Whiskey and Wine
By Robert Volz
In spring of 2012, the Oregon Liquor Control Commission (OLCC) allowed four liquor stores to sell beer and wine as a pilot program. After a successful year, the OLCC is allowing any liquor outlet to become “non-exclusive,” meaning they would be allowed to expand into beer and wine sales.
For an organization that was started post-Prohibition to ensure liquor wasn’t sold by the mob — and really hasn’t changed since — this is huge news.
It is important to understand how a liquor store works in Oregon. An operator leases a building, hires a staff and pays for all business costs. All costs except the big one: the liquor inventory, which is held by the State of Oregon, or the OLCC, to be exact. Each store receives a monthly base for operating expenses, usually around $1,600 a month, plus a commission from 6.2 to 8.8 percent on all liquor sold.
When selling to a bar or restaurant — “club sales” in industry speak — the bottle goes for a little bit cheaper, usually 5 percent off the listed price, and, of course, the commission is less to the operator. All liquor prices are set by the OLCC, from Portland to Pendleton, regardless of quantity a store sells.
When bringing in wine, beer or alcohol-related paraphernalia (glasses, corkscrews, etc.), the operator could pick any margin they choose. Considering liquor sales top out at 8.8 percent commission, making an average 25 percent mark-up on a bottle of wine seems like easy money.
Selling beer and wine isn’t for every liquor store. First, a store must have a minimum of $1.5 million in annual sales — not a problem for big city stores but difficult for rural ones. No shelf space normally devoted to hard alcohol can be removed. Lastly, if a store operator brings in beer and/or wine, the monthly stipend disappears. When you consider adding coolers, shop space and having to hold onto the beer/wine inventory, it’s not for everyone.
Also, a liquor store is accustomed to dealing with one agency, the OLCC, for their entire liquor inventory. With beer and wine sales, a store has to work with many commission-based sales people, from the largest distributors to winemakers themselves peddling their bottles.
“The four pilot stores, Pearl Specialty Liquor, Hollywood Liquor (now Hollywood Beverage) Giorgio’s West Bend and Lincoln City North were a part of a program to gently modernize what it means to enter a liquor store. This is the first step of many in improving the shopping experience for our customers,” said OLCC Director Steve Marks.
Pearl Specialty Market & Spirits offers a little more than 200 wines, starting with a $5.99 Semillon to a $299.99 bottle of Louis Roederer’s Cristal. Of course, Oregon is well represented with not simply brands that might be a part of a grocery’s “store set” but smaller producers that don’t even have a UPC code — like J. Daan and Matello. The owner himself selects the wine.
Hollywood Beverage started at 38th and N.E. Sandy with a few shelves of wine dictated by the area’s two biggest distributors, Young’s Columbia and Southern/Odom, based on Nielsen ratings — the same ratings system that determines top TV shows. Nielsen ratings might work elsewhere, but here in Oregon, we tend to be a wine-savvy audience where a healthy discussion might erupt about Barberas from Alba vs. Asti.
“Basically, the state needed to modernize somewhat or face a revolt like what occurred in Washington,” said Dan Miner, operator of Hollywood Beverage, now in a block-sized warehouse with indoor parking. “It used to be there were two cash registers, one for liquor and one for ‘other,’ lemons, limes, ice and mixers (soda pop) before the change.”
“Not every vodka customer comes in for Grey Goose; some just want a bottle of HRD,” Miner continued. “For the same reason, we hired Robert (the writer of this article) to keep the entry-level wines — some brands one would find in any national grocery chain — plus seek out smaller production wineries like Johan, Dion, and Love & Squalor.”
Giorgio’s West Bend Liquor used to be a part of Ray’s, a local grocery store until they moved across the street to a specious new building where they not only have beer and wine but also one of the top collections of vermouth in the state. “We have over 600 bottles of wine and Central Oregon’s best selection of Oregon Pinot Noir and Cabs from California. I’m really proud of our selection,” said Wilton Koernig, wine steward.
Saleem Noorani of Springfield Cork & Bottle Shoppe loves the new system. “Now they can come and shop for all their purchases rather than having to go to a grocery store to finish up their purchase of beer and wine,” said Noorani.
Lake Oswego Liquor (now Lake Oswego Liquor, Wine & Cigar Shop) owner Barry Karimi has long been a proponent of the emerging craft distillery movement in Oregon, from Clear Creek Brandy to Ransom Gin. He was the first to bring in wine after the rule change.
“I love carrying wine. My nearest wine competitor, an Albertsons, has a ‘wine set’ created at their national headquarters in Boise, where the local wines are, for the most part, ignored unless you are a national brand like Erath, Ponzi or King Estate,” Karimi said. “My customers are passionate about local spirits, so why wouldn’t they be about local wines?”
Critics of the looser rules include convenience store owners, who worry about losing business, and big grocers, who say the changes don’t go far enough.
Robert Volz advises Hollywood Beverage on their wine program and owns Pour Wine Bar & Bistro in Portland. He’s certified by The Court of Master Sommeliers as an advanced sommelier.