StateWays - July/August 2015

StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions

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StateWays ■ ■ July/August 2015 36 continue to clog up valuable space. Wyoming runs warehouse inventory reports before each list- ing period, with detailed criteria to determine which SKUs are worth removing. Distilled spirits must average one layer/tier or at least $500 per month. Both domestic and imported wines are held to the same standard of one layer/tier per month, but must sell $1,000 in that time. Special consideration is given to items with low sales in categories with limited options. Products not meeting the agency's criteria are put on watch. WLD reps then have six months to either let these items become delisted, or increase the sales enough to save the listing. The reps, in conjunction with suppliers, also have opportunity during these six months to swap a poor-performing item for a new one that they also represent. "This system of checks and balances helps us stay rel- evant with trending items and categories, which allows us to offer a wide variety of products for our Wyoming retailers," Lebeda explains. Virginia removes items quarterly, after assessing unit sales, dollar sales and profi t. "We notify suppliers of our intent to delist products, and they have the opportunity to appeal and make a case for why an item should remain in distribution," Gettings says. "If an item is one-of-a-kind, we may keep it as a customer ser- vice, even if it does not meet the sales and profi t threshold," she adds. "We also consider whether the item is a Virginia product, or has high licensee sales." New Hampshire will transition items into delisting if they do not meet gross profi t requirements. "All gross profi t numbers tal- lied are the direct result of sales," Gerrish explains. "It is our cus- tomers who really choose what will succeed and what will fail." "In the past, the largest spirit category was blended American whiskey, but this has now dwindled to only four codes," he adds. "Currently, vodka represents 30% of retail sales, and domestic wine represents 49% of the total wine sales." A SPECIAL CASE FOR LUXURY While some agencies run identical listing and delisting processes regardless of price point, others tweak their systems for the luxury category. Pennsylvania sells luxury products pri- marily in its "Premium Collection" stores. The purchasing process is different. "Our luxury buyers meet with suppliers regularly and buy wines in much smaller quantities," Kriedeman says. "These buyers try to source the best products based on hot categories that are trending, seasonal as needed, or top-shelf allocated wines." Virginia also alters its buying process for luxury SKUs. "We are more likely to take a chance on higher-end items if the category shows growth in that price tier," Gettings says. "For example, high-end tequilas and Scotches are big sellers. We have listed more high-end tequilas lately, and they are doing fairly well." Not all scotches sell so consistent- ly, but the department "needs a good assortment of high-end single malts for our discerning customers," Gettings says. "Virginia ABC takes a group of high-end single malt Scotch products in smaller allocations to fi ll this need, without placing it in 100 stores and collecting dust in 80 of them. We place them in a few stores with high-end sales histories." Regardless of the price point, the consumer data remains essential. Regardless of the price point, the consumer data remains essential. "We factor in the marketing dollars the supplier is going to spend in our market promoting the product." – STACY KRIEDEMAN, PENNSYLVANIA LIQUOR CONTROL BOARD WHAT PRODUCTS MAKE THE CUT

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