUCTION
Art Director Todd Miller
Photo Editor Alexandra de Toth
Imaging Manager Eli Halpern
Pre-press Manager David Boulanger
Vice President, Production Kevin Mulligan
Associate Art Director Lisa Aurigemma
Senior Designer David Bayer
Promotions Art Director Lisa George
Designer Emilie Ahern
ADVERTISING
Senior Vice President, Spirits Stephen Senatore
Vice President, Digital Michael Capace
Advertising Director, Trade Jody Slone Spitalnik
Advertising Services/Production Lauren Utecht
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M. Shanken Communications, Inc.
Chairman Marvin R. Shanken
Vice Chairman Michael D. Moaba
President and COO Laura Zandi
Executive Vice President Jessica Shanken Reid
Senior Advisor to the Chairman Mel Mannion
Senior Vice President, Administration and Advertising Sales & Services Constance McGilvray
Vice President, Advertising Miriam Morgenstern
Chief Financial Officer Steven Gordon
Vice President, Events Liz Mott
Vice President, Production Kevin Mulligan
Vice President, Creative Director John Thompson
Vice President, Internet Technology Enrique Velez
Executive Assistant to the Chairman Sheena Dellanzo
LEADERS ALUMNI CONTINUED
IN MEMORIAM
ED SANDS 1939-2024
A pioneer in wine retail, Ed Sands of Washington, D.C.’s Calvert Woodley Fine Wines & Spirits died in April at age 84. Sands was named a MARKET WATCH LEADER in 1984 and earned Retailer of the Year honors in 2012. He had an extensive beverage retail pedigree, starting in the mid-1960s when he opened Woodley Wine & Liquor next to his father-in-law’s grocery store. He joined forces with a D.C.-area drinks retail competitor in the 1980s to open Calvert Woodley Fine Wines & Spirits on Connecticut Avenue, a single-unit, 4,500-square-foot store that became a landmark in the nation’s capital.
Under his leadership, Calvert Woodley became a wine institution for Washington, D.C. dignitaries and locals alike, generating revenue of more than $20 million a year. Sands spearheaded the store’s push into Bordeaux futures and championed its hosting of visiting winemakers, wine dinners, and in-store tastings. He also put heavy emphasis on having a knowledgeable staff, and benefited from long-term employees who could hand-sell wine.
Along with his dedication to Bordeaux, Sands also delighted in wine discovery and regularly searched for little-known wine gems from all over the world to sell in his store. This dual approach of offering top-notch and super-premium Bordeaux along with oftentimes value-driven and lesser-known wines helped Calvert Woodley persevere through decades of ups and downs in beverage retail.
Prior to opening Woodley Wine & Liquor, Sands worked on Wall Street in New York and for the U.S. Securities and Exchange Commission in Washington, D.C. He retired from Calvert Woodley Fine Wines & Spirits in 2019 after more than 50 years in the beverage retail industry. His son Michael now owns the store.
JACK FARRELL 1942-2024
A pharmacist-turned-wine retailer, Jack Farrell of Haskell’s in greater Minneapolis died in July at age 82. Farrell was named a MARKET WATCH LEADER in 1989 and Retailer of the Year in 2019. Under his guidance, Haskell’s also received the MARKET WATCH LEADERS Community Service Award in 2010 and Best Website Award in 2016. Family was always important to Farrell. He was the oldest of five brothers and had four sons of his own, all of whom work for Haskell’s today.
Farrell bought Haskell’s in 1970 during a time when wine was just starting to get attention in the United States. A wine aficionado at his core, he built Haskell’s into a wine destination in the Twin Cities. In a previous interview with MARKET WATCH, Farrell claimed to be the first beverage retailer in the country to offer wine futures and the second to sell Beaujolais Nouveau, and he was also an early supporter of then-unknown wine producers like Robert Mondavi, Caymus, and Diamond Creek.
When Farrell purchased Haskell’s it was a one-unit store, and under his guidance the company grew to 11 retail outlets, plus one restaurant and bar and one deli, with annual revenue topping $60 million, led overwhelmingly by wine. Farrell made customer service a top priority, which greatly helped his business survive increasing competition in Minneapolis. Along with his retail work, Farrell was an active member in several wine societies both locally and nationally, and was committed to community service, sitting on various charity boards and helping many groups dedicated to the arts in the Twin Cities. He was also a well-known figure in Minneapolis due to frequent radio and television appearances.
Haskell’s will now be led by Farrell’s four sons. Ted is president and Beau is vice president of e-commerce and digital marketing, and both were named MARKET WATCH LEADERS this year. In addition, Brian is COO and John is vice president of sales.
BILL KNIGHT 1941-2024
B ill Knight, the founder of Los Angeles wine haven The Wine House, passed away in April at age 82. Knight was named a MARKET WATCH LEADER in 1993, and The Wine House earned the Community Service Award in 2003 and the Best Website Award in 2021. For Knight, The Wine House started as a hobby project, as he was also actively working as an investment banker when he launched the business in 1973. However, he was dedicated to the store and to the wine industry, and he helped the business grow from a small venture into a sprawling 18,000-square-foot destination in West Los Angeles. The store stocks more than 6,000 wines and has made wine education a priority, regularly hosting tastings, classes, and events. Knight’s sons, Glen and Jim, joined the business more than 30 years ago and continue to uphold their father’s retail standards at The Wine House. Both were named MARKET WATCH LEADERS in 2017, and Glen now owns the business.
DARRELL ANSEL 1937-2023
D arrell Ansel was an advocate for beverage alcohol retailers for decades. Ansel, the former owner of Chicago Lake Liquors in Minneapolis, died in December 2023 at age 86. He was named a MARKET WATCH LEADER in 1994 and was a board member of the Minnesota Licensed Beverage Association for 20 years, as well as a member of the National Association of Beverage Retailers. He sold Chicago Lake Liquors in 2000 and later shepherded the merger of the National Association of Beverage Retailers and the National Licensed Beverage Association to form American Beverage Licensees, a group serving both off- and on-premise operators. Ansel was influential in convincing beverage retailers nationwide to adopt a membership model that included both off- and on-premise drinks license holders in one organization, which was unheard of prior to the merger.
MAURICE BROWN 1933-2023
M aurice Brown worked in retail almost since the day he was born. A 1990 MARKET WATCH LEADER and the owner of Town & Country Supermarket Liquors in Cheyenne, Wyoming, Brown died in October 2023 at age 90, but he got his first introduction to retail life as an infant at his parents grocery store. Brown built Town & Country in 1978, creating a 12,000-square-foot beverage destination in a shopping center owned by his parents. In 2010 he purchased and renovated an old grocery store and made an even larger liquor store. Having worked with his parents for many years, Brown carried on the family tradition and brought his three children into the beverage retail fold, and they continue to champion Town & Country Supermarket Liquors today. Town & Country spans 25,000 square feet and claims to have the largest selection of whiskies and wine in Wyoming.
DENNIS OVERSTREET 1945-2023
D ennis Overstreet was passionate about wine for all of his adult life. The owner and proprietor of California institution The Wine Merchant Beverly Hills died in October 2023 at age 78, after having worked as a retailer for more than 50 years. Overstreet was named a MARKET WATCH LEADER in 1985 and won the Best Website Award in 2013. In addition, he authored two wine books and was frequently featured as a wine expert on California television programs. He began his career at Mondavi in Napa Valley and also worked for a short while at Sotheby’s London before creating The Wine Merchant in 1972. Overstreet was an early adopter of refrigerated self-storage for wine collectors and he had a large collection of rare wines and spirits. The Wine Merchant continues to operate today under the guidance of Overstreet’s wife, Christine.
Laura Pelner
2024 RETAILER OF THE YEAR
Modern Retail In COLORADO
JIM SHPALL IS A DRIVING FORCE IN COLORADO BEVERAGE RETAIL AT THREE-UNIT APPLEJACK WINE & SPIRITS
Applejack CEO Jim Shpall left a career in law to try his hand at beverage retail. Three decades later, Shpall has grown Applejack to three units in Colorado and the company is thriving.
B everage alcohol retail wasn’t Jim Shpall’s first career calling but it has definitely been his most treasured. Shpall, a seasoned lawyer, took a gamble on the drinks business in the mid-1990s when his father-in-law, then owner of Colorado’s Applejack Wine & Spirits, decided to sell the store. Now 30 years later, Shpall, a 2011 MARKET WATCH LEADER, says managing the business fills him with pride.
“I saw this as a fun opportunity,” says Shpall, who at the time had been practicing law for 12 years. “The idea of being my own boss was enticing. My career as a lawyer would have been great, but this has been a very good life.”
Under his guidance as CEO, Applejack has expanded from its original location in the Denver suburb of Wheat Ridge, Colorado to also include stores in Colorado Springs and Thornton, as three units is the maximum currently allowed for beverage alcohol retailers in the state. Shpall has updated and modernized each location, creating clean, bright, and easy-to-shop outlets that are well stocked and attract a wide array of consumers. His efforts have paid off and the business is thriving.
“We have everything that anyone could ever want or need, and we do it with great pricing,” Shpall says. “If we don’t have it, you don’t need it—that is our goal. We have something for everyone in terms of flavor, experience, and price point.”
For his efforts to carry on a family legacy while guiding Applejack Wine & Spirits into the modern age with multiple locations, Shpall has been named the 2024 MARKET WATCH LEADERS Retailer of the Year.
Applejack stocks a full roster of wine, spirits, and beer in its stores. Over the years, Shpall has renovated and modernized each location, making sure they’re clean, well lit, and easy to shop (cooler doors above; wine shelving top).
Family Tradition
Shpall follows in the footsteps of his father-in-law, Alan Freis, who was named a MARKET WATCH LEADER in 1985 and Retailer of the Year in 1992. Freis, who passed away in 2014, was a guiding light in Shpall’s early days at Applejack and carrying on his legacy has been top-of-mind for Shpall. “I’m only the third person to run this business since 1961,” Shpall says. “Ironically, my wife, who’s also a lawyer, told me I shouldn’t [buy the store]. Now, she would tell you that I was born to be a retailer.”
Applejack founder Herb Becker opened the original store in 1961 in Wheat Ridge, Colorado’s Applewood Village Shopping Center and the Wheat Ridge unit is still there today, though it’s grown immensely in size and scope since its founding. Becker, who had experience in the grocery store channel, sold Applejack to Freis in 1980. Freis had a beverage alcohol pedigree when he came in, having worked for Seagram’s and the local distributor Midwest Beverages, and he ran Applejack for 14 years. “I came into the business in 1994 when Alan announced he was going to sell,” Shpall recalls. “We worked out a deal and I wasn’t owner right away, but ultimately I bought him out.”
Though the business has changed immensely over the last 30 years, Shpall says both Becker and Freis would be proud of what it’s become. Shpall—who never met Becker but knows his son Mark—says both the original founder and Freis gave their all to Applejack. He notes that his father-in-law, in particular, relished the business and the opportunities it provided his family. “If he could see how Applejack has benefited his grandchildren and great-grandchildren, that’s all he could ever want from life,” Shpall says.
Shpall sold a piece of Applejack’s ownership in 2014 to a group of local investors, though he retains the CEO title, and he says his children likely won’t take over when he retires. He’s heavily involved in the stores’ daily operations, though he notes that he relies on his core team of executives—including a CMO, finance director, general manager, and key business and technology people—to keep Applejack running smoothly. For his part, Shpall is a big-picture thinker and notes that he focuses on strategizing ways to keep the stores relevant in an ever-changing retail environment. And that’s the biggest challenge to modern retail, as the off-premise landscape transforms continuously.
“There’s a revolution in the retail liquor business occurring that’s quite fascinating, challenging, exciting, and motivating,” Shpall says. “There’s a plethora of products out there, and consumption is down, and the competition is changing.” He adds that since Colorado now allows grocery stores to sell beer, wine, and spirits—a move that gained traction in the state legislature in 2016 and took effect in 2017—the retail landscape in the state has changed dramatically. “Now, you have grocery stores selling wine and beer in all their stores, you have decreasing consumption, you have a proliferation of suppliers, and you have a new retail reality that comes after the pandemic,” Shpall says. “What’s fun about the retail business now is trying to thread that needle and stay relevant as a retailer.”
Destination Mindset
Applejack has always aimed to be a destination, so that piece of the puzzle hasn’t changed. “In the early days when we could only have one store by state law, we had to make the four corners of the store match the four corners of the state of Colorado,” Shpall says. “For all those years we worked to make Applejack the go-to place for people in the state. That continues today.”
He notes that as times have changed, so has the store. The original location underwent a major overhaul and renovation in the early 2000s and again in 2022, and it’s since been joined by new locations in Thornton and Colorado Springs, which opened in 2020 and 2022, respectively. The stores boast roughly 20,000 square feet of retail space and stock anywhere from 13,800 to 19,000 SKUs, and Shpall takes pride in their clean, well-lit interiors. “People notice how beautifully the stores are merchandised, that the shelves are well-stocked, and that they’re spotless,” he says.
Spirits dominate at Applejack, making up 44% of total sales (shelves pictured). Whiskies and Tequilas are performing well, and vodka remains steady. Top brands include Tito’s, Jack Daniel’s, Maker’s Mark, and Jameson.
Spirits dominate total sales at nearly 44%, followed by wine at 39%, and beer at 16%, with the remaining 1% coming from miscellaneous items. Whiskies and Tequilas are performing well at Applejack, though Shpall says vodka sales remain steady too, and he adds that RTD cocktails are also over performing. The stores stock more than 6,000 spirits SKUs, led by Tito’s vodka ($29 a 1.75-liter), Jack Daniel’s Black label ($38), Maker’s Mark ($39), and Jameson ($45). “The younger generation is buying and drinking more cocktails so we’ve expanded that section and expanded the number of spirits we have, and the accoutrements to those spirits that allow people to make cocktails at home, including glassware and the tools you need to make a drink,” Shpall says. He adds that as the demand for canned cocktails increases, his stores are reducing space for hard ciders and seltzers, and replacing them with RTD drinks.
Applejack’s stocks more than 9,000 wine SKUs and Shpall says the stores’ wine offerings help differentiate them from the grocery stores that now also market the category. The company’s top-selling wines span from Kendall-Jackson Vinter’s Reserve Chardonay ($12 a 750-ml.) and Kim Crawford Sauvignon Blanc ($13) to La Marca Prosecco ($15) and Veuve Clicquot Brut ($63). “As supermarkets carry more of the everyday national brands, we’re trying to emphasize to the consumer that we have those brands and also the wines those stores don’t carry and will never carry,” Shpall explains. “We’ve made sure we’re second to none in terms of our wine selection. We want to stay ahead of the curve where we can.” He adds that California remains the top region of interest for wine at Applejack, but says attention also ebbs and flows in wines from Germany, Spain, and Italy.
In beer, Applejack sees movement with both the big-name domestics and craft labels. The stores stock roughly 4,000 beer SKUs, led by Coors Light and Coors Banquet (each $21 a 24-pack of 12-ounce cans); Model Especial also performs well ($29). Shpall says his company dabbles in proprietary labels too, but doesn’t put a major emphasis on them, choosing instead to focus on well-known brands that resonate with consumers. To that point, he says the notion of brand loyalty has changed a lot over his years in the retail business.
In an effort to attract more consumers to Applejack, Shpall has worked to diversify the company’s product offerings by adding cannabis drinks (above) and broadening its beer selection (below).
“When I first started in this business there were three brands of beer—Miller, Bud, and Coors—and people were loyal to their brands because that’s all the consumer was given,” he says. “As more choices were offered, consumers weren’t as loyal as people thought. The same is now true in spirits. As we give people more choices, I believe there is brand recognition but not necessarily brand loyalty. Consumers are willing to try new things.”
In that vein, Shpall says he aims to make his stores incubators for up-and-coming entrepreneurs and is committed to providing shelf space for new products from small businesses. “We want to be known as the go-to for giving entrepreneurs an opportunity to develop their brands and business,” he adds. “They’re generally young people who have a vision. Some of them catch fire and some don’t, but I want to do for them what I’d want someone to do for my children.” Shpall notes that Applejack was an early retailer to carry beers by Colorado craft notables Wynkoop and New Belgium brewing companies and was also an early retailer of Colorado’s Breckenridge Bourbon.
Branching Out
Never one to accept complacency, Shpall has continued plans for Applejack’s growth and evolution, especially as beverage laws in Colorado keep changing. One such legal shift that will benefit Applejack is Colorado’s soon-to-loosen guidelines for in-store tasting events. Shpall says that over the summer months, Colorado is loosening its store sampling rules and beginning to regulate beverage tastings in-store by the amount of alcohol served overall, not the number of products offered. Previously, Applejack could only legally serve samples of four products a day and on limited days, but by summer’s end the stores and their supplier partners will be able to offer more options.
Tastings and events have become a good form of outreach for Applejack. Along with in-store samplings, Shpall hosts dinners and larger-scale tasting events in Colorado, and his business also offers concierge and event planning services. These services provide both private and corporate clients access to wine experts who can do everything from plan a wine list for a wedding or business function to build a private cellar. “The goal is long-term customer development and retention,” Shpall says. “There’s no one thing that will make an enormous change, but having all these things—concierge service, party planning, delivery—creates customer engagement. We’ve been doing that for a long time.”
Technology also plays a role. Shpall says the Applejack website—Applejack.com—has risen to become a key tool for reaching and servicing customers. “We work hard to make sure the website is up to date in terms of looks and shop-ability,” he explains. “We aim to provide information to consumers about what Applejack is and what we have to offer. We try to distinguish ourselves from everyone else who sells beverages.”
The retail landscape in Colorado has changed dramatically over the years. Grocery stores in the state have added spirits, wine, and beer, creating intense competition for independent retailers. Applejack (exterior top) stays ahead with its diverse array of products and specialty services like delivery (trucks above).
Social media is similarly important and Shpall says Applejack has both an in-house team and an external company to manage it. The stores post on Instagram, TikTok, and Facebook, as well as utilize email blasts, billboards, and radio—both mainstream and online systems like Pandora. “We go to where the consumers are,” Shpall says, adding that his marketing focus now is on promoting the stores themselves instead of specific products. “My goal is not to market the thousands of products we have, but to focus on marketing Applejack and letting people know about us,” he says. “If you come to Applejack you’ll find a great selection, service, and prices. We tell people the value they get by coming to Applejack.”
With its three locations in Colorado, Applejack is maxed out by current state law. However, per legislation that was recently approved in the state, independent beverage store owners will be able to add a fourth location in 2027. So far, Shpall says he has no firm plans for another Applejack unit, but the retailer says he’s always open to continued growth and will examine the possibility of entering another market in the state when it’s legal.
“The goal is to be a destination, but also to serve the area within a 10-mile radius of each store,” Shpall says. “The days of people driving across the state to come to Applejack don’t really exist anymore because there’s such a proliferation of stores in general, and now grocery stores carry wine, beer, and spirits, creating a real risk to independent retailers. We want to make sure we’re relevant as a destination and that our stores stand out. We want to be the go-to place for everyone.”
Minnesota
MEGA-STARS
TED AND BEAU FARRELL ARE MAINTAINING THEIR FAMILY’S HISTORY OF EXCELLENCE IN MINNESOTA BEVERAGE RETAIL, USHERING HASKELL’S TO CONTINUED SUCCESS
Ted and Beau Farrell (pictured), along with two other brothers, are continuing the family legacy at Haskell’s, a chain of 11 beverage stores in Minnesota. The Farrells grew up in the family retail business and now lead it, following the death of their father earlier this year.
T he Farrell brothers are wine retail royalty around Minneapolis. Ted Farrell is widely known as “The Wine Guy” and he, along with his brother Beau and two other siblings, is making sure the family retail business—Haskell’s—continues to thrive after 90 years. Their father, Jack Farrell, purchased Haskell’s in 1970, and 50 years later the family has grown the business from one shop in Minneapolis to 11 modern stores around the Twin Cities. Jack embraced wine long before it was a cultural norm in the United States and his sons continue to be wine ambassadors today.
To say the Farrells are committed to wine retail is an understatement. The brothers grew up in the stores and were exposed to wine early on. “Wine bleeds through our veins,” Ted says. Beau adds that wine has always been part of his family’s life, and his parents often had wine on the table. “It’s ingrained into us,” Ted adds.
Ted is president of Haskell’s and Beau is vice president of e-commerce and digital marketing. The patriarch, Jack, was CEO until he passed away in July at age 82. The other Farrell brothers are heavily involved too—Brian Farrell is COO and John Farrell is vice president of sales. Total revenue at Haskell’s topped $60 million last year, led overwhelmingly by wine.
“It’s definitely something to be proud of,” Ted says about carrying on the family legacy. Jack was named a 1989 MARKET WATCH LEADER and 2019 Retailer of the Year, and Haskell’s won the MARKET WATCH LEADERS Community Service award in 2010 and Best Website award in 2016. “Competition is as fierce as ever, but we’re going to try to keep it going for another 90 years,” Ted says.
For their dedication to Haskell’s and to furthering the work of their father in operating consumer-friendly wine destinations around Minneapolis, Ted and Beau have been named 2024 MARKET WATCH LEADERS.
Wine is a category leader at Haskell’s, making up more than half of total company sales. The Farrells say that along with California labels, imports from France, Italy, and Spain garner a lot of attention (wine section pictured).
The Wine Guy
Ted’s persona as The Wine Guy was born through a partnership with a local Minneapolis television station that wanted to create a lifestyle segment and incorporate regular content on drinks and food. Ted began working with the station 14 years ago, providing wine information on air, and it has since expanded to include monthly wine recommendations, as well as pieces on seasonal trends, mixology, cooking, and wine and food pairings. Ted says he goes on air roughly twice a month, with one segment usually themed around a season, holiday, or event, and the other segment featuring his six for $60, in which he recommends six bottles of wine that together add up to about $60.
“It’s blossomed into a really terrific relationship,” Ted says of the television partnership. “We’re telling people about wine and it’s a terrific way for us to highlight a lot of our brands. We get residual sales from it and afterwards, we see those wines become peoples’ favorites.” Six for $60, in particular, has provided a measurable boost, as the company sold roughly 7,000 six-bottle sets last year, or an additional 3,500 cases of wine.
When he’s not on television, Ted keeps busy overseeing the stores’ business functions, focusing on purchasing and international shipments. He meets with store managers and wholesalers weekly, and also gets involved in some data analytics, to stay abreast of sales and trends. And of course, he’s a regular at the weekly Farrell family meeting, at which all of the family members involved in the business give an update on their area of expertise.
If Ted is The Wine Guy, Beau is the web guy. While Ted actually created Haskell’s first website in the late 1990s, Beau is now responsible for overseeing the store’s digital footprint, which includes managing the online platforms and web-based sales. The company’s e-commerce hub used to be located in the back of its Minneapolis store, but the family moved it to Stillwater, Minnesota ten years ago and hasn’t looked back. “We acquired Stillwater in 2009 and we moved the dot-com operations to Stillwater in 2014 because that store has more space and a larger shipping area to work with,” Beau says. “We embrace digital trends. We’re traditional in our methods, but we’re not afraid to try new technologies and point-of-sale systems.”
Beau adds that his family uses the Haskell’s website—Haskells.com—to attract more people into the brick-and-mortar stores, as the basket ring is generally higher from in-person sales rather than online. But he notes that the website is a great place to highlight specialty products, especially when they have national appeal. Beau points to unique products like Louisa’s Coffee Caramel Pecan liqueur, which is a specialty release from Nelson’s Green Brier Distillery, and Ponche Caballero liqueur, a spicy and sweet Spanish product made with brandy, orange peels, cherries, grapes, cinnamon, clove, nutmeg, and vanilla. Both products sell extremely well on the Haskell’s website.
“Louisa’s liqueur set the internet on fire, we sent it all over the country,” Beau says. “And Ponche Caballero—every veteran who was stationed in Spain or worked in Spain would drink that at tapas bars, and no one in the U.S. carries it. We brought it in for one veteran and put it online, and now we sell pallets of it. These products take off online but we don’t sell them in the stores.”
Product Mix
Though specialty products have a niche following online, many of the national trends in wine and spirits are seen in the 11 Haskell’s stores. Wine dominates the business at 56% of total sales, followed by spirits at 22%, beer at 15%, and miscellaneous items at 7%. The miscellaneous category now includes THC beverages, as Minnesota legalized them a couple years ago and the Farrells recently added them into their product mix.
Ted says Sauvignon Blanc is popular in the stores and Chardonnay also maintains a following. He points to Italy and Spain as consumer favorites and Paso Robles as a great value proposition for California wines. Meanwhile, Beau says wines from Burgundy, Bordeaux, Côtes du Rhône, and the Rhône Valley are influential at Haskell’s. The company’s top-selling wines include Kendall-Jackson Chardonnay ($11 a 750-ml.), Silver Beach Sauvignon Blanc ($14), and Casa Farrelli Prosecco ($22). The company also offers myriad proprietary and store-exclusive wine labels, which Ted says are usually very well received.
Spirits comprise 22% of total sales at Haskell’s and whiskies (top) have a steady following. Beer makes up 15% of sales, from big-name domestics to Mexican imports and local craft labels (above).
In spirits, Tito’s vodka ($29 a 1.75-liter) is a leader, followed by Jack Daniel’s ($38) and Svedka ($17). Vodka continues to do well, but Ted says whiskies are rising fast and interest in Tequila, mezcal, and gin is also picking up. Beau adds that the company has a robust spirits private barrel program and that it offers up to 40 different private barrel offerings at any given time. Meanwhile, beer sales are slowing as people gravitate toward hard seltzers and THC products. The company’s more popular beers include Coors Light ($22 for a 24-pack case of cans), Modelo ($14 for a 12-pack of bottles), and Surly Brewing’s Furious IPA ($17 for a 12-pack of cans).
In all, Haskell’s stores carry up to 18,000 SKUs, with wine comprising the majority at 8,800 SKUs and spirits making up about 5,000 SKUs. The stores range in size from 5,000 square feet up to 21,000 square feet, and the company boasts 165 full-time employees. The stores eschew a cookie-cutter format and instead aim to reflect their distinct neighborhoods and embrace the locals who live nearby, and each unit has a tasting bar. Along with the 11 retail outlets, Haskell’s also operates one restaurant and bar on the lakefront in Port of Excelsior, Minnesota, and one deli called The Big Cheese in St. Paul, Minnesota. To honor customer loyalty, Haskell’s offers a rewards program for regular shoppers called Bacchus. The program has about 10,000 members, who can earn discounts on products and entrance into special events by shopping in the stores.
“Competition is thick in Minnesota,” Beau says. “We’ve seen an increase in liquor licenses—in ten years they’ve more than doubled and almost tripled. Large big-box retailers have come in and every grocery store chain has a liquor store. We know customers can go to a lot of places, so we try to offer above and beyond service and do everything we can to make the customer have a great experience.”
Ted notes that shelf space is at a premium these days in the stores as the influx of new products across all categories continues to swell. “Smaller wine wholesalers are adding small, crafty liquors,” he says. “It’s hard to manage so many SKUs, and everyone comes out of the woodwork to show you a THC beverage. Our miscellaneous items have increased from 3% to 7% only because we score THC as miscellaneous.”
Embracing Change
Haskell’s has, of course, changed immensely from its early days. The store was founded by Benny and Fritzi Haskell in 1934. Benny had been a bootlegger during Prohibition and was a convicted felon, so legally he couldn’t operate a beverage store after Repeal. His wife, Fritzi, got the store’s license and by law had to work in the store to own it, so Benny paid her to go to France and buy wine while he sold liquor from the back. Wine wasn’t very popular back then, but Fritzi made a name for the store as a wine destination in Minneapolis and that reputation has persisted over the many decades, supported heavily by the Farrells.
Jack was working as a pharmacist when his father-in-law, Erling Rice, presented him with the opportunity to purchase a stake in Haskell’s. Rice had been a key player in the Twin Cities grocery chain Red Owl and had plenty of retail experience, meanwhile Jack had a personal interest in wine but didn’t know much about the off-premise. Over time, Jack bought out the other partners in Haskell’s and made beverage retail his top priority, focusing on fine wine.
The THC beverage space (above) has taken off at Haskell’s and the stores (exterior top) now stock a varied selection of cannabis drinks.
For his part, Ted says he never planned to take over the family business, explaining that his intent was to be a “ski bum” in Colorado after college, but he fell in love with the world of wine while backpacking through Europe and changed his plans. Beau says he embraced the business early on and didn’t spend much time working elsewhere before coming back to the Haskell’s fold. Their father was, of course, immensely proud of the family legacy.
“It’s wonderful to have a family business where the family really cares about the business,” Jack said earlier this year. He passed away unexpectedly this summer, leaving Haskell’s in the capable hands of his sons. “They all get along very well and that’s the key. They have respect for one another and assure themselves of each other’s competency. I couldn’t be prouder. I’m so glad to see the continuity is going to persist for fine wine in Minnesota.”
The brothers haven’t ruled out further growth, though they do say they will not venture outside of Minnesota anytime soon. Haskell’s used to operate a store in Florida, but it was bought out and they don’t plan to replace it. Beau says there are several local communities around the Twin Cities that they’re eyeing for possible expansion, and Ted adds that they’re always looking for local growth opportunities.
“We go where the population is,” Ted says. “We like to think we’re a destination. Not only do we have a terrific selection, we have a staff that guides you in the right direction. We have a company full of wine people.” He adds that the next generation of Farrells ranges from kids in grade school to young adults in their mid-20s, so they’re not yet sure if they’ll make a run for the family business.
“Our short-term goal is to make sure every customer experience is great,” Beau says. “That’s our biggest thing—service. We will help customers with whatever they need, and that service sets us apart from the competition. Everyone can have the selection and a good price, but not everybody can do the things that go above and beyond like we do.”
RETAILING
Role Model
A UNIQUE BUSINESS STRATEGY PUTS INDIANA LIQUOR GROUP ON THE FAST TRACK
In 2018, the late David Hartley created Indiana Liquor Group (ILG), a company that acquires different liquor stores and operates them under one umbrella. Now, the business is run by one of the original co-owners, Chris Lamb (pictured), who has nurtured Hartley’s vision and built ILG into an ever-growing portfolio of liquor store brands.
T hanks to a unique business model that has lifted margins, along with trust from local store owners and consumers and a driven and knowledgeable leadership team, Indiana Liquor Group (ILG) is getting noticed in the Hoosier State and beyond. Indeed, liquor store operators around the country would be wise to keep an eye on this emerging operator who is giving hope to small retailers looking for an exit strategy while building an ever-growing portfolio of liquor store brands.
ILG was the brainchild of late Indiana businessman David Hartley. Having sold off a medical equipment company in 2017, Hartley pursued new business opportunities and became fascinated with independent liquor stores, particularly the plight of longtime owners without a succession plan. By leveraging Indiana’s allowance for central warehousing of wine and spirits by retailers, Hartley foresaw that by combining banners under a single umbrella, the group could purchase more aggressively, thereby improving margins.
Along with four co-owners—Nate Feltman, Kyle Hupfer, Curtis Painter, and Chris Lamb—Hartley acquired the 31-unit Save-On Liquors chain in 2018. The following year, seven stores were acquired, and in 2020 three acquisitions totaling 12 stores were added to the fold. But sadly, in 2021, tragedy struck, and Hartley passed away. After regrouping, the co-owners, along with Hartley’s wife, Gina, recommitted to his vision, and in 2022, another three stores were added. Last year, ILG acquired the six-unit Papa Joe’s Liquors chain. In most cases, the established brand names have been retained, but in a few instances stores were closed or rebranded to Noble Wine & Spirits, ILG’s own emerging brand. A massive 30,000-square-foot warehouse in Marion allows ILG to purchase in great quantities and deliver wine and spirits to its stores via a fleet of delivery vehicles.
ILG carries 2,700 active spirits SKUs (spirits aisle below) ranging in price from $7-$1,000. Whiskey (offerings pictured above left and right) accounts for a staggering 43% of spirits sales, with Bourbon leading the charge. Vodka—the next largest spirits category—follows behind at 19%.
“The owners from whom we purchase the stores trust us with their legacies, and that’s why we’ve been so successful,” says Lamb, who serves as president and managing partner of ILG. In fact, more deals are in the works. At presstime, Lamb revealed that a few letters of intent to acquire were pending.
Out of the ownership group, Lamb is the only member with experience in beverage alcohol retailing, having spent about 12 years with Indianapolis-based 21st Amendment Wine & Spirits before joining ILG. During his tenure, he has been responsible for most of the buying and inventory at the chain and has played a role in the group’s acquisition spree. Upon Hartley’s death, Lamb was named president. “I’ve been involved in all aspects of the business,” he says. “My hands are in just about everything to make sure things are running smoothly.”
For his role in helping to build one of the fastest growing liquor store operators in the country, Lamb has been named a 2024 MARKET WATCH LEADER.
Spirits Heavy
Founded just six years ago, ILG has quickly grown into a 59-unit liquor store group with sales revenue expected to exceed $85 million this year, making it the No. 2 liquor store operator in Indiana. Based in Carmel, the company comprises nine brands—many long established—with stores that range in size from less than 1,000 square feet to more than 6,000. The stores are located in 15 Indiana counties concentrated between Indianapolis and Fort Wayne, encompassing rural, farming, and suburban communities. Spirits and beer are the key categories for ILG—each accounting for 42% of sales—with wine far behind at 4%, and miscellaneous items accounting for the remainder. The company employs 250 workers.
ILG carries 2,700 active spirits SKUs, priced from $7 a 750-ml. of Vitali vodka to $1,000 for Cincoro Extra Añejo Tequila. According to Lamb, Fireball ($15) is the top-selling spirits brand at the chain, with strong sales across all package sizes. Whisk(e)y is the leading category at the stores—accounting for 43% of spirits sales—driven by Bourbon, he says. “We do a lot with single-barrel selections as whisk(e)y drinkers continue to search for new and unique bottles,” Lamb notes. The single barrels are typically priced between $45-$100 and are branded as either ILG or Papa Joe’s barrel picks, a nod to the chain’s “big following” for the products, which even attract customers from Ohio, he says. After whisk(e)y, vodka comprises 19% of spirits sales at ILG, led by Tito’s ($33 a 1.75-liter), although budget vodkas, priced as low as $10 a 1.75-liter, also perform well. Among other segments, “we’ve seen the RTD market get flooded lately,” Lamb says. Still, High Noon ($19 an 8-pack of 12-ounce cans) remains the top-selling RTD.
Some 2,550 beer SKUs are offered, priced from $10 a 12-pack of 12-ounce cans of Miller High Life to $22 for Bell’s Two Hearted. Among brands, Modelo Especial and Corona Extra (both $20 a 12-pack of 12-ounce bottles) are “driving our non-domestic beer category and the total beer department for us,” Lamb says. “Beer is healthy at our stores because of Modelo. It just keeps growing.” At the other end of the pricing spectrum, budget beers like Busch Light and Keystone Light are seeing an uptick at the chain. “Busch Light 30-packs ($26) are one of our top-selling beer packages,” the retailer notes. Cold beer singles are also a significant contributor to category sales at ILG. With liquor stores in Indiana the only channel permitted to sell cold beer, the chain does a big business with 24-ounce singles at the hands of convenience stores. “They’re a way for customers to try new things and make for a quick and easy stop on their way home from work,” Lamb says. Depending on the size of the store, ILG shops feature between 8 and 22 cooler doors.
As in many other Indiana liquor stores, wine is a small category for ILG, with sales largely dominated by brands like Barefoot ($12 a 1.5-liter) and locally produced labels. “We’ve tried to see if higher priced wines would catch on in our small stores, but those customers keep reverting back to inexpensive wines,” Lamb says. But he’s determined to move the needle. Recently, the company has taken to featuring wines rated at 90 points and above in special sections. “Having scores and descriptions helps educate customers when staffing isn’t available to hand sell wines,” he notes. The approach already seems to be working. Year to date through May, wine sales at ILG were up 8%, Lamb says. Overall, the group lists about 1,000 wines, priced from $6 a 750-ml. of Sutter Home to $400 for Opus One.
ILG stores are a big destination for tobacco purchases, Lamb says, as in many of the communities where the stores are located, there are few tobacco or convenience stores. Others miscellaneous items carried at the stores include barware and snacks.
Premiumization Focus
With seven stores (including three built from the ground up) and more planned, Noble Wine & Spirits is ILG’s upscale brand and a concept where Lamb and his partners see a lot of opportunity. “The stores are designed as higher end, to appeal to a more discerning clientele” than that of most ILG stores, the retailer explains. “Selection is larger and the offerings are more premium.” As a result, “the average ring is higher” than at other stores in the system. Usually among the largest shops in the ILG fold, Noble stores feature amenities like tasting bars, beer caves, cigar humidors, and 90-point wine walls. The focus on premiumization is already working; wine accounts for 22% of the concept’s sales, outperforming the company’s average. At press time, an eighth location in Noblesville was planned to open early next year.
Wine is a small category for stores across the ILG footprint, buoyed by big brands like Barefoot as well as some local offerings. In an effort to get more customers excited about wine, ILG stores showcase 90+ point wines in a special section (above).
To grow awareness of Noble and its sister stores, ILG occasionally invests in outdoor advertising. “When we acquire stores or open new ones, we’ll put up some billboards to direct traffic there,” Lamb says. Beyond that, the company relies on social media platforms like Facebook and Instagram to promote offers, as well as its 50,000-member strong VIP loyalty program. Through weekly emails, loyalty members are informed of special sales, in-store tastings, and other events. They also receive early notification on the release of allocated whiskies, Lamb says. For its part, ILG analyzes membership data to study buying behavior and to target special offers to members. “We’re more analytical than most stores in this market,” says the retailer.
ILG stores frequently host in-store tastings, such as the recent Captain Morgan Sliced RTD and Ketel One vodka and Filthy olives events. “Our supplier partners are willing to help with those,” Lamb explains. In addition, the company hosts an annual WhiskeyFest, featuring a live auction for coveted finds like Pappy Van Winkle. Proceeds from the festival, which typically attracts between 150 to 250 people, benefit Spirits for Smiles, a charity founded by Hartley that provides dental care for needy adults in the community.
Beer does good business at ILG (the company’s Noble Wine & Spirits brand above), driven largely by names like Modelo and Corona (beer aisle top right). Stores feature up to 22 cooler doors (top left), many of which house single-serve chilled cans as state law mandates they can only be sold in liquor stores.
Lamb takes immense pride in ILG’s early success. “We started with 31 locations in 2018, and by the end of this year, we will have doubled in size,” he says. “We have nine brands under our umbrella, and we have pursued growth in the right way. We’re fair and respect what the sellers have done.”
The retailer concedes, however, that with a business model based on acquiring existing stores, “those opportunities are becoming fewer.” Moreover, others have noticed what ILG has accomplished, Lamb says, and the competition to acquire stores is heating up. Still, ILG remains committed to its strategy of acquiring small liquor stores. In fact, Lamb says, it’s widening its search. “We will look at opportunities outside of Indiana,” he reveals, “as this model has been a key to our success.”
American
STORY
VANESSA PATEL CAME TO THE U.S. 33 YEARS AGO AND HAS LEARNED AMERICAN CULTURE THROUGH DRINKS RETAILING
Vanessa Patel immigrated to the U.S. in the 1990s, and began developing her as-yet-unused palate for wine while working at her brother’s liquor store. In 2005 she opened her own shop, A1A Fine Wine & Spirits, and has continued honing her tasting skills.
W hen Vanessa Patel immigrated to the United States 33 years ago, she had never taken a sip of alcohol. Her hometown in India was dry, and she had never had the opportunity to try wine, beer, or spirits. Her brothers, Sunny and Roger Patel, who preceded her in immigrating to the U.S., embraced the entrepreneurial opportunities the country had to offer, starting beverage alcohol retail businesses in Florida. For Patel, coming to America meant joining the new family business.
It also meant honing a skill she never knew she had. Patel, who started her own store in 2005, remembers those early days of learning about wine in her brother Sunny’s store. Later, when she began attending tastings and events, she and others realized her unusual palate. She says from her first introduction to wine, she could assess the different nuances and levels of quality. Recalling one of her first tastings, she says, “I tried 15-20 different wines side-by-side. Immediately I could tell what was a good wine and what was a good value for the money,” she says. The supplier representative was in shock, Patel says, by the fact that her novice palate was so well developed.
Patel has put that skill to good use in subsequent years, tasting her way through wines from all over the world and bringing her findings back to her loyal clientele in Palm Beach Gardens, Florida, where she owns and operates A1A Fine Wine & Spirits. Together the Patel siblings own nine stores from Port St. Lucie to Fort Lauderdale, Florida, but Vanessa focuses solely on her tiny, 2,100-square-foot store.
Because of her intense focus on quality offerings at all price points and her commitment to extraordinary and personal customer service, Patel has been named a 2024 MARKET WATCH LEADER.
Wine makes up the bulk of sales at A1A (interior pictured), accounting for a majority sale of 65%. Patel cultivates deep personal relationships with her clients and selects unique wines to fit their individual palates.
Early Learnings
When she arrived in the U.S. in the 1990s, Patel dove head-first into learning about her brothers’ retail businesses. “I started with my brother Sunny—that’s where I learned about wine and spirits,” Patel says. She adds that for her, spirits were straightforward, but learning the names and labels for the wines the store carried was a bit more challenging, but also intriguing.
“He was ordering Wine Spectator,” Patel recalls. “This is a seasonal business in Florida, so when there was time I was reading Spectator. I’d read from the first page to the last page. I [started to compare] what I was reading with what we had in the shop. I’d find a few items, [but perhaps] not the same vintage. But that’s where my curiosity started and was how I got excited about wine.”
Later, when Patel launched A1A Fine Wine & Spirits, she delved deeper. “I began attending the trade shows, going to the wine tastings, and visiting the wineries,” she says.
The constant education gave her the confidence and the knowledge to make recommendations to her burgeoning client base. Patel’s store opened in a brand-new shopping complex, so there was no previous owner and no established customer base. In the early days, Patel’s clients in the well-heeled community would typically buy the big name, luxury wines of the moment by the case. Patel would try to mix things up, convincing them to remove one of the 12 bottles from the case and replace it with one of her more obscure selections. “They came back saying ‘you’re right, the one you selected was better,’” Patel recalls.
Now, Patel says she has earned her patrons’ trust, which she spent years building within the community. Many in Palm Beach Gardens and nearby towns are seasonal residents, and when in town they like to throw parties and get-togethers. “They invite their friends to their home or they go to their friends’ houses, and they want to show off,” Patel says. “They want to offer something different than what the chains and everybody else sells.” The curiosity spreads and more customers come to her on referral from her stalwart supporters, she says.
Service And Selection
Patel also likes to introduce her customers to a breadth of wines through in-store tastings. While the monthly tastings shut down during the pandemic and have only come back to the store on a seasonal basis, A1A Fine Wine & Spirits has a long history of introducing its clients to the best of the best. “I read about wines in the Spectator, and every year the top 100 list comes out, or every month the magazine [lists] highly rated wines,” Patel says, noting she uses those lists as a guide to introduce her key clients to a broad range of products. Wine tastings are usually conducted by a winery or distributor representative. “My wine tastings are fine, premium, and free,” she says.
Those efforts over the past two decades have given Patel a loyal customer base, many of whom rely on her as a personal shopper of sorts for wine. They have her cell number and regularly request that she order certain labels, which she happily does. She recalls fulfilling one longtime customer’s order—placed by WhatsApp—despite being in India for a family wedding. “Business doesn’t stop just because we are on vacation,” Patel says, noting she coordinated the purchase from afar then had an employee make the delivery. “I take care [of my customers] and they appreciate it.”
For all her regular clients, Patel seeks to understand their preferences. “Like a doctor understands their patient, I understand my client’s palate,” she says.
In addition to her focus on exceptional service, Patel curates an incredibly unique selection of wine at her store, carrying many wineries with smaller production numbers than most well-known brands (shelves top; wine room above).
That level of service is coupled with a “unique” selection, Patel says. A1A Fine Wine & Spirits doesn’t have a specialty focus for wine. Instead, Patel focuses on smaller production wineries all over the world that provide a unique and delicious experience for guests. That can present challenges, she says, because allocations for Florida are often small, and as a single store she gets only a sliver of that volume. Nevertheless, Patel says she’s always seeking new finds from around the world to excite her customer base.
When it comes to her own taste, Patel loves flavorful wines. “I love the Shiraz blends, I love Cabs, it could be Merlot too. I just like big wines,” she explains. The store caters to a higher-end clientele but its selection runs the pricing gamut, from $10 bottles for everyday drinking up to $2,000-$3,000 labels for the most discerning customers.
The store also carries spirits and is a certified retailer for Louis XIII Cognac. “We carry all the spirits, but vodka is No. 1,” Patel says. Like other retailers, she’s also seen a surge in demand for spirits-based RTDs. Tequila tops the list of growth categories within spirits, she says, noting that mezcal is also on the rise. Spirits overall account for about 35% of total sales at A1A Fine Wine & Spirits. The store doesn’t carry beer, so the remaining 65% of sales come from wine. Patel admits her partiality for the latter. “I sell everything and I sell it passionately, but personally I prefer wine,” she says. “That said, I welcome everybody and they spend whatever they want on whatever they like.”
Spirits make up roughly 35% of sales at A1A Fine Wine & Spirits (exterior top). Vodka remains the top spirit overall, though Patel notes that ready-to-serve cocktails (above) along with Tequila and mezcal, are fueling growth.
Boutique Approach
Perhaps because of her passion for and knowledge about wine, the category is thriving in her store. “Here, wine is king,” she says. “At my store I have five aisles—four aisles are wine and one aisle is for spirits.” Patel used to carry beer as well, but she found that carrying a small selection didn’t make sense, as she was always disappointing customers when she didn’t carry their preferred brand. And with the store’s tiny footprint, it wasn’t possible to carry a broad selection, so she decided to eliminate the category altogether.
Even with just wine and spirits, the space constraints mean brands have to churn sales in order to remain on the selling floor. Patel also is happy to order whatever her customers desire. Patel’s narrow approach is necessary given the nearby competition. Shortly after opening the store in 2005, Total Wine & More moved in just a mile away. Patel also contends with rivalry from Costco, the ABC Fine Wine & Spirits chain, and many others. “That’s why I found a niche—I have wines that [customers] can’t find elsewhere,” she says. “They don’t want ‘regular’ wines, they want unique stuff. This is a boutique wine shop, and with my palate and my passion, I provide them with a unique selection.”
A1A is decidedly old school in its customer service approach as well. The store offers delivery within a limited area, but there are no online sales. Instead, Patel prefers to have personal relationships with her loyal customers. “[Customers] ask for my cell phone number and I give it to them, and they just text me if they need something,” she says. “They get special service and they love that.”
Most of that service comes from Patel herself. She has only two employees, although in the early days both her brother and her son pitched in on occasion. “When you build up the business from scratch, you have to be there,” she says. “I wanted to make sure it was going to be a successful business. And now, when I’m here, this is my home.”
Not literally, of course. Patel goes home to her husband, who she says relies on her for wine recommendations. Patel’s adult son is now in another line of work, but she describes her store as her second baby. She’s content to continue ensuring it will thrive. “I’m always looking for an opportunity,” she says. “If something comes up, I’m always willing to do it, but this store is my baby. I raised it from the beginning and I am very passionate about it. I raised my son, and this is my other baby.”
GOING BIG
In Nebraska
NEBRASKA’S WINE, BEER, AND SPIRITS EMERGES AS A TOP RETAILER ON ITS OWN TERMS
Wine, Beer, and Spirits co-founder and CEO Beau Starkel didn’t intend to sell beverage alcohol full time. Rather, he started the store as a way to pay rent for the space during the Covid-19 pandemic. But the retailer has since become a powerhouse in Nebraska, boasting five locations across the state with an annual revenue of $35 million.
W ith so many of today’s leading liquor store businesses steeped in generational history, it’s somewhat unusual to come across a new business in the beverage retail industry that has assembled a chain of stores in just four years and has emerged as one of the largest drinks retailers in its home state. But that’s exactly what Nebraska’s Wine, Beer, and Spirits has done.
Ironically, Wine, Beer, and Spirits (WBS) isn’t the result of a long-researched business plan despite the fact that co-owners Beau Starkel—who serves as CEO—and Aaron Konen—the company’s CFO—met in business school. Rather, it was Starkel’s Plan B, as his original intention was to transform an old Toys “R” Us store in Omaha, Nebraska into an expansive events space, but that was scuttled early in the Covid-19 pandemic. With previous experience in beverage alcohol and hospitality, Starkel opened the first WBS store, a 30,000-square foot space, in April 2020. “I knew the beverage alcohol business so I decided to put up shelving and sell the products at a discount,” he says. “The plan was just to cover our rent until Covid was over.” But by the end of the year, a second location had been added in Lincoln, and in August 2021, Starkel unveiled the chain’s third and largest store in Grand Island. Late that year, Konen joined the business. A second Omaha location followed in March 2023, followed by the fifth store in Freemont about a year ago.
For an unparalleled rise in the face of a pandemic, along with his innovative ideas and commitment to ensuring a best-in-class experience for customers, Beau Starkel has been named a 2024 MARKET WATCH LEADER.
Fun Team Members
WBS, has five stores in the Cornhusker State and has already amassed annual sales of $35 million, while employing 85 workers. With stores as large as 50,000 square feet in size, the chain welcomes about 60,000 customers a month. Big numbers aside, the fast-growing chain has developed a reputation for always putting its customers first, whether due to its practice of hiring knowledgeable and fun team members, its lively on-site bars, or its extensive series of in-house events. In all cases, the company owns the buildings that house its stores.
While generic in nature, the concept’s name was actually given a lot of thought. “I wanted to have something Google-able,” Starkel says. “I didn’t want to call it ‘Bill’s’ because no one Googles ‘Bill.’ They Google wine, beer, and spirits.”
Although the units range in size from 5,000 to 50,000 square feet, layout of the stores is fairly consistent. “Every store features a beautiful, long bar, just as you walk in, where customers can try all of the new, hot products and exclusive Bourbons,” explains Starkel. “The premise is that customers will come in, slow down, relax, and enjoy themselves.” Thanks to the on-site consumption licenses, customers can also sip while they shop. Three of the locations, including the original store, feature Bourbon rooms. And in an homage to its roots, the chain employs a tongue-in-cheek giraffe as its mascot (like the original store, the Lincoln unit is also housed in a former Toys “R” Us). “We like to play on the nostalgia,” says Konen. “A lot of our customers remember going into those stores as children. They think it’s a hoot that they can go into their old toy store today and buy booze.”
Spirits are the biggest category at WBS, with 6,000 SKUs. Whisk(e)y is one of the heavy lifters (Irish selection top) led by Four Roses and Woodford Reserve. Wine holds 15% of all sales, with over 3,000 SKUs (rosé shelf above).
Wine, Beer, and Spirits’ employees, though, are the company’s crown jewel, the pair say. “A lot of our employees were hired out of the service industry,” notes Konen. “They were bartenders, craft cocktail mixologists, restaurant servers. They’re fun and have a knack for service. We’ve been able to create an environment with our staff that’s fun so people want to hang out. That experience is what makes us different.” To further their skills, WBS team members are encouraged to partake in training offered by distributor partners, to take online courses, and to make visits out in the field, such as to distilleries for barrel picks and to wineries. Starkel adds that he’s proud of the talent they’ve retained. “Most of the people we originally hired still work for us, and they still love their jobs,” he says.
That enthusiasm hasn’t been lost on the chain’s patrons. A customer survey released earlier this year garnered 3,000 responses, Konen says, and an overall score of 4.8 on a 5.0 scale. Some 98% of the respondents said they have had an overall good experience at WBS, and 99% said they found the staff friendly and helpful. “When I’m having a bad day, I pull out the survey,” he says. “It gives me encouragement that we’re running this business the right way and are focused on the customers.”
Large Selection
Spirits are the big seller at WBS, accounting for 60% of sales. Beer follows at 20%, wine at 15%, and miscellaneous items at 5%. WBS stocks about 6,000 spirits SKUs, priced as high as $4,000-plus for a 750-ml. of Louis XIII Cognac. Top-selling brands include Tito’s vodka ($20 a 750-ml.), Bacardi rum ($14), and Four Roses ($25) and Woodford Reserve ($35) Bourbons. “Bourbon is the hot topic,” says Konen, and as a result the chain offers about 100 store picks a year. Most recently, Konen says he’s seeing “a lot of traditional whisk(e)y drinkers converting to Tequila, including additive-free Tequila.” As in other markets, the retailer adds that ready-to-drink cocktails have been “exploding” in Nebraska.
About 2,500 beer SKUs are featured at WBS. This summer, the chain was seeing “a movement back toward major domestic beers, and away from crafts, due to inflation,” Konen notes. “People aren’t feeling as firm in their pocketbooks, and a 4-pack of craft beer is $13.” Rather, items such as 30-packs of Busch Light ($24) are performing well at the chain. When customers are splurging on beer, brands like Corona Extra ($16 a 12-pack at the Lincoln store this summer) are popular, Konen says. Consolidation is impacting the craft beer segment, the retailer adds, but WBS continues to support local breweries like Kinkaider and Thunderhead. “They’ve got some great products and we like to shine a light on them,” he says.
Spirits are also the hottest seller at WBS at roughly 60% of total sales. In addition to whisk(e)y, Tequila (display pictured) and RTD cocktails are also in the game. Starkel says that many traditional whisk(e)y drinkers are exploring Tequila options.
The chain stocks about 3,000 wine SKUs priced as high as $1,000-plus for some first growths from France. “Mid-tier prices—$10-$25 a 750-ml.—are hot right now,” Konen says. “Wine has been an interesting department for us,” adds his partner, pointing to the “commoditization” of the category in Nebraska, where virtually any class of trade can sell all forms of beverage alcohol. In addition to competition from other retailers, Starkel points to competition from wineries that sell direct to consumers. While WBS doesn’t yet offer any private-label or control wines, it recently joined the Wine & Spirits Guild and will have access to unique wines as a result. Boxed wines, meanwhile, are a bright spot for the chain, Konen says, and more space is being devoted to the packages.
Standout Customer Experience
With a strong commitment to ensuring that customers have a standout experience at Wine, Beer, and Spirits, it makes sense that on-site events and tastings are a big part of its marketing program. “We do about five events a week at all stores,” says Starkel, ranging from complimentary new product samplings to sit-down Scotch tastings ($45 a person). The on-site bars are perfect for events like the recent Empyrean Brewing tap takeover and frequent new Bourbon releases. Outdoor patios help extend the hospitality experience, and visits from local food trucks and bands are common.
Advertising support is generally comprised of social media platforms like Facebook and Instagram, but when a new store opens, traditional formats including billboards and print ads are utilized. WBS also frequently supports local community groups in their fundraising efforts and through donations.
Beer is the second largest category at WBS, with 2,500 SKUS and 20% of total sales (selection top right). Starkel notes that inflation is driving shoppers away from craft brands and back to big-name domestic labels (non-alcoholic options top left). WBS is facing stiff competition in Nebraska, and has no immediate plans to expand beyond its current locations (exterior above).
Wine, Beer, and Spirits’ unique focus on the customer experience is helping it to stand out in a tough competitive market. “It’s amazing how many competitors we have,” says Starkel. “Alcohol is sold on every corner, and there are no stipulations on separating beer from wine or spirits.” Konen adds that even though there are only 2 million residents in Nebraska, the “intense competition” has prompted the chain to create a niche for itself. “We had to consider what would drive customers in because we’re not a grocery store and we’re not a convenience store. The customer experience has been at the forefront from the beginning.”
The quick rise and success of WBS hasn’t gone unnoticed by large beverage alcohol players, and competition within the Cornhusker State is expected to heat up further. Grocer Hy-Vee launched its Wall to Wall Wine and Spirits division in 2021, and three of its four stores are located in Nebraska. Powerhouse Total Wine & More, meanwhile, reportedly has plans to open at least one store in Nebraska. As a result, the team at WBS will “hunker down,” Starkel says, and has no plans for new stores at this time.
In the meantime, other beverage alcohol retailers will need to play catch-up. “To build five stores in four years and grow the way we have in this business isn’t normal,” says Konen. “We’ve come to realize how different we are. Other operators in this business are third-generation businesses. We’ve broken the mold, and now we’re the leader in the state.”
Best-in-Class in
CONNECTICUT
A 70-YEAR-OLD CONNECTICUT CHAIN, M&R LIQUORS PROVIDES BEST-IN-CLASS CUSTOMER SERVICE
With about 45 years experience in beverage retail, Neal Rounseville’s secret weapon is a keen understanding of what customers want. Under his leadership as vice president, M&R Liquors has become an exemplar of superb customer service and education.
N eal Rounseville is the consummate wine salesman. After some 45 years in the beverage retail business, he’s got all the right tools to cordially engage customers, share his knowledge, make the sale, and then get them to return. “We always strive for excellent customer service,” says the vice president and second-generation owner of Connecticut’s M&R Liquors chain. And that starts from the minute a customer walks into the store. “We do our best to engage with them,” Rounseville explains, “and keep the conversation going.” For example, rather than asking if a customer needs help, M&R staff is encouraged to share some type of knowledge about a wine. “If you ask them if they need help, and they say, ‘no,’ you’re done,” the retailer explains. “Rather, we focus on jumping to the second line of the conversation. If someone’s shopping for a Chardonnay, for instance, we may tell them about the last Chardonnay that we enjoyed. It starts a conversation.”
With six stores that circle the greater Hartford area, M&R boasts annual sales revenue in excess of $20 million. Wine accounts for 38% of sales, followed by spirits at 32%, beer at 25%, and miscellaneous items at 5%. Stores—located in South Windsor, Avon, Farmington, Glastonbury, Manchester, and Southington—range in size from 8,000 to 10,000 square feet. One of the oldest multi-unit liquor store operators in the state, M&R employs 65 workers, many of whom are long-term staff members. “The new guy has been with us for five years,” says Rounseville. “It’s unusual for us to hire a team member who only stays for one or two years. Our staff enjoys the customers, and they enjoy the products.”
For his commitment to helping educate guests and providing best-in-class customer service, Neal Rounseville has been named a 2024 MARKET WATCH LEADER.
Spirits account for 32% of the sales at M&R and span some 2,600 SKUs. Bourbon is one of the main attractions (whiskeys above) and the retailer offers upwards of eight barrel picks a year.
Family Business Blossoms
Founded in Glastonbury in 1952 by Rounseville’s parents, Marrion and Roy, M&R experienced tremendous growth in the following decades as the bedroom communities around Hartford, the state capital, as well as the insurance capital of the country, were built out. During the ’50s and ’60s, stores were bought and sold, with the chain reaching as high as 14 units in the early ’70s. In 1972, the original Glastonbury store was moved and rebuilt across the street—with “sweat equity” help from family members, the retailer notes—where it still sits today. Rounseville and his brother Gary—who was named a MARKET WATCH LEADER in 1997—joined the family business that decade, and decisions were made to pare down the number of stores to concentrate on the markets with the most opportunity.
In the 1980s, the Rounseville brothers took over the family business. “My father said that when he retired to Florida, he was close enough that he could come back if we screwed it up,” Neal recalls. “Well, he never did have to work again.” The South Windsor store, now considered the flagship location, was built in 2008 with a second-floor events space for staff and customer tastings. In 2017, an accidental fire burnt the Manchester store to the ground, but, fortunately, it was rebuilt in time for the Christmas holiday that year. Gary, now retired, still serves as president of the company. And the third generation of Rounsevilles is also involved in the business—Gary’s son, Ian, oversees the chain’s IT functions, and Neal’s son, Kyle, attends to company finances.
While Neal helped out maintaining the stores as a youth, he joined the family business full time at age 21. “I’ve done everything from running the stores on a day-to-day basis to receiving training on wine and other products to modernizing the business from a technology standpoint,” he says, including bookkeeping, inventory, centralized pricing and ordering, payroll, and insurance. His eye for high-quality craftmanship is also evident in the stores, which all feature custom-made wine shelving, designed to convey a sophisticated wine shop.
Quality Seekers
M&R stocks about 4,000 wine SKUs, generally priced from $7 a 750-ml. of Barefoot Cabernet Sauvignon to $400 for the 2019 Opus One. Top-selling labels include Apothic Winemaker’s red blend ($10), Meiomi Pinot Noir ($18), Kim Crawford Sauvignon Blanc ($15), and Sonoma Cutrer Russian River Valley Chardonnay ($22). Rounseville says that consumers are drinking a little bit less these days than in the past, yet “they don’t mind spending a little more to get the quality they want.” As a result, reds including California Cabernet Sauvignon, Pinot Noir, and blends are faring well. Among white wines, Sauvignon Blancs are popular, the retailer says. “That’s a category where consumers are looking for quality, but they’re not as willing to spend as much as they would for red wines.”
To aid customers in discovering new wines and wine regions, the chain boasts its own “M&R Direct” wines, which include selections sourced through its membership in the Wine & Spirits Guild. “The selection keeps growing,” Rounseville says of the line, driven by the good value they offer customers. He also sees opportunity ahead for white wines from Oregon. “There are some outstanding Chardonnays coming out of Oregon. We’re optimistic that might be the next big thing,” the retailer notes. Half bottles are another emerging trend, and the stores now offer dedicated sections for 375-ml. splits. “Consumers are looking for better quality wines in half bottles,” Rounseville says, “even if they’re paying more per glass.”
Another growth area in wine for M&R is its e-commerce sales. The chain ships product to consumers in any states where it legally can, and already, that business accounts for as much as 12% of the chain’s wine sales. “And it’s growing all the time,” Rounseville says.
With 38% of total sales, wine is the star at M&R. Each location has custom-made wine shelves (above) to elevate the shopping experience. Meanwhile, beer makes up about a quarter of sales at M&R (coolers below).
Some 2,600 spirits SKUs are stocked at M&R, priced from $11 a 750-ml. for Hiram Walker Peppermint schnapps to $600 for the Glenlivet 25-year-old. Top-selling labels include Tito’s vodka ($30 a 1.75-liter), Bacardi rum ($22), and Canadian Club whisky ($20). As at other retail shops, Bourbon drives traffic to the stores, Rounseville says, although if customers can’t find a new coveted brand, they often leave empty handed. “We just can’t get enough Bourbon,” he laments. “It’s become the drink of choice for educated sippers.” M&R releases upwards of eight barrel picks a year, but demand for those products is slowing, Rounseville notes. “Consumers are constantly searching for a new Bourbon, so if they’ve already tried one from a particular producer, they’re not that interested in another one,” he explains. Lottery drawings are sometimes held for the allocated Bourbons M&R does receive.
RTDs, however, are a bright spot. “They’re the wave of the future,” says Rounseville. “Very few people want to buy all the ingredients to make a drink,” and the pre-made drinks simplify the process. Because of that, he believes that RTDs won’t be as faddish as hard seltzers but will have staying power. Brands like High Noon are priced at $20 an 8-pack of 355-ml. cans at M&R.
The retailer offers about 1,800 beer SKUs, priced from $6 for a 12-pack of 12-ounce cans of Busch Light to $33 for a 4-pack of Dogfish Head 120 Minute IPA in 12-ounce bottles. “Connecticut has become home to some good quality craft brewers,” says Rounseville, pointing to breweries like Counter Weight and New England Brewing. While craft beer isn’t surging like it was five years ago, “the craft business is still strong,” he says. Among crafts, Lawson’s Finest Liquids’ Sip of Sunshine ($16 a 4-pack of 16-ounce cans) is a top seller at the chain.
Customer Service Standout
While M&R’s product selection is impressive, its emphasis on customer service is what makes it truly stand out. For years, the Rounsevilles have encouraged team members to broaden their wine education by attending tastings, classes, and even visiting wine-growing regions around the world. “We’ve been very aggressive about educating our staff through events like monthly wine seminars,” the retailer notes, as well as an educational program that allows members to travel and “learn not just about the wine, but the culture and the food of the region,” he says, “and how wine plays a role in everyday life.”
Proper sales skills are also emphasized. “A liquor store is different from a hardware store, where the function of the staff is to find things for the customer,” Rounseville says. Rather, it’s important for beverage alcohol retailers to engage customers in conversations about the type of products they like and the occasions they may be celebrating. His pet peeves include clerks asking customers, “is that it?” at checkout and lack of eye contact.
M&R Liquors had as many as 14 stores at one point, but it’s significantly trimmed that number. Today, the chain has six stores throughout the greater Hartford, Connecticut area (South Windsor exterior pictured), generating more than $20 million in revenue.
To promote the stores, M&R largely relies on social media platforms like Facebook and Instagram. Monthly newsletters are also emailed to some 4,000 customers. “We try not to oversaturate our customers’ inboxes with emails,” Rounseville says of the program, “but rather, keep the messages informative.” In-store tasting events—such as the recent Italian wine tasting ($15 a person)—also help drive customers to the stores.
Rounseville has seen many changes in beverage alcohol retailing over the course of his career. In addition to increased competition from both brick-and-mortar and e-commerce operators, he cites the search for quality workers as an ongoing challenge. There are no immediate plans for additional stores, but that doesn’t mean the longtime retailer is slowing down. “Retail is a great business,” Rounseville says, “especially when I can develop a relationship with the customers. It’s all about the customers.”
A Family
LEGACY
BARRY BROUDY AND HIS FAMILY HAVE A LONG-HELD PASSION FOR EDUCATING AND ENGAGING WITH CUSTOMERS
Broudy’s Liquors was originally founded in the 1950s in St. Augustine, Florida. Today, Barry Broudy (pictured) and his sister, Joan, co-own Broudy’s, which is up to five stores throughout northeastern Florida.
“O ne of the biggest challenges we have as retailers is educating the consumer,” says Barry Broudy, co-owner of Broudy’s Liquors in Florida. “Our suppliers do a great job informing our employees, but the challenge can be translating that back to the customers.” So, the beverage alcohol retailer is on a mission to ensure that all of his customers gain some type of product knowledge, whether it’s through in-store events, product education classes, or simple interactions with staff members. Engaged customers, Broudy has found, spend more time shopping his stores, come back more frequently, and help spread the word about the retailer’s offerings.
Broudy’s Liquors is a northeastern Florida institution, with five stores located between Jacksonville and St. Augustine. Combined annual revenue is $25-$30 million. With two locations in St. Augustine, and one each in St. Johns, Jacksonville Beach, and Fleming Island, the chain employs 50 workers. Spirits are the biggest driver for Broudy’s, accounting for 60% of sales, followed by wine at 25%, beer at 10%, and miscellaneous items at 5%.
Spirits are the main driver of sales at the Broudy’s chain (St. Johns, Florida exterior top), accounting for a whopping 65% of sales from about 2,200 SKUs. The stores have a growing emphasis on whiskies (shelves above).
The chain has served customers of its coastal communities for more than 70 years and recently welcomed fourth-generation family members into the fold. The first Broudy’s package store was opened in the early 1950s by Barry’s grandparents on North Ponce de Leon Boulevard in downtown St. Augustine. “It was essentially a counter-only operation attached to the family grocery store,” he explains. Barry’s father Martin “Baby” Broudy joined the business, and during the ’60s, space from the grocery was carved out, enabling customers to walk into the liquor store to shop. By 1970, the store was moved to a freestanding site but remained on “the same piece of dirt” as the original location, he says.
In the ’70s, Barry joined the family’s licensed business, and soon after, Broudy’s Liquors expanded into the Jacksonville market, driven by the store’s reputation for low prices that had spread as far as the city one hour north of St. Augustine. In subsequent years, a fourth store on Fleming Island was added. Around 2000, Baby Broudy began stepping back from the business and Barry stepped in and took over. A few years later, a fifth store in St. John’s was added.
For his commitment to building upon his family’s legacy and educating customers on their drinks’ journeys, Barry Broudy has been named a 2024 MARKET WATCH LEADER.
Renovation Wave
While the store count has remained at five, for the last two decades Broudy’s Liquors has been transformed into a chain of modern stores, averaging 5,000 square feet in size, with a growing emphasis on whisk(e)y and special events. In recent years—in addition to the involvement of his children Natalie and Porter into the business—Barry Broudy has led a big push into renovations, and in some cases, relocations of the stores. The Jacksonville Beach store, for example, was recently expanded and renovated, complete with an events space. Last year, the historic St. Augustine store was remodeled while the St. Johns store in the Julington Creek area was moved about 1,000 feet to a spacious 12,000-square-foot site. And in late spring of this year, that store’s crown jewel, a 2,000-square-foot education center and tasting room, was unveiled. “I’m trying to make each store unique and representative of its neighborhood,” Broudy says of the wave of renovations. And more are planned. At press time, Broudy—who is co-owner of the chain with his sister Joan—was in negotiations with the city of St. Augustine to build a downtown parking garage on a 6-acre tract owned by the family, a site where the original store will be eventually moved.
The St. Johns Julington Creek store—which Broudy describes as “the first store I’ve built from the ground up”—will certainly serve as a model going forward, with about half of its footprint devoted to selling space. The retailer describes the store’s design as a cross between a Florida citrus plant and a spirits rickhouse, with features that include wide aisles, high ceilings, exposed steel beams, and painted concrete block walls. The learning center contains a private lounge, about 70 lockers for leasing, and walls lined with whisk(e)y barrels. “It turned out better than I could have expected,” Broudy says of the store. “It’s large enough that customers can shop and comfortably mingle with staff and other customers.” Indeed, the spacious feel of the store helps to encourage shoppers to spend more time, and ultimately, more money. Average transactions at the site are at least 20% higher than at the other stores, he notes.
Since its inception, Broudy’s (interior top) has looked to innovate. As Barry continues to steer the chain toward future success in St. Augustine, the next generation is joining the business (Barry with daughter, Natalie, and son, Porter, above).
For his part, Broudy has served in virtually every capacity at the family-owned business over the course of the last 40 years. “I’ve done everything from sweeping the floor to being a cashier to being a store manager,” he says. Among the ways the business has changed is the increasing reliance on technology. “I remember back in the ’80s, my father wouldn’t take credit cards,” he recalls. “He thought we would go broke.” But in other ways, the business hasn’t changed much, Broudy says. “I’m still friends with people I’ve been doing business with for the last 30-40 years.”
Tapping The Bourbon Boom
Broudy’s stocks about 2,200 spirits SKUs, priced from Gilbey’s vodka at $8 a 750-ml. to $4,800 for The Macallan 30-year-old Sherry Oak Cask Highland single malt. “Bourbon is our top category, but Tequila isn’t far behind,” Broudy notes. Bourbon lovers flock to the stores for new releases, he says, but most recently they’re exploring products from beyond Kentucky. “I’m seeing Bourbons from Georgia that are making a name for themselves,” the retailer notes. Broudy’s single barrel Bourbon offerings, priced between $50-$130 and numbering some two dozen a year, are also popular, he says, pointing to a recent Elijah Craig 8-year-old ($90) as an example.
While Tequila is a strong category for the chain, “the response to new releases isn’t as crazy as it is for Bourbon,” Broudy says. Rather, “consumers are buying really good Tequilas at less than $100 a bottle and drinking them,” instead of collecting or directing them to the secondary market. Thanks to the falling price of agave, “we’re able to offer some really strong promotions on Tequilas, about $40-$50 a bottle,” Broudy notes. Additive-free Tequilas, such as Mijenta Blanco ($40 a 750-ml.), also perform well. Top-selling spirits at the chain include Crown Royal ($22), Jack Daniel’s ($22), Tito’s ($20), and Casamigos Blanco ($43).
Broudy’s offers about 1,600 wine SKUs, priced from $6 for a 750-ml. of Yellow Tail to $650 for the 2011 Colgin IX Estate Proprietary red. New Zealand Sauvignon Blancs rule at the Florida chain, led by Kim Crawford ($13). Sparklers, particularly Cavas, also perform well. “We sell more than 20 cases a week of Spanish Cavas,” Broudy says. Freixenet Brut ($10) is another top-selling wine at the chain, as is Woodbridge ($10 a 1.5 liter).
Some 2,800 beer SKUs are stocked at Broudy’s, priced from $11 for a 6-pack of 12-ounce bottles of Landshark Lager to $17 for Dogfish Head 90-Minute IPA. Top-selling labels include Coors Light ($10) and Modelo Especial ($12). In general, sales of craft beers are declining, Broudy notes. “Hard seltzers, FMBs, and RTDs are now competing for that space,” he says, with “co-branded” products, such as Absolut with Ocean Spray ($15 an 8-pack of 12-ounce cans), gaining ground. “Consumers know what they’re getting with those products,” he explains.
Building Knowledge
With the recent store renovations and expansions, Broudy’s goal is to ramp up on educational events for his customers. While the stores already hold frequent supplier-hosted product samplings—recent examples include Yellowstone Bourbon, Aviation gin, and E11even vodka—the new education centers and events spaces will allow team members to engage on a more one-to-one level with customers. Shortly after the unveiling of the Julington Creek learning center in St. Johns, Broudy’s hosted a complimentary Dewar’s Scotch tasting and bartenders competition, as well as a rosé tasting. The retailer expects to hire a manager for the space, with fee-based classes to be offered. “The room was specifically designed with education in mind,” says Broudy, pointing to plans for product education classes, cocktail classes, and Bourbon stewardship certification, “and at the same time, having a lot of fun.”
Wine makes up a quarter of sales across the five Broudy’s Liquors stores. With roughly 1,600 SKUs on offer, popular offerings at the chain include Sauvignon Blanc from New Zealand and sparkling wines (shelves pictured), especially Spanish Cavas.
The retailer works in other ways to build knowledge among his customers. Broudy is proud of the initiative he took during the pandemic, for example, to encourage out-of-work mixologists to partner with drinks suppliers on cocktail-making demonstrations at area liquor stores. “It’s turned standard sampling events into experiences,” he explains. “It’s been a giant leap forward in educating consumers.” Broudy is also a co-founder of the annual St. Augustine Spanish Food & Wine Festival, founded in 2013, and the chain serves as a sponsor of the event. Earlier this year, the festival raised more than $100,000 for Flagler College’s hospitality program.
Broudy’s ties to the community run deep, and the current ownership doesn’t see that changing. “We’re going to continue,” says Broudy. “My children were born and raised here, just like I was, and just like their grandfather. I see them becoming more of an intricate part of the community, much as I have been over the years.”
That doesn’t mean Broudy himself is going anywhere. “I’m that person who feels as though he’s never worked a day in his life because I really love what I do,” he says. “There’s always something new to learn, and that knowledge fuels the fire.”
THRIVING
In Seattle
DOWNTOWN SPIRITS LEVERAGES TRADITIONAL MARKETING TACTICS WITH NEW IDEAS TO STAY RELEVANT
Marques Warren (pictured), owner of Seattle retail stores Downtown Spirits and Esquin Wine & Spirits, and e-commerce site Madwine.com, is dedicated to finding the best, most exclusive products on the market and bringing them to his customers.
M arques Warren describes himself as a merchant of old. “A merchant would travel the world to identify goods that could be brought back to their home market and sold to local customers,” he says. “That’s what we seek to do.” Warren, a 2019 MARKET WATCH LEADER, owns Downtown Spirits LLC with his father Ardie. The wine and spirits retail entity consists of two stores and one e-commerce site: Downtown Spirits, Esquin Wine & Spirits, and Madwine.com. Currently, the operation is 51% owned by Ardie and 49% owned by Marques, but Marques says a transfer of Ardie’s ownership stake to him is underway and expected to be completed later this year. The two also own Cherry Hill Wine, a purveyor of fine wines and spirits to Seattle’s top restaurants and retailers, including those operated by Downtown Spirits LLC.
“To compete we have to source our own unique products and really stand behind them as a team. From our sales associates to our drivers to our managers, everyone needs to know what these products are,” Warren says. “That’s what differentiates us from a standard retailer or a big box retailer. We take to heart what it means to be a merchant and we want to live up to that definition.”
The Downtown Spirits organization leverages its exclusive items, offering discounts and membership programs that focus on churning sales. That strategy is coupled with more traditional marketing approaches such as in-store events, online marketing, and email communications. Because of his unique approach, Warren receives the MARKET WATCH LEADERS 2024 Best Marketing Award.
Course Change
When Warren was named a MARKET WATCH LEADER in 2019, he had big plans. His 11,000-square-foot downtown Seattle store was ready for renovation, with plans for an expanded in-store beer and wine bar and upgraded kitchen to complement the store’s retail offerings. Before work began in earnest, the Covid-19 pandemic hit. “Obviously everything was put on hold,” Warren recalls. “I was really glad I didn’t put hundreds of thousands of dollars into building out an on-premise component of the store, only to have on-premise businesses shut down through government regulation.”
A short time later, Warren was hit with another blow to his business. Despite multiple promises that the building would never be sold, he found out in November 2021 that the building housing Downtown Spirits was being sold. Warren admits he had thoughts of throwing in the towel on the beverage alcohol retail business. After all, he owns other businesses—such as airport retail stores—that could benefit from his attention.
But through his airport retail business and with help from airport retail partner Hudson, Warren had seen the power of Amazon’s Just Walk Out technology for retail. He contacted Amazon, and the two ultimately agreed on a licensing agreement for the Just Walk Out technology, and Warren got to work in a new location adjacent to the Amazon corporate campus.
As the new store was being developed, time had run out on Warren’s original store lease. Eager to fill the gap, Warren purchased Esquin Wine & Spirits, the state’s oldest independent wine merchant, in January 2023. Merchandise was transferred and licenses processed, and the store opened under new ownership on April 1, 2023. A short while later, Downtown Spirits reopened in its new location, becoming what Warren believes is the world’s first cashier check-out free wine and spirits store using Just Walk Out technology.
While spirits post the biggest business at Downtown Spirits, Warren is hoping that wine (white wine section top; red wines above) will overtake it. The store is known throughout the state for its wine and has become a destination for Washington’s wine lovers.
“It’s been a wild ride since 2019,” Warren says. “It’s been exhausting, but I think our business is stronger coming out of it. It is challenging to run a multi store business—even with just two shops it’s a different business venture than running a single store. And the two stores are very different.”
In addition to his Downtown Spirits LLC ventures, Warren’s business portfolio includes Warren’s News & Gifts, which operates retail stores at Seattle-Tacoma International Airport in partnership with Dufry AG’s Hudson. Warren says the partnership is expanding further with a new duty free contract awarded earlier this year by a Hudson and Warren joint venture. The project will operate a new duty free store slated to open in 2027.
Warren says his firm will act as the wine and spirits partner, coordinating with vendors and the Port of Seattle to ensure regulatory requirements are met. They will also oversee tastings, pop-ups, and other beverage alcohol brand experiences within the larger duty free store. “There will be a learning curve but I think it’ll pay off for us massively,” he says.
“It’s the same relationships, the same groups that we’re working with on the street side,” Warren adds, noting that the duty free store will provide a prime marketing opportunity as the Esquin and Downtown Spirits branding will be incorporated into the pop-up events.
The Esquin Approach
Together, Warren’s two retail beverage alcohol businesses embrace both tradition and innovation. Esquin inhabits the former. As a destination store with deep roots in the Seattle community, Warren embraced the culture created by former owner Chuck LeFevre. It wasn’t a distress sale—LeFevre simply wanted to retire, and Warren was eager to take the reins.
“It was a really great business so we spent the first few months just learning, and we didn’t want to tinker with anything,” Warren says of the store located in Seattle’s SoDo (South of the Dome) neighborhood, about three miles from Downtown Spirits. “We just wanted to learn the business that they were running so well, and to eventually take some of our best practices and implement them at that store. Then, of course, we took some of their best practices and implemented them in the broader business.”
The SoDo neighborhood is more industrial than residential, but decades of offering quality selection and service have made it a destination store. “It’s known throughout the state for its wine assortment and customers drive or travel dozens or hundreds of miles to shop with us when they’re in Seattle,” Warren says.
Twice-weekly tasting events also bring Seattle residents and visitors to the store, which Warren says thrives in the traditional retail format. The store spans about 15,000 square feet, a figure that includes about 4,000 square feet devoted to Esquin Wine Storage, a separate business of which Warren is the controlling owner. Wine is the key focus at Esquin, accounting for about 60% of beverage alcohol sales. Spirits account for about 30%, and beer makes up the remaining 10% of sales.
Warren says he’s seen a small shift towards more spirits in recent years, but he wants the focus to remain on wine. “Most of the items that Cherry Hill Wine sources and sells are wine products and in Washington, for me, wine is a far more profitable product to sell,” he explains. “Our marketing strategy is to sell more of our wine at both our stores. I understand and am well aware of the national trends, but that’s why the Esquin acquisition was a strategic move. “We wanted our business to sell more wine and Esquin has such a dedicated customer base that we can tap into.”
Innovation At Downtown Spirits
Warren would like to see a shift toward more wine at Downtown Spirits as well, but the store sales are currently about 60% spirits, 30% wine and 10% beer. The store, at just over 4,000 square feet, has a markedly different approach.
Downtown Spirits relies on Amazon’s Just Walk Out technology. Customers scan their credit card when entering, with staff on hand to ensure each customer is of legal drinking age. The technology then takes over, sensing when an item is removed from the shelf and employing multiple cameras to ensure the item is captured appropriately. After entering and verification, “customers put their products directly into their bag and then just walk out the store,” Warren explains. “We have to do a little bit of hand holding with customers sometimes—they can’t believe it and they’ll stop back at the greeter station on their way out.” Reassured, customers leave the store and within a minute or two have a receipt for each item purchased and the final purchase total on their phone.”
Downtown Spirits offers membership programs for its customers. A monthly CO-OP membership ($12) includes a 15% discount on CO-OP items and 5% off all other items (beer shelves above).
The technology allows Downtown Spirits to eliminate cashier positions, but Warren says the technology allows for labor redeployment rather than reduction. “We reposition them to the sales floor so that they can actually offer assistance to customers,” he says. “We work hard to provide educational opportunities to our staff members.” All staff has the opportunity to complete the Wine & Spirit Education Trust (WSET) Levels 1 and 2 certifications, and Downtown Spirits (encompassing Esquin as well) will fly staff to the location necessary to sit for the exams.
“Even if someone’s only with us for a short period of time, I want them to leave knowing a bit more about wine, spirits, and beer,” Warren says, noting that as they grow professionally, those staff members are increasingly on the sales floor “so they can be more hands-on with customers.” Warren adds that staff is expected to “push products that we are sourcing ourselves, which is part of our marketing focus.”
Marketing Strategies
Both stores and the e-commerce site “carry all of the staple items you would expect from a packaged wine and spirits shop,” Warren says, but wines distributed by Cherry Hill gain the limelight. “We work with great wineries across the country—California, Oregon, and Washington are really, really strong for us,” Warren says. “Also, [we have] some great importers, along with other direct items that we source through the Wine and Spirits Guild of America. Our goal within the next year to a year and a half would be to have [those wines] account for a least a quarter of our sales. Right now, it’s about 15% of our sales.” He notes that Cherry Hill also sells product to Seattle-area restaurants, grocers, and other off-premise accounts.
Downtown Spirits, including Esquin and Madwine.com, offers membership programs that help drive sales of those Cherry Hill-distributed brands. A monthly CO-OP membership ($12) includes a 15% discount on CO-OP items, and 5% off all other items. It also includes unlimited free delivery and other perks. A Spree membership, at $3 a month) offers the product discounts alone.
“The membership programs drive customer loyalty in addition to driving customers to purchase those items that we strategically want them to buy,” Warren says. Within the stores, differently colored shelf labels differentiate CO-OP items from others. In the Downtown Spirits store, electronic shelf labels allow staff to update pricing or offer a sale price instantaneously. “At the push of a button, you can push out pricing to thousands of items,” Warren says. “It’s updated within a minute and then at the end of the sale it automatically reverts back to the regular pricing.” The technology feeds into Warren’s overall aspiration to be a digitally focused company. The online business currently accounts for about 12% of sales after peaking during the pandemic. “But our online presence is really one of our best resources to draw customers into the stores,” Warren says.
Downtown Spirits utilizes Amazon’s “Just Walk Out” technology, allowing customers to scan their credit card when they come in, grab any product off the shelf (Scotch shelf pictured), and walk out without checking out the items. Shoppers are billed digitally when they leave the store.
“We’ve prioritized driving customers to our branded City Hive sites in order to ensure continued delivery to these customers that have grown to rely on us,” he adds. “Our delivery business encompasses a bit more. It’s not just those digitally sourced transactions, but we’ve identified a customer segment in corporate customers that has been a real driver of our business. These customers are provided White Glove service from our corporate accounts team, and those customers expect an exacting service level that we’re really well-tooled to provide.” Digital focus notwithstanding, Warren acknowledges that many customers also desire the human touch. In-store experiences are crucial to building customer loyalty. Esquin takes the lead with tasting events every Thursday and Saturday. At Downtown Spirits, momentum on in-store events is ramping up as workers continue to return to offices.
What’s Next?
Warren is all-in on Amazon technology and is considering implementing the tech giant’s latest offering: a system that can track items as they are placed into or removed from a cart. A screen keeps track of each purchase for the customer. “If we acquire new stores [or possibly for Esquin as well], it looks to be a great tool,” he says. On acquisitions, Warren is “continuing to look at store locations from Bellevue to Snohomish County in the north end of the greater Seattle area.”
Warren is also considering an additional perk for his members—adding unlimited free shipping in addition to unlimited free delivery. Finally, Warren is investing in the industry that has given so much to him. At press time he was awaiting final IRS approval for a non-profit called Warren’s Wine Foundation, which will focus on providing educational opportunities, through WSET programs, to people from non-traditional wine drinking communities.
Noting the numerous career opportunities for individuals with wine education, Warren says he wants to provide exposure to those who might not have it on their radar. He notes specifically that many within the Black community are eager for wine knowledge and the food and beverage industry is eager for knowledgeable workers, saying “I think our foundation, once it’s up and running, will help to bridge that gap.”
Above And
BEYOND
FLORIDA’S ABC FINE WINE & SPIRITS MAKES CHARITABLE GIVING A PERSONAL AND FINANCIAL CAUSE
ABC Fine Wine & Spirits is a family business that has been passed down through generations since its inception. Brothers Charles Bailes III and Jess Bailes (pictured left to right) currently run the company their grandfather, Jack Holloway, created in 1936.
W hen you enter one of the 127 ABC Fine Wine & Spirits locations scattered throughout Florida, you’ll find the company’s motto emblazoned on signs that read, “Always Be Celebrating.” And for ABC’s owner and CEO Charles Bailes III and his younger brother Jess, ABC’s executive vice president, a celebration can take many forms. “People come to us to prepare for celebrations. Sometimes those celebrations are happy, and sometimes they’re not, but that’s the business we’re in,” says Charles. “Either way, we want to be present in the communities that we serve, and we have been for almost 90 years, both in good times and bad.”
Indeed, community aid has always been a key part of the operation at ABC Fine Wine & Spirits, and everyone within the company, from the cashiers on the sales floor all the way up, is committed to giving back. Millions of dollars have been raised by the team at ABC for charities such as the National Pediatric Cancer Foundation, United Cerebral Palsy of Central Florida, and the Coastal Conservation Association, among others.
“It’s part of who we are,” Charles says. “We’re a service organization, and part of service is recognizing need. We can’t solve all the problems, but we can certainly be part of the process of helping.”
For their devotion to serving their communities and prioritizing those in need, Charles Bailes III and Jess Bailes are the recipients of the 2024 M ARKET W ATCH LEADERS Community Service Award.
Providing Access
There are a number of organizations that ABC Fine Wine & Spirits is involved with, but perhaps none more so than United Cerebral Palsy (UCP). This organization is active throughout the country, but in central Florida it’s a multi-county organization that treats kids with all kinds of special needs and learning disabilities. It’s a cause that hits home for the Bailes family, as the Bailes’ uncle was institutionalized for cerebral palsy and died at the young age of 30. UCP of Central Florida has 11 campuses that host over 3,000 kids, providing access to resources they may not otherwise get. “It allows these kids to get therapy, education, and socialization during the day and then to go home to their loving families at night rather than being in an institution,” says Charles.
ABC Fine Wine & Spirits currently has 127 locations throughout Florida, with the newest model in Winter Garden, Florida (pictured). The brand new store features a walk-in beer cave and up to 12 cooler doors, as well as a cigar humidor.
Over the years, ABC has raised millions of dollars and built campuses for UCP with the help of their customer base and others in the wine and spirits industry. “When they put the call out for a new campus or a new building, you have to raise those dollars,” explains Charles. “The wholesalers are so supportive and generously give, or we wouldn’t be able to do the things that we do for those in need. I think anybody would tell you that the beverage industry is a very giving and generous group.”
As a family business, ABC prides itself in lending a hand to families who are struggling. On top of the families they help through UCP, ABC also has a hand in aiding families affected by pediatric cancer. Charles and Jess have been participating in the National Pediatric Cancer Foundation’s “Fishing Funds The Cure” fishing tournaments for about ten years.
“My buddy Mark Bailey with Constellation Brands was involved with a fishing tournament out of St. Pete at the time and asked me if I wanted to go fishing with him. So on a Friday afternoon we brought pediatric patients at the local hospital down to the dock and they would catch little brim fish. And then the next year some of those kids wouldn’t be there because they had passed,” says Jess. “I mean, it just really tugged at my heartstrings. I just saw an unbelievable need and learned a lot about pediatric cancer that I didn’t know.”
To raise funds for new pediatric drug trials, ABC implements a six-week round-up program every year, allowing customers to round up to the nearest dollar amount, donating the extra change to the Nation Pediatric Cancer Foundation. “Last year we raised about $275,000,” Jess says, adding that donations for the entire 2023 year, “blew past a million.”
“You watch these kids fish off the dock and it’s the highlight of not just the day or the week, but the highlight of their life. They just don’t get exposed to those kinds of things,” says Charles. “I participate, but I’m kind of the cheerleader along with the rest of the ABC team. Jess and Mark Bailey kind of carry the banner on that one.”
Everyone at all levels of ABC lends a helping hand to those who need it most. Charles notes that team members from each ABC store make annual trips to volunteer at smaller, more local causes, helping out at food pantries or homeless shelters in the community. Team members also have a say in the organizations ABC gives back to, and are able to make suggestions for causes specifically dear to them. “We keep our ears open to what the needs are and listen to our team. If they’re involved in something, then we want to stand beside them and help,” says Charles. “Our mission is to make everyday celebrations better for our guests, our team members, and the communities we serve.”
A Business Evolves
From the time of its inception in 1936, ABC Fine Wine & Spirits has been a family business. The original location was opened by Jack Holloway, Bailes’ grandfather, in downtown Orlando. Holloway had been working across the street at a cigar store when Prohibition was repealed and he saw an opportunity to delve into the wine and spirits industry. Jack Holloway’s Friendly Neighborhood Bar opened as a small bar and package store, and throughout its 88 years of operation, the business has evolved quite a bit. In the 1950s, Holloway changed the store’s name to ABC to assure it would always be the first in the phone book, and they did away with the bar and lounge spaces in the 1990s in order to focus solely on retail. Today, the 127 ABC Fine Wine & Spirits locations in Florida span from the Panhandle to Miami, with the largest store at a spacious 25,000 square feet.
One thing that hasn’t changed about ABC is the ownership, which has cycled through the generations. Charles came aboard in 1975 upon graduating from college. “My grandfather and my father wanted me to come into business, but they wanted me to want to come into the business,” he says. “And so they told me to go interview for jobs, which I did, and get the best job offer that I could. And if I was interested, they would match it.” After getting job offers in different parts of the country, Charles decided to try his hand at the family business. “That can be a good decision, but it can also be a bad decision,” he notes. “For me, it was a very good decision. The rest is history.”
Beer (top) makes up 12% of business at ABC stores, while wine (above) accounts for roughly 30%, but in recent years shoppers have been gravitating to RTDs, which Charles says is one of the store’s best-selling categories.
Jess joined the business around the same time and together, they kickstarted the family’s third generation of leadership within the company, taking full control in 1994. The company is one of the nation’s largest family-owned and operated beverage alcohol institutions. ABC is now welcoming its fourth generation, joined by Charles’ son Charlie Bailes on the administration side and son-in-law Sean Kelly, who does marketing and public relations for the company. “I joined ABC as a marketing consultant about seven years ago at a time when Charles wanted to engage and acquire guests differently with ABC’s marketing and advertising,” says Kelly. “I did not intend to join the family business initially, but a two-month project somehow turned into a new career. By the time Charles asked me to stay on full-time, I think he already knew I’d say yes because of his confidence and belief in ABC’s culture, the team, and the vision he has for the company.”
Charles has led the third and fourth generation of his family, as well as the 1,500 team members ABC employs, in expanding and revolutionizing the ABC Fine Wine & Spirits brand. He and Jess became MARKET WATCH LEADERS in 1994, and have since been recognized for several LEADERS awards including Best Advertising, Best Merchandising, and Retailer of the Year. Under his leadership, the ABC stores have gone from your average liquor store to the modern, full-service model it is today. “Charles thinks like an engineer and has a superior ability to see opportunities and breakdown problems quickly to find solutions,” says Kelly. “I think what draws people to him as a leader is his unwavering optimism, the patience he shows for people trying to do the right thing, and his genuine compassion for team members and the communities ABC serves. Nobody chokes up faster than Charles when he speaks about the enormous pride he has for ABC team members who have made the company what it is today.”
Spirits Forward
While revenue is undisclosed, industry sources estimate that ABC brings in about $800 million split between spirits, wine, beer, cigars, and miscellaneous goods. Spirits accounts for about 50% of sales at ABC, and Charles notes that Bourbon and Tequila are the top-selling categories. When it comes to Bourbon, Jack Daniels ($40 a 1.75-liter bottle) and Makers Mark ($49) are top sellers at ABC, while Jameson ($46), Crown Royal ($47), and Johnnie Walker ($64) are among favorites in terms of imports. As for Tequila, Patrón Silver ($44 a 750-ml.) and Casamigos Blanco ($49) are the store’s best-selling premium selections, but there is also traction in the luxury segment, particularly for Clase Azul ($170). As for vodka, Tito’s is “still a monster” according to Charles, selling for $30 a 1.75-liter.
Spirits do a big business at ABC stores, particularly Bourbon and Tequila. Staff at ABC make a point to showcase their top picks for Bourbon in a special display (pictured).
Wine makes up around 30% of sales at ABC, and there is a particular affinity for Cabernet Sauvignon and Chardonnay amongst ABC customers. Kendall Jackson Chardonnay ($11 a 750-ml.), Kim Crawford Sauvignon Blanc ($13), and Woodbridge Chardonnay ($10) are some of the most popular white wines at ABC, while Josh Cabernet Sauvignon ($11) and Meiomi Pinot Noir ($18) are the best-selling reds. Caymus Vineyards Cabernet Sauvignon ($83) is an ultra-premium offering that performs well at ABC, as does super-premium sparkling wine Veuve Clicquot, which sells for $56. The company’s Sourced and Certified program has been a hit with wine-loving Floridians looking to try new things. Wine and spirits in the Sourced and Certified collection come directly from the vineyard and are exclusively sold at ABC Fine Wine & Spirits stores throughout Florida. All products from the collection are certified by the company, so if the consumer doesn’t enjoy what they purchased, they can return it to the store and replace it with a bottle of the same value. “It helps us expose our guests to items they haven’t seen before,” says Charles. “Some of the labels may be sold in other states, but you won’t find them in Florida.”
Beer accounts for 12% of sales at ABC and newer stores feature walk-in beer caves that house myriad domestic beers and top-selling imports. New locations also feature a row of 12 cooler doors to showcase RTDs, one of the hottest categories at ABC. “Younger generations are moving to RTDs,” says Charles. “And we’ve certainly experienced that here at ABC because it’s warm in Florida and those beverages are consumed cold and are ready to drink.” High Noon Sun Sips and White Claw are the store’s best-selling RTD products, retailing for $28 and $19 a 12-pack of 12-ounce cans, respectively. Cigars and miscellaneous snack items make up the remaining 8% of sales, and with many ABC stores featuring walk-in cigar humidors as Charles notes, “that business is very healthy here.”
Service First
Despite all the success the family business has reaped, Charles and Jess view ABC as a service organization first and foremost, and they prioritize serving the community in every way possible. “If someone ever asked ‘why do you do it?’, I would say, ‘that’s why we have our daytime jobs,’” says Charles. “We’re very fortunate to be in a position where we can support those in need.”
When asked about future plans to give back, Charles is enthusiastic about one particular development. “We’re getting ready to build a new United Cerebral Palsy campus,” he notes. “So any suppliers or wholesalers that read this article will know that soon we’ll be coming back to them and saying ‘will you please help us?’” ABC Fine Wine & Spirits continues to add to the already hefty list of charities it contributes to as the need arises within the community, and charitable organizations can request aid from the company by visiting the ABC website.
2024 LEADERS CHOICE AWARDS
SPIRITS BRAND OF THE YEAR
ESPOLÒN
This brand has emerged as a titan in the super-premium Tequila space
Campari-owned Espolòn has seen year-over-year gains for the last decade, and even surged 23.2% last year as Tequila growth slowed.
T equila has been the hottest growth story in the U.S. spirits market, with total volume at 31 million cases in 2023, compared to 13.6 a decade ago. Despite its dramatic upward trajectory, the category’s growth last year was fairly modest: The entire segment saw a 5% rise, with many top brands up single-digits and others declining, according to Impact Databank. But amid those performances, Campari America’s Espolòn brand surged ahead with an explosive 23.2% gain. It was just the latest chapter in Espolòn’s history of posting double-digit growth under ownership by Campari—a track record which has earned it this year’s Spirits Brand of the Year award.
Campari brought Espolòn into the fold in 2009, when its American division purchased producer San Nicolas Distillery. A U.S. relaunch would come in 2010; the Blanco retailed at around $25 a 750-ml., while portfoliomate Cabo Wabo Tequila stood at $35. Espolòn quickly distinguished itself, clawing its way past 100,000 cases by 2013 and earning “Hot Prospect” honors the following year. Over the next two years, the brand would double in size to around 200,000 cases. In 2017, Espolòn notched its first “Hot Brands” nod after coming off a 38% gain over the year before. By year’s end, volume had swelled to nearly 300,000 cases.
Espolòn truly began hitting its stride around 2018, benefiting from a shifting tide that impacted the whole category. The years leading up to the pandemic saw a growth spurt from super-premium Tequilas, which covered the $25–$40 price range. When Espolòn hit shelves in 2010, super-premiums held the smallest share of the overall Tequila category—with only 12.2% of the overall volume. By 2020 that number had risen to nearly 22%, with the top eight players comprising just over 4.1 million cases. Espolòn had been a member of that group since its reintroduction, and so it naturally became an early leader in the space alongside Proximo Spirits-owned 1800 Tequila.
The market shift provided fertile ground for Espolòn. It ended 2018 at 392,000 cases, and that would grow to just over half a million cases in 2019. By that point Espolòn had become the second-largest Tequila in its price class—a position it’s held ever since. After years of more steady growth, Espolòn would finally break the million case mark in 2022 with 1.1 million cases. Last year its volume rose 23.2% to a total of nearly 1.4 million cases.
Campari supported the growth through effective marketing. “We’ve invested a lot in brand-building on Espolòn, and it’s at a sweet spot from a pricing perspective,” Campari America managing director Melanie Batchelor recently told MARKET WATCH sister publication Shanken News Daily. Over the years, the brand has performed well with millennial drinkers off-premise—which was identified as a target demographic early in Espolòn’s U.S. journey.
Espolòn has come a long way, growing from a relatively minor acquisition to a shining star in the Campari portfolio. It’s currently the second largest product for Campari behind Skyy vodka. But Skyy has been losing volume for the better part of a decade, and is down nearly 1 million cases from 2017. Meanwhile, Espolòn is projected to achieve yet another year of double-digit gains this year. It’s almost certain to overtake Skyy as Campari’s top-volume brand, and will will likely continue to charge ahead as a leading force in Tequila.
Danny Brandon
2024 LEADERS CHOICE AWARDS
WINE BRAND OF THE YEAR
JOSH CELLARS
From modest origins to super-premium success, this brand is a modern classic
Josh Cellars has seen remarkable growth since its debut in 2007, with total volume of more than 6 million 9-liter cases.
T o say California wine label Josh Cellars had humble beginnings is an understatement. Founder Joseph Carr, who created the brand in honor of his late father, mortgaged his house to kickstart the business and sold his first wine, a Cabernet Sauvignon, out of the back of his truck. From that single wine in 2007, the Deutsch Family Wine & Spirits-owned brand now offers 11 different varietals and blends across a variety of price points, all amounting to total volume of over 6 million cases in 2023. Josh was first named an Impact “Hot Brand” in 2013, and was also named MARKET WATCH LEADERS Wine Brand of the Year for the first time in 2015. Nine years later, Josh is now among the largest domestic wine brands in the U.S., and it shows no signs of slowing down.
Josh has nearly doubled its volume since 2019, when it stood at 3.2 million cases. In the past two years, growth has remained rampant, with the core Josh brand ($15-$19 a 750-ml.) adding more than 1 million cases to its total volume, excluding its Reserve and Prosecco offerings (which both boast considerable followings of their own). Josh’s mammoth gains have come in large part from attracting a younger consumer set—few brands, if any, have come close to matching the success Josh has had in pulling in younger drinkers. This is partially due to a more dedicated approach to social media, as the brand has substantially increased its visibility across various social channels, going viral late last year into this year. “The Josh base is expanding household penetration faster than any other wine brand in the Top 50 by dollar sales in Circana channels,” says Deutsch family president Tom Steffanci.
Of course, innovation has also played a key role in moving the brand forward, and there’s been no shortage of new wines in recent years. This past February, Josh introduced Seaswept ($16 a 750-ml.), a new white blend of Sauvignon Blanc and Pinot Grigio. The wine clocks in at just 11.5% abv, and it’s made with grapes from the cooler growing regions of California. “We’ve invested heavily in advertising to show Seaswept as a wine that can be enjoyed in more casual and fun outdoor settings,” says Steffanci. He adds that thus far, reception to the wine has been overwhelmingly positive.
At the other end of the spectrum in both abv and style is Hearth ($18 a 750-ml.), a Cabernet Sauvignon that debuted in 2023 and is bottled at a higher abv (14.5%) than the standard Josh Cabernet. The wine was inspired by trends that show consumers are imbibing more at home and in intimate gatherings, and since its launch, it’s developed a devoted base and encouraged momentum for the entire portfolio.
Elsewhere in the lineup, Steffanci sees “massive potential” for Josh Cellars Reserve, the brand’s higher-priced tier at $19-$36 a 750-ml. Comprised of Bourbon barrel-aged reds and more site-specific wines, including three appellation-specific Cabernet Sauvignons, the Reserve range grew from 412,000 cases in the U.S. in 2022 to 450,000 cases last year. The brand’s Prosecco extension ($18) has also experienced hefty gains, up 18% in 2023 to 246,000 cases.
Looking ahead, Steffanci is optimistic about the brand’s continuing success, saying that there remain “plenty of opportunities to grow the brand by encouraging our current customers to choose Josh Cellars for more of their beverage alcohol occasions.”
Julia Higgins
2024 LEADERS CHOICE AWARD
BEST NEW PRODUCT AWARDS
A celebrity-backed Tequila and low-calorie wine continue to shine for consumers
FLECHA AZUL
C elebrity-backed Tequilas are all the rage right now, and Flecha Azul, backed by actor and producer Mark Wahlberg, is a rising star that’s starting to play a big role. The brand, which is owned by parent company WES Brands, was founded in 2020 by professional Mexican-American golfer Abraham Ancer and Mexican entrepreneur Aron Marquez. “It’s a quality, premium, authentic Mexican Tequila created by Mexicans,” says Wahlberg, who joined the team as an investor in 2022. “We only use 7-year-old agave plants,” Marquez adds. “We harvest it by hand and cut the agave down to remove the middle part, which is what typically makes the product bitter. That allows us to not have to add sugar or coloring. It’s an extensive process.”
Flecha Azul has several varieties in its lineup, including Blanco ($45 a 750-ml.), Reposado ($55), Añejo ($65), Cristalino ($115), and Extra Añejo ($320). All Flecha Azul Tequilas are additive-free and made by the Orendain family in Jalisco, Mexico. The brand has grown exponentially since its launch, with placements in stores like Kroger, Total Wine & More, and Spec’s Wines, Spirits & Finer Foods. The company is focused on on-premise placements and international expansion this year. “Flecha had a great year in Southern California,” WES Brands CEO Shawn Thurman said earlier this year. “We had a great year in Texas, Illinois, Florida, and because of investments and the fact that Mark Wahlberg lives here in Nevada, Las Vegas really overperforms.”
Wahlberg not only brings enormous visibility to the brand through his fame and his social media platforms, but has also been promoting Flecha Azul in retail spaces. “We want to show the retailers what kind of partners we can be and what kind of excitement we can drum up, and that we’re willing to go to any extent for the brand,” Wahlberg told MARKET WATCH in an exclusive interview last year. “We’re not trying to cut corners. We’re in it for the long haul.”
MEIOMI BRIGHT
T here has been a shift toward healthier drinking alternatives in recent years, particularly among younger drinkers. The low- and no-alcohol segment has been exploding, and many leading brands in the wine and spirits space have released lower-calorie, lower-alcohol offshoots to meet demand. This is especially true for wine, which has seen an abundance of better-for-you entries as of late from both big and small brands. While overall wine sales fell 1.3% to $19.5 billion in 2023, the better-for-you segment had a much better year, growing 11.4% to $788.5 million, with many of the offerings selling for above $20 a 750-ml. One of the most exciting new releases has been Meiomi Bright, a 90-calorie and 8% abv version of the brand’s acclaimed California Pinot Noir.
Meiomi Bright ($22 a 750-ml.) has been one of the biggest growth drivers for Meiomi, which is owned by Constellation Brands, since its launch in 2022. The new offering depleted 66,000 cases in 2023, up from just 5,000 cases in 2022, and is part of the higher-end segment for the brand which, as Constellation president and CEO Bill Newlands noted in an interview with MARKET WATCH sister publication Shanken News Daily, is in robust shape. “Our higher-end wine and spirits business outperformed the higher end of the U.S. wine category and gained share in that segment,” Newlands said.
Earlier this year, Constellation bolstered Meiomi Bright with a new ad campaign titled “To The Fullest.” The campaign, which debuted across TV, social, and digital channels, focuses on consumer interest in full-bodied red wines and Meiomi’s new lower-calorie, lower-alcohol extension. “In our new campaign, ‘To The Fullest,’ we will highlight how Meiomi helps people enjoy wine with greater intention in their own unique way,” says Constellation brand marketing vice president Julie Rossman. Meiomi Bright will also receive seasonal promotions throughout this year and into the holiday season to keep the label in the spotlight.
Madeline Ender
2024 LEADERS CHOICE AWARDS
INDUSTRY EXECUTIVE OF THE YEAR
UGO FIORENZO
Managing Director for the Americas, Campari Group
Under Ugo Fiorenzo’s leadership since 2015, Campari’s portfolio in the Americas has been in a nearly constant state of growth.
U go Fiorenzo first came onto the U.S. scene in 2015, when he was appointed managing director of Campari America, having already spent a decade at the Milan-based company. Prior to his move to the U.S., Fiorenzo had served as managing director of J. Wray & Nephew in Jamaica, maker of Campari’s Appleton Estate rum brand. When he embarked on this U.S. role, Campari America’s total volume was 4.6 million cases. Last year the company finished at just under 7 million cases. The Americas comprises 45% of the company’s global business today, making Campari America the company’s largest business unit.
Under Fiorenzo’s leadership, Campari America’s portfolio and its distribution footprint have been in a nearly constant state of growth and evolution, fueled by the parent company’s strategy of acquisitions, top-flight brand management, and in-market execution. That means there has been plenty to manage here in this very high-pressure, high-priority market. Perhaps most importantly, Fiorenzo led the establishment of Campari’s national agreement with Southern Glazer’s Wine & Spirits (SGWS), which began in 2017 and is going strong today,with particular success in the national accounts area. The SGWS deal led to the creation of a whole new set of business disciplines at Campari, including the establishment of a dedicated on-premise sales and trade marketing force. With Fiorenzo at the helm, that program has helped draw bartenders and drinks influencers more closely into Campari’s orbit. Fiorenzo also helped oversee Campari’s 2018 relocation of its U.S. head office from New York to San Francisco, a move coinciding with Campari’s rise from niche company in the market to major U.S. player, a goal the company had long aspired to achieve.
Indeed, Fiorenzo has spearheaded a decade of U.S. growth, and along the way he’s had an impressive arsenal of brands to support his work. Tequila label Espolòn has been among the hottest growth stories in a white-hot category, up 23% last year and now well on its way to cresting 1.6 million cases—double its level back in 2020. Bitter liqueur Aperol has been among the most dynamic brands on the market in recent years, up 40% last year to more than half-a-million cases and capturing audiences among younger and older drinkers, and everyone in between. Despite a hiccup in growth last year, Wild Turkey and Russell’s Reserve continued to prosper, further validating Campari’s bargain purchase of the Wild Turkey franchise from Pernod Ricard for $575 million back in 2009. Grand Marnier, which Campari bought in 2016 for $760 million, has also proven to be a strong strategic acquisition. With the exception of Skyy vodka, which has shown trends similar to those seen by rival vodka players, the state of Campari’s U.S. portfolio is strong, and its growth even has been showing the potential for further acceleration. The company’s first half results, ended in June 2024, which were released at the end of July, showed net sales up 3.8% to $1.6 billion, with EBITDA up 3.5% organically to $453 million.
Fiorenzo was born in Gaeta, Italy, and started his drinks career on the beer side, joining Italy’s Birra Peroni, where he served in a variety of sales and marketing positions. When Peroni was acquired by SABMiller in 2003, he moved over to the brewing giant, where he managed the Eastern European region. After joining Campari in 2005 as trade marketing director for Italy, he went on to serve in a number of different positions within the company over the ensuing years, always within his core discipline of the trade marketing area. Since his big break came in 2015—managing the all-important American market—Fiorenzo has made the most of it, helping to lead Campari in its rise to prominence in the United States spirits and wine market.
David Fleming
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