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A recent report on independent retailers shows beer, wine and spirit stores coming out on top. India Essuah speaks to innovative businesses thriving in this challenging industry.
When wine, beer and liquor purchasing trends are in the public eye, the focus is often on the relationships between increasing sales, store density, and public health outcomes, meaning the definition of success in this sector is not always straightforward. The retailers who traverse these tensions with the most integrity are those who are genuinely passionate about supplying quality products, while providing opportunities for feedback and ongoing education. Many businesses are multi-faceted and include retail alongside restaurant experiences, classes, clubs and subscription services which make the most of their specialist expertise.
Ideally, these dimensions work to expand customers’ knowledge and appreciation of where their wine, beer and liquor originates from. In turn, this allows customers to see the value in what they’re buying - they may learn the story of a family-owned company which values sustainability, and better understand the bumps in the road that created the bottle that sits in front of them. Stories like these lie behind many of the top beverage producers and help to foster an appreciation for every last drop.
A recent analysis of over 13,000 businesses by retail software company Vend showed that overall, New Zealand’s independent businesses are doing well in comparison to their international counterparts, grossing an average of $32,731 in revenue each month. Beer, wine and spirit stores had the highest average monthly revenue at $79,210 as well as the highest transaction count. However, they were also found to have the lowest profit margin, showing that despite the sector’s potential, retailers need a clear and well thought-out plan to thrive.
The old guard
Several years after New Zealand’s original Sale of Liquor Act was passed, Rex Ormandy joined with others he knew from the industry to start Vino Fino in Christchurch. Since 1993, the specialist wine retailer has grown alongside New Zealand’s wine industry to become the city’s biggest single independent retailer. When they began, Ormandy says they were able to stock every producer in New Zealand, but these days, most of his time is spent navigating an increasingly large array of options.
“Now it’s a very crowded marketplace, with not only New Zealand producers, but people bringing wine in, so the choice is immense,” says Ormandy. “Public awareness of wine has certainly increased and we all know about sauvignon blanc and pinot noir but nothing stays the same.”
He says in order to survive the challenge of the business “passion has to override everything”, to keep up with the constant changes.
“You have to know your customers very well and adapt to the changing environment. Technology has been the biggest [change] - the way you communicate to your customers. When we started off you sent out a monthly mail-out newsletter and now it’s all about email and social media.”
He says he navigates the market by knowing what his customers want and maintaining positive relationships across the board.
“We’re lucky because we’ve got very good relationships to our suppliers, and as a fine wine shop we’re quite important to them because we can sell more expensive wines, and they’re the ones that they like producing. There’s no use a winery producing a $100 bottle of wine if they’ve got nowhere to sell it, and supermarkets aren’t the places for those - there’s quite limited places where wines like that can be sold.”
Having built up a vast knowledge of the industry means Vino Fino’s staff are able to discern what’s worth stocking, allowing them to build up trust with customers, who can rest assured they’re getting the best deal for what they’re willing to pay.
“The price of a bottle of wine isn’t necessarily about what the producer thinks it is. We try and look and say ‘What’s the best $20 bottle of wine you can get in a certain category?’ and there are always some that stand out more than others.”
Wellington’s Noble Rot is among the businesses who blend the worlds of hospitality and retail, after expanding their wine bar to include an off-license. This is a model is similar to the likes of Blenheim’s popular Scotch Bar, and Auckland’s French-focused Maison Vauron, who offer both dine-in options, as well as wine to take home.
Noble Rot’s co-owners, Josh Pointon and Maciej Zimny, met while studying towards Wine and Spirit Education Trust Diplomas, run through the New Zealand School of Wine. They opened Noble Rot in 2016 and added the retail side of their business, Noble Wines, around 18 months later.
“We had so many regular clients and friends that enjoyed coming and wanted to know a bit more about how they could get the wine we were serving here. We looked at the process of getting an off-license so if someone dines here and has a lovely bottle we can send them home with a bottle of that wine,” says Pointon.
He says that the retail side of the business “naturally evolved” through the discussions he regularly holds with his team to enhance customers’ experiences, leverage their staff’s knowledge and bring in fresh ideas.
“There’s a constant desire to do more. Not even just with wine bars but hospitality in general, you’ve got to constantly be proactive. We all know how competitive the industry is, and Wellington’s full of fantastic places so you’ve always got to be searching for something different to make yourself stand out.”
Noble Rot hosts regular events where they look to challenge their consumers and give them a chance to get out of their comfort zones. They also facilitate courses for customers who are looking to expand their knowledge, as well as staff from other hospitality businesses, fostering a sense of collaboration.
“I think it’s fantastic that they then can go back to their establishment and take their knowledge that they’ve gained and take a qualification to better themselves, but it also helps to better the industry as a whole,” says Pointon.
“Customers are growing alongside us, with us being able to supply them with wine that they perhaps weren’t drinking two years ago that they’re now happy to explore because they have come here and trusted us.”
In the bar, people are more frequently interested in drinking wine by the glass, allowing them to try multiple varieties over the course of the meal. This is also helped by the release of the Coravin device, which allows the remainder of the bottle to remain preserved once a glass is poured. As well as a growing interest in natural and orange wines, Pointon says people are increasingly interested in the provenance of what they’re drinking.
“I I think people are more aware of how the industry works and they want to know more about how the vineyard is farmed, or the people that are farming it and working it, and thinking a bit more about sustainability and if they’re trying to give back to the land that they’re farming.”
“Myself and Maciej have a group each and we cater their wine every month. We source and pick their wines according to their tastes and their palate and that varies from month to month. It works in tandem as essentially a bottle shop out of Noble Rot and then a private wine supply coming directly to your door as well.”
Another business that has utilised their specialised knowledge in this way is the subscription service Wine Friend, which is aimed towards those who are tired of playing it safe with the same wines, but don’t want to risk buying something they’re not happy with.
Co-founder and ‘chief tasting officer’ Yvonne Lorkin says the idea grew because “there was a frustration that people wanted to try new things but actually they were too scared to because of that financial risk”.
Working as a wine writer and judge, Lorkin wanted to find a way to be able to recommend the immense selection of wines that came across her desk to people who have come to trust her expertise.
“We could see how personalisation services were working really well in terms of subscription offers around the world for things like fashion and music and that kind of thing and we thought, wine is such a personal thing and it’s so subjective, and it’s also a product where we rely on the opinions of people we trust.”
When someone signs up with Wine Friend, they create a base profile about their preferences, which is used to pick a selection of wines that are sent to their door. The insights it uses are the same ones that would inform a traditional retailer’s approach, but have been applied to create an innovative model.
“Whenever I’m reviewing a product I’m thinking about whether it’s a good product and whether it’s well-made, but also what kind of person would really enjoy this. Would it be a person that really loves spicy food, or would this appeal to someone who’s really adventurous? We thought if we could figure out a way to code all of the different wines that I’m enjoying to different tastes and preferences, then we can start matching wine to people, taking all the hassle and guesswork away.”
Wine Friend engages with each customer online, without removing the personalised interaction one might have over the counter. Customers can leave feedback on their wines using emojis or as much detail as they like, which is used to shape their next order. Similar to Pointon’s commitment to education, Lorkin sees the process as a “synchronous journey” taken alongside customers as they acquire new knowledge about wine, and their customer profile is refined. Even in the age of automation and algorithms, this focus on feedback and education proves the importance of retailers who have built up years of knowledge they can share with customers in helpful and genuine ways.
In the fast-moving world of craft beer, Beer Jerk runs a more social version of this service, which sees 12 unique, hard-to-find beers sent out to subscribers every 12 weeks. Each Thursday, participants are encouraged to drink the same beer at the same time, and people can share their reviews on social media, or sit back with their brew and see what others have to say. At a lower (and therefore less risky) price point, craft beer is a perfect product for experimenting with new flavours. And with so many new releases happening, subscriptions are a manageable way to keep up without feeling overwhelmed. Like others in the industry, the business is a diverse one, also encompassing both a bar (the Beer Jerk Bunker) and an online shop, exemplifying a flexible approach to engaging with customers in a range of ways.
As the popularity of growlers and refillable bottle options continue, taprooms run by the likes of Avondale’s Hopscotch, The Fine Wine Delivery Co, Urbanaut Brewery and Garage Project also continue to be an important chance for beer retailers to educate and gain return customers, who enjoy the chance to chat and find something new, as much as the drink itself. It’s also the cheapest way to purchase fresh, quality beer, and is a good way to reduce a household’s amount of recycling. It also allows customers to try before they buy, which is an attractive point of difference for many.
A few years back, Richard Young, the founder of Grey Lynn retailer Bottle Stop, returned to Auckland for a holiday after living in London. He was keen to learn more about the influx of craft beer on the market, but had trouble finding a store that could help him. After a disappointing retail experience which saw him walk out with an uninspiring box of lager, he decided to fill this gap himself. After a stint working at Garage Project, he opened Bottle Stop last November, which has both an on- and off-license and offers tasting paddles, food platters, classes and corporate tastings.
“The idea was I wanted a speciality beer focused place where people could go for some advice and education,” says Young. “In London and Europe there’s quite a bit of that hybrid model around and that’s where I got my inspiration from because I used to go to those places all the time. I was so surprised that there wasn’t one back here.”
After nine months, he says he has a solid base of regulars, as well as new customers walking through the door each week.
“I wanted to make it inclusive so people who didn’t know much about beer could walk into the shop and ask for a bit of help.”
Sharing the story
For crafters, distillers and winemakers, a benefit of supplying to a boutique store or a service such as Wine Friend is the chance for your story to be heard, and passed on to consumers.
“One of the challenges [with Wine Friend] was trying to convince wineries and wine businesses that we were the exact opposite of a discounting culture,” explains Lorkin.
“People work so hard to make a great product and it’s an expensive thing to make, and yet, so many of these wine producers were being caught in this cannibalistic spiral of discounting. We want people to understand why a good wine costs good money. One way that we do that is by telling the story of the winery as well on these neck tags that I write, that go on every bottle of wine that goes in our boxes with little nuggets of knowledge about the winemaker. “
Lorkin worries that it’s possible for people to throw a bottle of wine into their trolley “with the same degree of emotion that would a box of muesli bars or a packet of toilet paper”. She hopes to ensure that people “understand that it’s a product that a lot of blood, sweat and tears have gone into and that it’s worth every cent”.
“That bottle has a family, hard-working people behind it, and they’re at the mercy of nature. With wine you’ve got one shot every year - we wanted to bring that back to people.”
Like the other retailers I spoke to, Lorkin (who has also worked as a supermarket wine consultant and within boutique wine stores) believes that the keys to a successful stores come down to service and knowledge.
“Someone who listens to what you really want and asks the right questions: ‘What are you having for dinner, what are you thinking about serving with that?’ Or if it’s for a gift: ‘What kind of person are they, what do they like to eat and drink?’.”
“It’s knowledge of personal details and remembering things about customers. Even if that wine store is the shabbiest, no frills, hole-in-the-wall spot, if they’ve got good people in there and access to great quality wines then they’re going to do well.”
This story originally appeared in NZ Retail issue 763 August / September 2019.
The insights powering Liquorland
Specialist liquor retailer Liquorland has shared top tips from three franchisees.
Jocelyn Granger at Liquorland Howick.
What makes your business stand out against others in your sector?
Liquorland is a trusted brand within the market and you can expect an experience that is more than just your average bottle shop. The support of Foodstuffs as our owners is a huge advantage along with Fly Buys and Airpoints giving us a point of difference.
What trends have you noticed in recent years? How have you responded to these?
Premiumisation has been huge, consumers want better quality and things that are better for you. Whether that is from craft beer, premium spirits and gin especially or low calorie and low carb options and even premium mixers and drink solutions.
Consumers are also more educated and expect a lot more knowledge from us. Ongoing training and tastings with staff is key and staying ahead of the trends and listening to what our customers want, has been an important part of keeping up with the changes in the market.
Sharon Wiggins of Liquorland Taupo.
If you were to go into another area of business, what learnings would you bring from hospitality?
Great customer service is one of the keys to success in hospitality and is equally important to all businesses. Also, backed up by great systems and procedures.
Moneesh Mittal at Liquorland Boutique Kohimarama.
As a customer, what do you value in a beer, wine and spirit store?
Knowledge and service are the two main things I look for. If the attendant doesn’t know, I would want to see how far he/she goes to get me the information that I require to make a better decision which ultimately leads me to believe I would then shop there only.
There have been many businesses in our retail community that have seen the quick growth that Afterpay can boast. The buy now pay later platform ...
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