Interview: Ron Vaughn of Argonaut Wine & LiquorDecember 29, 2017
At 40,000 square feet, Argonaut Wine & Liquor is considered the largest beverage alcohol retailer in metro Denver and one of the largest in Colorado.The store stocks 17,000 SKUs, and according to Ron Vaughn, co-owner and COO, has continued to see rising sales despite increased competition and the state’s legalization of recreational marijuana. SND contributing editor Terri Allan recently spoke to Vaughn about the dynamics driving the Colorado drinks industry.
SND: What impact are you seeing from the passage of last year’s law opening up licensing to chain stores?
Vaughn: We’ve seen some additional competition, but nothing that has moved the needle. There’s been some surprise that the chain operators haven’t quickly grabbed numerous licenses. That could be due to the fact that the law requires them to purchase two existing licenses in order to get one. That has added value to the small stores that could have gotten wiped out if that wasn’t part of the legislation.
SND: Will you open another store, and do you see other independent players doing so?
Vaughn: As of right now, we have no plans to, and it seems that other retailers are holding their cards in their back pockets. You have to find the areas that are underserved, and then be willing to risk capital.
SND: Are you seeing any impact from the legalization of recreational marijuana?
Vaughn: I believe we are, as marijuana sales in the state have reached $1.7 billion. Denver is going through a huge influx of people moving in from out-of-state. The trick is to be nimble and understand the changing demographics of your customers.
SND: What are the trends for wine at Argonaut?
Vaughn: The price point has gone up over the last couple of years from $9-$12 a bottle to $10-$15. Champagne and rosé are the two hottest categories, while Kim Crawford Sauvignon Blanc and La Marca Prosecco are solid performers.
SND: What are you seeing in spirits?
Vaughn: Colorado has a strong local whisk(e)y market, and that impacts sales of whiskies from other states a bit. Inventory remains challenging for some whisk(e)y brands, but our overall top-selling spirits brand is now Tito’s vodka, followed by Jameson Irish whiskey and Espolòn Blanco Tequila.
SND: Which Bourbons are challenged by allocations?
Vaughn: It’s mostly the Sazerac products—Van Winkle, in particular, of course. They just don’t have the supply. With these labels aged 12, 15 or 20 years, they can’t just turn on the spigot. Bourbon has come a long way. Ten years ago, you couldn’t give it away.
SND: In general, how big have craft spirits become for you in terms of sales and shelf space?
Vaughn: Craft spirits are still less than 2% of total store sales, but they resonate with younger consumers, so they’re important to stock. Brands like Stranahan’s, Tin Cup, Laws and Spirit Hound do well, and we recently reset our whisk(e)y section to accommodate them.
SND: How important is delivery in your market?
Vaughn: We’re Drizly’s largest retail partner in the state and among the top five nationally. It’s becoming a huge part of our business, but it’s a double-edged sword. It’s labor intensive, and customers who order through Drizly don’t come into your store, so you’re losing out on any incremental sales.
SND: How are you preparing for 2018?
Vaughn: We’ve found that younger consumers really like to know the stories behind brands. So we’ve installed numerous video screens that enable those stories to be told. We’ve also added curbside pickup at the store, and our website will soon feature a virtual sommelier. With bigger players trying to muscle into this business, we need to be good at our job. If you stand still, you’ll get passed by.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.