Interview: Chicago Chain Garfield’s Works To Stand Out In Competitive Market

With plans to add its 11th store in upscale Naperville, Illinois, later this year, Garfield’s Beverage Warehouse is earning a reputation as a Chicagoland destination for Bourbon and other spirits. Annual revenue at the family-owned chain is over $30 million, driven by spirits at 40% of the mix, with wine and beer each contributing 30%. Shanken News Daily contributing editor Terri Allan spoke recently with David Garfield, CEO, and Adam Silverstein, COO, about the dynamics of beverage alcohol retailing in the Chicago area today.

SND: The Chicago market for beverage alcohol is very competitive. How would you characterize consumer activity of late, and what impact has inflation had on your business?

Silverstein: Unlike many other markets around the country, most retailers in the Chicago area can sell beer, wine, and spirits. We’re definitely seeing pressures on the pricing front, with cases of beer, for instance, jumping from $15 to $20. Overall, consumers are a little weary over the state of the world and they’re looking into their pockets a little more deeply than they used to. However, we’re still seeing a good deal of premiumization as well, particularly in some spirits and wine sectors.

Garfield: Following Covid and the high inflation of recent years, we’re trying to figure out what the new normal is now. With high interest rates, people are more cautious about how they’re spending.

SND: You opened a new store in Deerfield late last year. What’s the early read?

Silverstein: Response has been very positive, including for the on-site bar. We also plan to open store #11 in Naperville, a 3,900-square-foot space, in the fall. We don’t have a set number of stores that we’re looking to reach, but we’re always looking for the right location to expand our business.

SND: What are the key trends for spirits at Garfield’s?

Silverstein: Bourbon has been a huge driver in bringing people into the spirits category. It’s also helped raise curiosity among consumers when it comes to new local distilleries and spirits. At our locations with bars, we’re finding that people are open to exploring different products, so I believe there’s a lot of room for growth.

Garfield: Consumers also remain interested in our private barrels, but we’re often limited by supply. With some of the popular programs it can often be difficult to land a barrel, while with smaller distilleries, we can get the barrels, but the product is more of a hand sell.

Silverstein: Tequila has also been interesting for us. Ever since the pandemic, high-end Tequila has flown off the shelf. The consumer that entered the category a few years ago is now asking more questions and doing more research. We’re starting to have success with emerging brands and we’re hoping supply will keep up.

SND: How is the wine category shaping up?

Silverstein: We’re seeing moves toward premiumization with people who used to be in the $10-$12 a bottle range becoming more comfortable in the $14-$20 range. There’s also been a huge boom in the low- and no-alcohol categories, driven by health- and calorie-conscious consumers.

SND: What are you seeing in beer?

Silverstein: Beer is tough right now. Volume is down, which is hurting the big breweries. Within crafts, we’re seeing a shift toward hyper-local beers and breweries and away from the larger craft breweries.

SND: Given the fierce competitive climate, what does Garfield’s do to stand out?

Silverstein: We rely on a traditional marketing blend, including print, digital, and email. We price competitively. Our selection and knowledge also differentiate us from the groceries, big box, and convenience stores that we compete with, as well as other liquor store chains.

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