Thursday, March 26, 2009

Wine in Grocery Stores?

david_whiting_red_newt.jpg I have been spending some time in Albany for the past few days talking, but mostly listening, to all sides of the very hot issue of permitting the sale of wine in grocery stores. I would like to share some of my thoughts with you on this issue, which holds the potential to be transformational in the economy of upstate New York, and in New York as a whole. One of the points that I will stress is that this is issue is being hotly debated and will likely be decided in a matter of days. If you have an opinion about it, you have the opportunity today to have your voice make a difference. This opportunity will be gone very soon. So act TODAY! (Read more... for some help.)

Wine and food go well together and are truly are an example of what I, and many others, consider a healthy, responsible lifestyle. The convenience of being able to walk into a grocery store and purchase a bottle of wine would be very helpful for my family and my customers, and would help boost sales of wine in New York State.

But I believe that the question of selling wines in grocery stores is more than just an issue of retail sales. It's not just an issue of who sells more -- the liquor store or the grocery store -- or about who "wins". This is an agricultural and economic issue that has holds the future of the NY economy in the balance. Permitting the sales of wine in grocery stores will increase the overall sales of wine in New York State: this effect is very well documented in other states where this has happened. When I talk about boosting wine sales, I'm not just talking about selling more wine to the same group of customers. I'm talking about engaging an expanded set of wine consumers who, when presented with the opportunity and convenience of purchasing wine that is sold along side food, will adopt a routine that involves more frequent enjoyment of the health, social and gustatory benefits that come along with the responsible consumption of wine with their meals.

There are two types of sales that are essential to the success of any business. 1) Repeat sales to existing customers and 2) sales to new customers. I do believe that most liquor stores do a good job at culturing loyal customers who find value in the goods and services that they provide. But the fact that nearly 50% of New York State liquor stores have gone out of business in the past 20 years and that the current trend is to lose an additional 50 - 60 stores per year reinforces the idea that there may be a shortage of new customers.

If we consider the Farm Wineries of New York, we have seen tremendous growth with the number of wineries from about 150 wineries five years ago to over 260 today. And many of the wineries have shown annual growth in the double digits for the the past decade. In order to do this, we have prioritized our customers, both repeat customers and new customers, and grown an extensive customer base that has created "pull" in the retail markets (liquor stores) who carry NY wines.

The grocery store setting provides a unique opportunity to present wines to potential consumers in an atmosphere accompanying food, and at a time when that wine can be purchased for direct and immediate involvement in the preparation enjoyment of the meal at hand. Many of the best grocers already embrace the "eat local" philosophy and will embrace drinking locally as well. This is a plus, but not the only concern when it comes to marketing NY wines. All wines, regardless of origin, that are sold in this venues will help to build our novice wine drinkers in the food and wine culture, and to create new wine consumers. And, while the sale of NY wines has the biggest economic bang for the buck, wines produced outside of NY still contribute to the suffering NY state economy. That large body of new consumers will not be strangers to the wineries or the liquor stores.

Anyone familiar with how people are introduced to and enjoy wine realize that one's taste in wine is anything but static. Invariably the novice wine consumer will be satisfied with a handful of wines that he or she first enjoys for a while. But before long, curiosity and exploration takes hold and leads the consumer to new styles and varieties of wines, and to new outlets. These outlets include the grocery store, the winery, and the wine shop.

The economic effects of increased sales by NY wineries is far reaching. It reaches even farther than the obvious scope the wineries and the stores. The growers who grow the grapes, the supplier who sells the tractors, wire, posts. The fabricator who makes the tanks and cellar equipment. The supplier who provides bottles, corks and labels. The list goes on. Increased sales means not only more tax money but more economic prosperity all around.

My final point:

This issue is being hotly debated in Albany. And the decision will be extremely close. If you have longed for the time that you can express your political voice in a way that is truly heard, the time is now. I would encourage you to at least contact your local legislators (you can use the link below to send an email). But keep in mind, it is not only the representatives of your own district, but all of the legislators that need to hear your voice. Your voice is important, but it does not trickle down the hallways of the capital. Your voice needs to be heard, loud and clear, in each office. There are a lot of people in the capital that value your voice. To make your effort a little more manageable, I'm including a list below of some of the select people who most need to hear what you have to say.

Governor Paterson 518...header3.gif
Senator Malcolm Smith 518...
Senator Valesky 518...
Senator Aubertine 518...
Senator Stakowski 518...
Senator Foley 518...
Assemblyman Magee 518...
Speaker Silver 518...
Assemblywoman Christensen 518...
Assemblyman Parment 518...
Assemblywoman Lifton 518...
Assemblyman Canestrari 518...
Assemblywoman DelMonte 518...
Assemblywoman Eddington 518...
Assemblywoman Markey 518...
Assemblywoman Galef 518...
Assemblywoman Rosenthal 518...
Assemblyman Farrell 518-455-5491
Assemblywoman Jacobs 518-455-5385
Assemblyman Schimminger 518-455-4767

Some of the points that you may find important and want to express...

*NYS is 3rd in the nation for wine & grape production, but 46th in the nation per capita for the number of outlets to sell wine
*Wine in grocery stores does not put liquor stores out of business, in fact in the states that allow it, there are more liquor stores than in NYS
*Selling wine in grocery stores will increase sales of wine by creating NEW wine drinkers who will patronize grocery stores, wineries and liquor stores.

*35 other states allow the sale of wine in grocery stores.
*NYS is the only major grape growing state that does not allow the sale of wine in grocery stores.
*The number of liquor stores is decreasing in NYS by 60-80 per year
*There are only 2500 liquor stores left in NYS. California has 27,000 outlets to sell wine. North Carolina has 13,072 outlets
*Suppliers like tank manufacturers, label printers, bottle distributors, vineyard suppliers are all planning to expand and add jobs if NYS allows the sale of wine in food stores

David Whiting
winermaker/ co-owner
Red Newt Cellars


  1. Interesting arguments. I am also for the introduction of wine into NY grocery stores. However, will NY vineyards be able to produce a yield that will be able to supply grocery chains across the state without sacrificing quality? What kind of shift do you see from the vineyard side of it? New equipment? More land? New harvesting techniques?


  2. The key change that we are anticipating is, as a result of an expanded customer base, the opportunity to grow and be more profitable so that we may reinvest in vineyards, winery equipment, facilities and marketing. It's a win win win for NY State agriculture and associated industries. This change creates will give us the opportunity to grow into an expanded market.

  3. As a consumer of wine, I've found that the ratio of price to quality is a bit higher to its competing regions. I understand that part of it is that it's more difficult to grow many types of wines in this type of climate. Therefore, it will cost more to make the wine. While wines like rieslings grow better, but it's difficult to find a decent one for under $15. Do you see prices shifting with this new level of demand?

  4. One of the challenges in the Finger Lakes that we face regarding price is managing the economy of scale. As small producers, we spread our operating overhead over a fewer number of cases, which results in a higher price that we must charge. As we all grow in volume, we will be able to work more efficiently and cost effectively, and charge more competitive prices. This is why it is so important that we have the opportunity to increase our ability to reach customers, and build a wine appreciative customer base as I mentioned above.

  5. This makes quite a bit of sense. I've been an advocate for wine in groceries stores for a while now, but this has definately helped shed some light on clear reason as to why this should be. Thanks and hoping we'll meet one of these days. I've been planning on making a trip along the Seneca wine trail.

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