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Colorado Retailer Wilbur’s Looks To Adapt In Changing Market

August 17, 2016

Earlier this summer, Colorado Governor John Hickenlooper signed legislation allowing wine, spirits and full-strength beer sales to expand into grocery stores on a gradual basis, marking a compromise between independent liquor stores and supermarkets, which had originally pushed for more precipitous changes. Fort Collins-based retailer Wilbur’s Total Beverage, whose general manager Matt Dinsmore was involved in hammering out the compromise, is now focused on adapting to the new landscape while looking to maintain a competitive edge.

Wilbur’s, which carries about 10,000 SKUs at its single location, was a proponent of maintaining the state’s existing liquor regulations, in which only 3.2%-abv beer was sold in grocery stores and retail liquor licenses were limited to one per owner. Dinsmore served as president of Coloradoans for Safety, comprised of the top 20 retailers in the state, and worked with groups like the Colorado Licensed Beverage Association (CLBA). The coalition also included 1,600 independent Colorado retailers, 300 breweries, 75 distilleries and the Colorado Wine Industry Development Board. Its members ultimately agreed to compromise with grocers and mega-retailers like Walmart and Target on the new rules.

“With the compromise, we were able to institute some radius restrictions, some buyout provisions, and a cap on the number of licenses that grocery stores will get—which is five next year, five more in 2022 and so on until 2037, when all bets are off,” says Dinsmore. “It has also allowed for a limited expansion of (liquor stores), as we’re permitted to increase to up to four locations over the next 10 years.”

Independent retailers in Colorado are now exploring options to remain competitive as the market opens up to chains. In addition to granting more licenses, the new law allows up to 20% of a liquor store’s annual sales to come from food items. Wilbur’s, however, says it’s still evaluating its strategy, citing its location between major grocery stores. “We’re going to strive to continue with customer service, great selection and competitive pricing, but we’re also going to have to find our niche,” says Dinsmore.

Wine comprises half of Wilbur’s sales—with red blends, sparklers and French imports gaining ground—and spirits and beer each make up about 25%. Strong growth in high-end and craft-distilled Bourbon has driven the category to become Wilbur’s second-largest in spirits, after vodka. Meanwhile, with Colorado one of the epicenters of the craft brewing movement, craft beer now outsells other domestic brews by six-to-one at Wilbur’s.

While Wilbur’s has no immediate plans to open new stores, the company is leaving its options open, given the Colorado market’s changing conditions. “Only time will tell,” Dinsmore says, “but I think in this new environment, if you don’t expand, with the market opening up you’re going to struggle.” —Kimberly Tharel

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