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Interview: Big Red Liquors Of Indiana

July 2, 2013

Bloomington, Indiana based retailer Big Red Liquors doubled in size earlier this year when it purchased the 24-unit United Package Liquors in the metro-Indianapolis area for an undisclosed sum, as reported in Shanken News Daily March 13. Since that time, Big Red has made significant investments in remodeling and rebranding the former United Package Liquors units. Today it operates a combined 49 units, with four new stores planned for opening over the next year. According to reliable industry estimates, Big Red’s revenues will be well in excess of $50 million by the end of 2013. Shanken News Daily recently spoke with Big Red Liquors Chairman Mark McAlister and President Don Rix about the latest developments in their growing business.

SND: How were your sales for the first six months of 2013, and which areas are performing best for you?

Rix: Sales are outstanding. We’re coming off a record year in 2012, and we showed double-digit growth in some categories. Spirits continue to perform very, very well. We’re seeing substantial growth in wine and average growth in beer.

SND: How do you account for the spirits and wine growth?

Rix: Product innovation, new items, sampling and customer-interactive programs. We’re working through Facebook and elsewhere through the Internet. We have some new text programs going on that are pretty unique to our industry. So we’re utilizing social media. For example, we’ll have a Bourbon event at one of our locations, and we’ll reach out on social media to announce that. Our marketing emphasis has shifted away from traditional channels. We now concentrate more on category-specific self-marketing. If we know that a customer buys a certain category, we’ll reach out to them on that category when appropriate.

SND: Which spirits categories are doing particularly well?

Rix: Brown spirits are doing very well. What’s interesting is that line extensions—flavors like honey and cherry—are bringing incremental sales to the category. They’re still buying the traditional brand, but the incremental growth is coming in through line extensions and the flavors. And vodka is still a very progressive, very dynamic category. We’re also seeing good growth from boutique-type rums like Angostura 1919 or Diplomatico—rums that have a unique story to tell. That’s mainly dark rums, but there are some exceptions. Caliche has been a nice introduction— a white rum with an age statement. That’s marketed by the DonQ people and was Rande Gerber’s brainchild.

SND: Which wine brands or regions have performed especially well for you?

McAlisterWe do very well with California, where we’re seeing growth at the $15-$25 price point. We’ve also been very excited about opportunities from Spain and South American wines, obviously Malbecs from Argentina. Our most popular price point for wine is probably between $8 and $12. Sweet wines are also doing well. Our largest label there is a wine made not very far from where we started Big Red Liquors in Bloomington, called Oliver’s Soft Red. It retails at around $7 a 750-ml. We’re also selling a lot of Moscato, and some entry-level sparklers like Verdi are starting to do very well.

SND: How are sales of craft beer, and what percentage of your beer business does it now comprise?

RixWe’re showing double-digit growth in craft, but it’s still a relatively small percentage of (our beer) business, about 10%. When you look at dollars versus units, there’s still an awful lot of dollars in those national brand packages. When we say we’re not doing as well in beer, it’s because we’re doing so well in spirits and wine. We’re still showing above-market growth in beer.

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