Interview, Part 1: Total Wine Aims For $3B In Sales Within Five YearsApril 22, 2014
Within a U.S. drinks market where multi-state retail and on-premise chains are steadily amplifying their influence, Maryland-based Total Wine & More, which reached 100 stores and $1.5 billion in sales last year, has been a trailblazer. Now in 16 states, Total Wine continues to expand rapidly and has set ambitious targets in terms of both revenues and store locations for the years ahead. In this first part of a two-part interview with SND senior editor Daniel Marsteller, company president and co-owner David Trone details Total Wine’s plans to conquer new territory across a range of markets and discusses which categories are driving growth.
SND: What are your goals in regards to revenues and new stores over the next few years?
Trone: We have 104 stores open currently, and we’ll do about 13 new stores this year. We plan to continue expanding with 12 to 15 new stores a year. In 2013, we had $1.5 billion in revenue, and we plan to be at $2 billion in 2015, and $3 billion in 2019.
SND: Which areas of the country are most ripe for expansion?
Trone: We think Texas has unlimited opportunity. We’ve already gotten started in the Dallas-Fort Worth and San Antonio markets. The economy is great in Texas, and the consumer is willing to spend money on beverage alcohol. Washington will also eventually be one of our most successful markets. We currently have six stores open there, and four or five more will open through 2015. We’re optimistic that Oregon will follow the example (of privatization) set by Washington. That will open up a great opportunity in Portland, which is a great food and wine town, and the craft beer mecca of the U.S.
SND: Some drinks market players have noted tough conditions—linked to higher pricing—in Washington following privatization. What’s your view on that situation?
Trone: Everybody talks about the taxes, that they’re too high, and we would agree with that. But they’re the same for everybody. The state made a decision, the people voted and now we just have to live with the reality of taxes and look for ways to compete better.
SND: While Total Wine recently entered Minnesota, you’ve seen some resistance there, with your Bloomington store delayed. How is the outlook for that market?
Trone: After some initial setbacks, our Roseville store is opened and doing fantastically well. The market was clearly overpriced and underselected. The Bloomington store will eventually work its way through. In general, Minneapolis-St. Paul is a very educated, sophisticated market with plenty of disposable income, a lot of corporate headquarters—such as Target and Best Buy—a great wine culture and a paucity of competition.
SND: Which drinks categories are performing best in your stores currently?
Trone: Brown goods like Bourbon and Canadian whisky continue to be through the roof. Fireball (cinnamon whisky liqueur) is probably the hottest product in America right now. It’s rocking with the Millennials and now it’s moving upstream to older consumers. In wine, red blends are on fire, and Pinot Noir is still moving in a very positive direction. Rosé is also doing extremely well, while Merlot continues to be soft.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.