Impact Retailer Panel Tackles Consolidation, Craft, Delivery And Other Hot Topics

With a number of powerful cross-currents—including the craft movement, distributor consolidation, home-delivery and the fickle tastes of younger consumers—increasingly influencing the drinks retail landscape in the U.S, the Impact Seminar convened a panel of the market’s leading players to weigh in on current conditions.

The group included Chris Adams, CEO of New York’s Sherry-Lehmann; Michael Binstein, owner of Chicago-based Binny’s Beverage Depot; Christian Navarro, a partner in Los Angeles-based Wally’s Wine & Spirits; and John Rydman, CEO of Houston-based Spec’s Wines, Spirits and Finer Foods.

Moderated by SND and Impact executive editor David Fleming, the conversation kicked off with comments on the consolidation wave in progress in the middle tier, led by the creation of Southern Glazer’s and Breakthru Beverage. Spec’s Rydman noted that while it’s too early to tell what the ultimate effects of the recent distributor mergers will be, he spoke out against any potential initiatives that would winnow the number of products available and result in an overemphasis on top brands. Sherry-Lehmann’s Adams added that he’s hoping the current phase of consolidation can be accomplished with minimal market disruption, and Navarro opined that we could see “a renaissance of microdistributors,” which would be geared toward handling handcrafted products. Binstein, meanwhile, said he was “not an alarmist” about consolidation at the middle tier. But he described the current state of beer distribution as oppressive for the 4,000 U.S. breweries now trying to get their wares to market. “It’s easier to get an annulment from the Vatican than to divorce an A-B or MillerCoors distributor,” he quipped.

The retail power-players generally agreed that the Millennial segment is the key driver of craft category growth across the market, and Adams and Navarro emphasized the importance of providing “bespoke events” for the younger set, which is particularly receptive to experiential marketing. Navarro said Wally’s has had success engaging Millennials at events like the Coachella music festival, which enable the brand to “get out into the community beyond our brick and mortar space.” Binny’s is striving to create a “melting pot” at its stores, said Binstein, with a focus on collecting customer info and then micro-marketing to address specific needs. The marketing approach used to be the equivalent of “carpet-bombing (through newspaper ads),” he explained. “Now it’s more like a series of surgical strikes.”

With the discussion shifting to the rise of e-commerce and drinks delivery, Rydman said that Spec’s partnership with delivery provider Instacart remains a small percentage of the business for now, but “it’s getting some legs.” One challenge in this era of instant gratification is getting consumers to accept that in many cases such deliveries may take a couple hours to arrive, Rydman cautioned. At Wally’s, Internet sales are growing quickly, Navarro noted, and the company is investing in the space to stay ahead of the curve. Binny’s too is participating in the growth in the delivery segment—recently forging its own agreement with Instacart—but Binstein said he still regards it as a missed opportunity if customers eschew an actual trip to one of his stores. Speaking more broadly on industry-wide dynamics, Binstein called for a renewed commitment to communication among the tiers, heralding “a new era of engagement,” which would enable all players to more effectively key in on specific opportunities in local markets, rather than applying a blanket approach.

Boston Beer’s Jim Koch Discusses The Samuel Adams Nitro Project

Few American brewers offer nitrogenated beers, but Boston Beer Co. is going full-tilt into the nitro segment. In January, the company launched the Samuel Adams Nitro Project—offering a Nitro IPA, Nitro coffee stout and Nitro white ale—and Boston Beer founder and brewer Jim Koch sees nitro beer as a new avenue for growth. Market Watch magazine’s website has the full story.

News Briefs:

•California-based importer Accolade Brands is adding the wines of Italy’s Casal Thaulero to its portfolio. Casal Thaulero had a significant U.S. presence years ago but has now been out of the market for many years. Focused on Montepulciano D’Abruzzo, Trebbiano, Pecorino and Passerina varietals ranging in price from $8-$36, Casal Thaulero joins an Accolade Brands stable that includes offerings from France, Spain, Germany, Chile and California. Accolade is led by former Liquor Barn owner and Market Watch Leader Mark Newman.

•Brown-Forman is launching a commemorative Kentucky Derby bottling of Woodford Reserve Bourbon nationwide this month. Retailing at around $44, the limited edition features work by equine artist Thomas Allen Pauly. Woodford, an Impact “Hot Brand,” is the official Bourbon of the Kentucky Derby, which will be run on May 7 this year.

•Total Wine & More has opened a new location in Silverdale, Washington. The new store marks continuing expansion in the Puget Sound region for Total Wine, which now has eight stores in the area. Retail competitor BevMo is also active in the region, and has a store less than two miles away from Total Wine’s new Silverdale outpost.

Craft Brewing and Distilling News:

•Wisconsin craft brewer Ale Asylum is launching the first beer in its new series of limited-edition 22-ounce bomber bottles on March 21. The series, which will be sold throughout Ale Asylum’s distribution footprint of Wisconsin and Illinois, will begin with Hush Money IPA, a 7.8%-abv brew made with 2-row malts and Hallertau Blanc hops. Ale Asylum has been among the up and coming players in Wisconsin's thriving craft beer scene.

•Kent, Washington’s Airways Brewing Company will relocate to an expanded brewery and taproom that will allow it to increase production fourfold. Construction has started on the new 9,000-square-foot facility, which is expected to open in Kent this spring. Meanwhile, Airways is releasing a new Mosaic Pilsner offering in celebration of its sixth anniversary. The German-style pilsner is made with Mosaic hops and will be available on draft and in 22-ounce bottles in the Puget Sound region. Airways Brewing’s lineup also includes Sky Hag IPA, Loud Lady IPA, Pre Flight Pilsner and Chocolate Stout, as well as limited-edition brews.

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