Colorado’s Hazel’s Beverage World Tops $30 Million In SalesOctober 13, 2017
In just five years of operation, Boulder, Colorado-based retailer Hazel’s Beverage World has grown into the No.-1 drinks retailer by sales volume in its home market and risen to become the state’s No.-3 store by the same metric. What started as a gamble has reaped big-time rewards for cofounder Bruce Dierking and his business partners.
Dierking says Hazel’s has benefited from double-digit annual sales growth almost every year since it opened. The 35,000-square-foot retail outlet’s annual revenues top $30 million, with wine comprising 39% of sales, spirits making up 33% and beer contributing 27%. The remaining 1% comes from tobacco, specialty foods and general non-alcoholic merchandise.
“We’ve experienced tremendous growth,” Dierking says. “Our challenge now is to stay where we are at the top and still grow as a mature store. Today, we see a trend toward consumers wanting convenience and on-demand service, and they appreciate delivery. To that end, we’ve seen a lot of growth in our website. The vast majority of our online traffic is coming from mobile users.”
Nearly all of Hazel’s in-store inventory is listed online, with the only exceptions being allocated and limited-release products and closeouts priced at deep discount. The store stocks approximately 12,000 SKUs, including 7,000 wine SKUs, 2,000 spirits SKUs, 2,000 beer SKUs and 1,000 additional SKUs spread between cigars and tobacco, specialty foods, and general merchandise.
Wine comprises roughly 40% of the sales floor. Dierking notes that five of his store’s top 10 best-selling wines are sparkling selections, and he says dry rosés are also doing well. In spirits, whiskies dominate consumer interest. Dierking says small-batch Bourbons and ryes stand out, and he adds that since he moved the store’s ultra-premium spirits out of the wine cellar and into their own locked display in the spirits section, sales of those upper-tier products have also accelerated. Craft beer is also moving fast at Hazel’s, though Dierking says his consumers are starting to veer away from gimmicky labels and toward trusted local producers like Boulder’s Avery Brewing Co. Hazel’s boasts a robust cigar business as well. The store houses a walk-in humidor and has a loyal customer base that shops the category.
Colorado’s recent legislative changes that allow beverage retailers in the state to operate more than one unit may have an impact on the future of Hazel’s Beverage World. Dierking says he and his business partners have given some thought to adding another store in the state, but there are no immediate plans in the works. “Our philosophy is everyday low prices, and our margins are thin,” Dierking says. “Growing from a start-up to a mature store has required us to change our mindset, and we have to make sure the customer experience remains a key part of what we do.”Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.