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Interview: Francesca Schuler, BevMo’s Chief Marketing Officer

May 2, 2013

Editor’s Note: BevMo, already one of the biggest beverage alcohol retailers in the United States, is rapidly becoming even bigger. The Concord, California-based chain now operates around 130 stores in California, Arizona and Washington, having opened 15 last year alone. Five of those units were in Washington, where BevMo is rapidly expanding following the privatization of the state’s spirits business in 2012. Shanken News Daily recently caught up with BevMo chief marketing officer Francesca Schuler to discuss BevMo’s progress.

SND: Which categories and products are performing best on the wine side?

Schuler: Brand exclusives are doing well for us, so we carry a lot of products under a major brand name. Coppola, for example, has an item exclusive to BevMo that people get excited about. We also might have a high-profile brand offer a particular varietal only at BevMo. In terms of categories, South America has been strong for us. In terms of pricing, we tend to play very strongly in the $15-$20 segment.

SND: How important is private label to your business?

Schuler: Our plan is very much to sell national brands, combined with a mix of items exclusive to BevMo. That mix includes branded exclusives as well as our Vineyard Partner program, where we develop brands internally that are sold only at BevMo. All these areas matter to us—we’re not trying to be an either/or.

SND: How does BevMo differentiate itself from the competition?

Schuler: We look at everyone as a competitor—especially in California, where basically everyone sells beer, wine and spirits—Dollar General, Bed Bath & Beyond and so on. When you compare BevMo to a rival beverage-only retailer like Total Wine, I would describe them as a super-store, while we’re a specialty store. They’re at 30,000 square feet, and we’re at 10,000 square feet. There will be people who want the 30,000-square-foot experience, to have everything in there with the largest selection and lowest price. We’re much more kind of a neighborhood specialty store. I think there’s room for all.

SND: How crucial are new products to BevMo’s success?

Schuler: The good news is that people like innovation and discovery. It’s more like fashion than it is milk and eggs and other categories. With new products, it’s largely just making sure you don’t over-inventory. We’re also putting more emphasis on integration between merchandising and marketing on the retail side, and sales and marketing on the supplier side. Before, the brand people were spending all this money on their new item, and oftentimes we just put them on the shelf, sit back and say, ‘I hope that works.’ We’ve made some significant changes with our product launch approach. We just launched Casamigos Tequila. We are the primary retailer in California to carry it, and we had a full launch strategy, including social media and tastings. It was one of the most successful premium spirits launches we’ve ever had.

SND: How is the pricing environment in your markets?

Schuler: We’re not seeing trading down in terms of actual net pricing. But promotional pricing is still part of the game in a very aggressive way in California and Arizona. In fact, I would say it’s increasing, partly because of macroeconomics but more because of the competitive environment. So you really need to know your customer. You need to focus your messaging on what they want and give them something special. If we all just discount, this will just turn into a commodity business.

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