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Interview: Gary’s Wine & Marketplace Sees Change On The Horizon

June 3, 2016

The four-store, 120-employee New Jersey retail chain Gary’s Wine & Marketplace continues to expand on an impressive curve that has seen it grow from revenues of about $30 million in 2007 to a projected $52 million this year. Most recently, the franchise opened a new store in Hillsborough in central Jersey last summer. In this exclusive interview, owner Gary Fisch, who was named Market Watch’s Retailer of the Year in 2014, weighs in on trends and competitive conditions in the Garden State.

SND: How is the competitive landscape evolving in New Jersey’s drinks retail segment? If there were to be an expansion of supermarket liquor licenses, how would Gary’s react to the challenge?

Fisch: Every year a new bill comes up (to expand grocery sales), but I won’t make myself crazy about it until it’s actually going to happen. This has been going on for at least 10 years. But now the music is getting louder. I’m convinced change is inevitable at some level, and any license shifting will be to the benefit of national chains and not traditional independent retailers. But if the allowed number of licenses is raised from two to 10, or to an unlimited number, we’ll be active players in the market and continue to grow. Having said that, the barrier to entry will rise significantly because Costco, Walmart and the national grocery chains can afford to pay far more for a liquor license than a traditional liquor store.

SND: Wine comprises 72% of your sales, while spirits make up 15% and beer is 11%. What categories are up-and-coming in your stores?

Fisch: In spirits, Bourbon is still growing, but we’re seeing some supply problems limiting it. There’s also been an increase in Tequila and mixer sales. In wine, rosé is definitely the big winner. It was up nearly 50% last year, with the average price per bottle at over $15. Year-round rosé drinking has skyrocketed. In the first quarter our sales were up 183% compared with 2015. We practically doubled our rosé selection this year, to about 110 products. Red blends are still very strong, with a number of new brands entering the market. We’ve also seen huge growth in smaller categories like Northern Italian reds and German whites, as well as areas like Southern France and Australia. While these aren’t big categories in terms of overall sales, this tells us that tastes are diversifying. Consumers are more likely to buy from numerous categories.

SND: How is diversification affecting sales overall?

Fisch: Average item prices are down, but not necessarily the overall ticket. People are still buying. They’re just looking for more value. Instead of the big, cult Napa Cab for $125, they’re buying a $15 craft six-pack, a $50 craft Bourbon and three bottles of $20 wine from three different regions. The actual drinkers themselves are diversifying too. Millennials as a bloc now control the largest part of our country’s spending power, but that spending power is split among more consumers than, for example, in the Baby Boomer generation.

SND: Any predictions on trends looking ahead?

Fisch: I think we’ll continue to see upward growth in craft beer—which is up 24%—and Tequila, and I think vodka will try to piggyback on that with more craft distilleries. Local products will become a bigger growth category as more people become aware of local wineries, distilleries and breweries.

 

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