Interview: Ron Junge, Brown Derby Stores

Brown Derby Stores is among the stars of U.S. liquor retailing, operating 18 locations in its market of Springfield, Missouri, and posting sales of $30 million last year, including a robust online business. Brown Derby was once among the foremost retailers of high-end Bordeaux and cult Cabernet Sauvignon from California, but times have changed, and owner Ron Junge has been successfully accommodating the shift in tastes and buying patterns. Junge recently spoke with SND about those trends.

SND: You began selling Bordeaux in a serious way decades ago. What’s different now?

Junge: We started offering Bordeaux futures in the ’70s, but our last futures vintage was 2010. Bordeaux got too pricey, just at a time when demand turned soft. Since 2010, practically no one has been asking us for futures.

SND: Was it just a matter of price?

Junge: It’s also about shifting tastes. Millennials aren’t collecting wine like Baby Boomers once did. They’re much more interested in craft beers and small-batch Bourbons. And it’s not so much that our total sales of wines by the bottle are down, it’s our collectible business that’s disappearing. People who were routinely spending $100 for a bottle of wine before the recession cut back to $20 a bottle, and they found that those $20 wines were pretty good. Now they aren’t trading back up. Bordeaux was once 15% or more of our wine sales. Now it’s closer to 2%.

SND: What’s replaced it?

Junge: Wines from the Rhône, Provence and the Loire are all selling well for us. Burgundy also still does very well. It’s Bordeaux that’s soft. They’ve simply priced themselves out of the market.

SND: Even if you aren’t selling the classified growths anymore, what do you sell from Bordeaux?

Junge: We’re emphasizing more affordable labels. A good example is the 2012 Chateau Haut-Plaisance from Saint-Emilion. It’s a bargain at $18 a bottle. There are good values still to be found in Bordeaux. We just have to get our customers to believe it.

SND: And if Bordeaux’s classified growths aren’t selling, how about Cabernets from California priced at $100 and more?

Junge: Hard-to-get cult labels were once important to our customers, but that business has gone soft too. And retailers like us have found our allocations getting smaller every year. We were once one of the biggest sellers of Dominus Estate wines in the U.S., for example, but today we get very little of it. Years ago I could sit down and open a bottle with a winery owner in Napa and have a good time. But the business today is less personal. It breaks your heart to see the changes, but you get over it and move on.

SND: Your web site is renowned as one of the best in the nation. How are your online sales holding up?

Junge: Our online sales are steady, still under $3 million a year. We sell only wine online, with more than 5,000 labels promoted on our web site. We don’t showcase everyday names like Barefoot and Yellow Tail at all—they’re not important to an online audience. And so far we’ve not put any spirits or beers on the website. We expect that to change sometime in the next eight to 12 months. We’ve been missing opportunities in those categories.

SND: How big is your e-mail list?

Junge: We actually have two e-mail lists. We have a national list with about 10,000 addresses that mostly promotes products. Then we have a local e-mail list aimed at 5,000 addresses that promotes specific events at the store. Our e-mails go out about twice a week. We sent them more frequently three years ago, but we’ve become more strategic in our promotions now.

Tagged : Brown Derby Stores, retail

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