Beer growlers, t-shirts, fancy tonic waters, cocktail napkins, even oak barrels used to age bourbon. Those are just a few of the non-alcoholic or low-alcohol products liquor stores have been adding to their inventory since state law allowed such sales this past July.
Allowing liquor stores to sell beer and non-alcoholic products was a concession granted in the wine-in-grocery-stores bill, which was passed by the Tennessee General Assembly earlier this year. On November 4th, Shelby County voters will get to decide whether bottled wine can be sold outside of liquor stores beginning in 2016.
But liquor stores, long-concerned about how wine sales in grocery stores would affect their own businesses, have been gearing up to compete by diversifying their products. The problem for many store owners has been finding the space to add products.
An addition to Joe’s Liquor, one of few liquor stores in Memphis that isn’t boxed into a shopping center, has been under construction for the past few weeks. Once complete, Joe’s will have room for a 30-tap growler station with 19 beer taps (many for high-gravity beers), 10 wine taps, and a kid-friendly tap for Abita Root Beer.
“The wine growler taps will offer a great opportunity to try fine wines that, if they were in a pre-packaged bottle, would be in a price point that’s not your Tuesday or Wednesday price point,” said Joe’s General Manger Michael Hughes. “The pricing will be much more competitive because of the lack of packaging.”
In keeping with their brand, Joe’s is sticking with local beers when it comes to expanding their low-gravity line. Customers won’t find Budweiser products there. Nor will they find the mainstream domestics at Great Wines in East Memphis.
“We’re a little more upscale, so we’re appealing more to the craft end of beers. No Budweiser or Coors or Miller,” said Gary Green, manager of Great Wines.
Stores that have more space, such as Buster’s, are carrying both low- and high-end beers. But Buster’s owner Josh Hammond said, while Buster’s is bigger than many liquor stores, he still hasn’t had room to add as much more beer and other products as he’d like to.
“We’ve doubled the size of our beer section by pulling the boxed wine out of the cooler and stocking that cooler with beer. I would like to add more, but I just don’t have the space,” Hammond said.
Many liquor store owners say they’re still experimenting with what sells.
“We’re just testing the market to see what people are interested in. Some things are doing well. Some are not. It’s the experimental phase,” said Philip Foreman, general manager of Kirby Wines & Liquors, which has begun selling kegs and some low-gravity beer, as well as wine tools and t-shirts.
Before the new law went into effect, there were only a handful of local places to purchase kegs. Now liquor stores can sell them, so Southwind Wine & Spirits has gotten into the keg business. General Manager Ryan Gill said that business is booming.
“We’ve done about 10 kegs a week, something like that,” Gill said. “Nobody ever knew how to get a keg, and we used to have people ask us all the time.”
Gill said they’re also peddling empty oak barrels used to age bourbon, which customers purchase to make end tables, bar stools, coolers, or for use in other crafty projects.
“It doesn’t make up for any of the business we’ll end up losing,” Gill said. “The concession with the wine-in-grocery-stores bill was that we can sell beer. But that’s only like 1 percent of our sales, and wine makes up 65 percent. And we’re right next door to Costco, and they have great prices on beers. So it’s not like we could do cases of Bud and Bud Light.”
Joe Bell, manager of marketing and public affairs for Kroger’s Delta Division, is hoping local voters approve wine sales in grocery stores this November. Bell said he understands the concerns of liquor store-owners, but he believes liquor stores’ success in the face of grocery store wine sales depends on the approach.
“It depends on the mindset and the way a package store approaches this,” Bell said. “And it’s the same as if a new grocery store opened against Kroger. We can take a more aggressive approach and try and do what we need to do to hold onto our business, or we can sit back and lose business. It depends on how the package store owners approach off-setting this business.”
