Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
Issue link: http://read.dmtmag.com/i/551867
Retail SERVICE { } $ { } $ 8 Beverage Dynamics • May/June 2015 www.beveragedynamics.com OUR BEST CHANCE TO CHANGE THE FIGHT IN BEVERAGE ALCOHOL BY BRIAN D. ROSEN I am in England this week working with a client, and one thing is painfully clear to me as America's AdultBev consultant: The world is a small place and our place in it is tiny. I am not trying to impart some global wisdom that I have learned, or some passionate message from my travels, but rather the fact that AdultBev retailing is the same here as it is in Des Moines, IA. I look around and I see trends that I see at home. I look around and I see brands that struggle at home also struggling here at retail. I look around and I see the same retail mistakes that off-premise retailers make in Chicago being made at Knights- bridge Fine Wines or Harrods in London. I am here with a large, multi-national client that as asked me to look at his retail holdings throughout Europe. He is looking for a retail edge as big, international box is coming from all sides and his gross margin is being hurt by European category killers. Sound familiar? It should, because it is happening all over the world. Big Box multi-national retail- ers are coming into your market and making price the only way to compete. That is all fi ne in fantasy world, but as an independent retailer you have invested in other ways to woo your customer. You probably invested in a nice store experience, or knowledgeable help or a really cool CRM program. Here is the reality of the US retail landscape. I went to London to affi rm it. Walking through Harrods yesterday, I noticed control label wine. I saw cabernet, chardonnay, sauvignon blanc and pinot noir. What is the big deal, you ask? The big deal is that if you do not know Harrods, please understand that they generate over 1B Sterling Pound in gross sales, (roughly 2B dollars converted in US dollars). They have fully embraced the private label wine movement. They have invested in it, sell it, market it and spend effort in promoting it. In our own country we are still slow to embrace the PL movement. As retailers we fall in love with labels, reviews and national ad campaigns. We need to remember that all of those things are not meant for the little retailer, but for large chains and grocery. The little guy is left to fend for himself and fi nd new and innovative ways to compete on pricing. Enter private label wines! When considering a PL wine program for your off-premise store, it is important to remember three things: BRIAN ROSEN is operating partner of Evolution Wine & Spirits, in Chicago, and is available through Evolution Speaking and Consulting. He can be reached at brian@ evolutionwines.com. ■ The average wine consumer only knows ten labels of wine. That said, to them, 90 percent of the other wine can be or is PL wines. ■ Any investment in a PL wine pro- gram comes with risk. The wines need to be hand sold. A big investment while might be good on short term GM% gain might be bad for cash fl ow, so have an exit and mark down plan. ■ Tastings and more tastings! Selling wine that no one has heard of needs sam- pling. Nearly 87 percent of tasted wine at market level will have sell-through. The wine-selling and retail world is changing, and the only way for the in- dependents, some chains, regional play- ers and grocers to compete is to sell PL wines. Have a plan, have a strategy and have an exit. If you follow these simple guidelines, you should be on your way to a higher blended gross margin. BD