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ABC Sees Top Vodka Brands Increasingly “Under Attack” In Florida Market

July 21, 2016

Florida’s ABC Fine Wine & Spirits derives about 60% of its sales from spirits, with wine at 27%, beer at 10% and cigars at about 3%. In the second part of this interview, ABC executive vice president Jess Bailes discusses the trends influencing buying activity across the retail chain’s 140-plus stores.

SND: What trends are you seeing in the vodka aisle lately?

Bailes: Some of the biggest brands are under attack, for sure. Smirnoff is having difficulty. A brand like Skyy used to be at about $24.99 a 1.75-liter, and now it can be as low as $18.99, which shows you the pressure on price from items like Svedka and New Amsterdam. There are so many vodka brands that weren’t even around several years ago, and they’re all within a $4–$5 price point. I remember when we first started selling Absolut. Its growth was unbelievable—like Tito’s is now. Now Absolut is very difficult. Stoli is underneath Absolut by a couple of bucks. But Tito’s is really sucking the life out of everything around it. Off a huge base it’s still up 50%, and it will overtake Smirnoff in dollars at our chain this year. Even at the high end, there is pricing pressure. Grey Goose, Cîroc and Belvedere used to sell at about $15 more for a 1.75-liter than they do now. They used to be in the mid-$60s. Now to really sell they need to be at $50-$55, because the market has grown so competitive.

SND: How about other spirits categories?

Bailes: Cognac, which had been struggling, is coming back in a fierce way, especially Hennessy and Rémy Martin. Scotch, Bourbon and Tequila are also hot. In gin, Hendrick’s and Bombay Sapphire have performed well, while Patrón is leading the way in Tequila. In Bourbon, there are a number of high-end brands that are performing well: Knob Creek, Maker’s Mark, Angel’s Envy, Gentleman Jack and Woodford Reserve, to name a few. Irish whiskey is also doing great, and with all the new distilleries going up in Ireland I think you’ll see a surge in that selection over the next few years.

SND: How is the craft spirits segment developing?

Bailes: It’s really just getting started. There’s a tremendous amount of financing going into craft distillers across the country. Within the next five to 10 years craft spirits will look a lot more like craft beer than it does today (craft beer continues to grow by double-digits at ABC). The selection will get better and better. Right now, a lot of the products are too expensive, but I think they’ll start to get more competitive.

SND: What’s the update on the wine side?

Bailes: Meiomi is leading the charge for Pinot Noir, doing exceptionally well. In Cabernet, Josh Cellars is up by double-digits. Chardonnay is still king, with Cabernet right on its heels. Kendall-Jackson has softened its price a little bit in this market, so we’re seeing a resurgence there. In the red blend category, which was dominating the business for a while, the main SKUs like Ménage à Trois have softened slightly. That said, Apothic continues to do very well. In the Florida market, it’s all about domestic wines, mainly Cabernet, Chardonnay and Pinot, as well as New Zealand Sauvignon Blanc.

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