Covington, Louisiana, is an upscale town located on the north shore of Lake Pontchartrain, directly across the water from New Orleans. After Hurricane Katrina struck in 2005, many New Orleanians moved to this area, creating growth that’s been a boon for local grocer Acquistapace’s Covington Supermarket. In a price-sensitive market where grocery, pharmacy and big-box chains all sell beverage alcohol, Acquistapace’s has carved a niche as a beverage alcohol retailer, specialty food purveyor and cheese importer. Its annual sales for beverage alcohol alone top $10 million. “We’ve consistently maintained double-digit growth over the years,” says co-owner Adam Acquistapace.

Adam’s father, Steve Acquistapace, founded the store in 1963 and moved the business to its current location in 1985. He added beverage alcohol in 1999 to generate traffic in an effort to increase meat sales. “The strategy worked,” says Adam, who’s been running the beverage alcohol department since 2003. Adam worked at the store throughout his teens, along with his brother, Erik Acquistapace, who heads the cheese department. While Acquistapace’s stocks mainstream labels, a cornerstone of its strategy is offering products unavailable elsewhere—including 600 cheeses, a large selection of French and Italian wines, and high-end Scotch whiskies.

Adam says the family’s willingness to try new things has contributed to the store’s success. “We remodeled in 2009, and our beverage business increased 40 percent the following year,” he notes, explaining that the overhaul increased shelf space and improved the flow of the store. Acquistapace’s retail space spans 21,000 square feet, including 6,000 square feet devoted to wine, spirits and beer.

Wine Rules

Acquistapace’s carries about 6,300 wine SKUs, from Tisdale Chardonnay ($2.99 a 750-ml. bottle) to the 2008 Château Pétrus ($2,399.99). Wine makes up 60 percent of beverage sales, and the best-sellers are among the top SKUs in the entire store: the 2014 Meiomi Pinot Noir ($16.99) and the 2013 Kendall-Jackson Chardonnay ($10.49). The 2011 Château Moulin de Mallet from Bordeaux ($9.99) is also popular, and value-priced Bordeaux as a whole is among the fastest-growing categories. “In terms of volume, California Cabernet Sauvignon is our strongest wine category by a wide margin,” Adam says, noting that the 2014 Josh Cellars California Cabernet Sauvignon ($10.99) and the 2013 Caymus Vineyards Napa Valley Cabernet Sauvignon ($59.99) lead the charge. Acquistapace’s stocks up on allocated California Cabernet Sauvignon for the holidays, but Adam explains that it’s mainly for his customers’ convenience, as the online market for these brands dictates low margins.

French wines in the $10-to-$15 range sell particularly well, including the 2014 E. Guigal Côtes du Rhône white ($12.99 a 750-ml. bottle), the 2014 Caves de Pomerols Picpoul de Pinet ($9.99), the 2014 Château Petit Roubié Picpoul de Pinet ($9.99), the 2011 E. Guigal Côtes du Rhône red ($12.99) and the 2013 Paul Jaboulet Aîné Parallèle 45 Côtes du Rhône Rouge ($9.99).

Adam says that customers know the store as a source for Italian wines. Strong sellers include the 2011 Tenuta di Arceno Il Fauno di Arcanum ($19.99 a 750-ml. bottle), the 2011 Principe Corsini Chianti Classico Le Corti ($16.99) and the 2014 Villa Pozzi Nero d’Avola ($7.99). Spanish wines are also gaining traction, including the 2014 Ameztoi Txakoli ($16.99) and the 2013 Bodegas Atalaya Laya ($9.99). Adam plans to expand the store’s Spanish wine offerings.

Southern Spirits And Brews

Acquistapace’s stocks about 2,400 spirits SKUs, which comprise 28 percent of beverage sales. The New Orleans market is generally considered price-sensitive for spirits, and Adam agrees. “We have to pick through the portfolios, buy the right spirits and then price them correctly,” he says. The spirits selection ranges from Crown Russe vodka ($4.49 a 750-ml. bottle) to The Macallan Fine Oak 30-year-old single malt Scotch whisky ($2,099.99). Single malt Scotches draw traffic to the store, and Glenmorangie 10-year-old ($35.99) and Aberlour 12-year-old ($39.99) perform well. The top-selling spirit is Tito’s Handmade vodka ($29.99 a 1.75-liter bottle), followed by Jack Daniel’s Tennessee whiskey ($37.99). American whiskey is the strongest spirits category overall, with Buffalo Trace Bourbon ($19.99 a 750-ml. bottle) and Sazerac rye whiskey ($20.99) as top-sellers.

Adam frequently visits American whiskey distilleries to buy single barrels and offer his customers exclusive bottlings. “I started buying barrels of Jack Daniel’s and Elijah Craig in 2003,” he says. He has also purchased barrels of Blanton’s Bourbon, Buffalo Trace, George Dickel Tennessee whiskey and others. The store currently offers an exclusive Elijah Craig 12-year-old Bourbon for $22.99 a 750-ml. bottle.

Acquistapace’s has more than 900 beer SKUs, from Miller High Life ($2.99 a six-pack of 7-ounce bottles) to the 2014 Deus Brut des Flandres Belgian ale ($29.99 a 750-ml. bottle). Beer makes up 12 percent of beverage sales. The top-selling beers are brewed less than three miles away at Abita Brewing Co. Abita Amber ($7.99 a six-pack of 12-ounce bottles) leads, followed by the company’s rotating lineup of seasonal Big Beers ($3.99 a 22-ounce bottle), which include Abita Strawgator and Abita Abbey ale. Other Louisiana-made beers also perform well, including brews from Chafunkta Brewing Co., Chappapeela Farms Brewery, Covington Brewhouse, Bayou Teche Brewing, Gnarly Barley Brewing Co. and NOLA Brewing Co. “We get new beers every week, and we want our customers to have the chance to try them,” Adam says. To encourage experimentation, all 12-ounce beers are priced as both singles and six-packs. “The single price is marked up just enough to cover our labor in breaking the six-pack,” he adds. The store also offers 430 beers in kegs, including top-seller Bud Light ($116 a 15.5-gallon keg).

Merchandising Strategies

Even with 2,100 shelf facings, the wine department’s shelves are getting tight again, so Adam stacks 400 cases of French wine at the store entrance. He started creating displays of $10-to-$15 Bordeaux next to the cheese—a cross-merchandising move that’s working out well. Yet his main strategy is to offer consistently low prices. “Our customers hate how the chains raise and lower their prices weekly, so we don’t change ours,” Adam says. “If I can sell a bottle for $9.99, I’ll keep it at that price every day. Basically, everything is on sale. Our suppliers think we’re crazy, but in this competitive market, I need to be a little crazy.” The store doesn’t offer case discounts because Adam believes that practice penalizes customers who shop more frequently. “Why would we charge a customer who shops here daily a higher price than someone who stocks up once a month?” he asks. “We pretend everyone is buying a full case.”

Adam is modest about his retail philosophy. “There’s nothing fancy about what we do,” he explains. “We just give customers what they want.” It’s clear that the family’s business model is working. This year, the Acquistapaces plan to open a new 8,000-square-foot store nine miles away in Mandeville, Louisiana. “It will be a hybrid of what we do here, focused on wine and cheese at the same everyday low prices,” Adam says. “We’re going to do a lot of the same things, but with a twist.”

In some ways, the Acquistapaces have been lucky: They entered the wine business to sell more meat and ended up specializing in both. “We didn’t know anything about wine at the time,” Adam says. The store avoided the flooding from Hurricane Katrina, as well as the heat-damaged wine other retail outlets experienced. And the North Shore’s population continues to grow. But most importantly, the family has worked hard, tried new strategies and stayed committed to its vision in a competitive market. “In Louisiana, off-premise licenses are inexpensive, easy to obtain and unlimited in number, so the price wars will always exist here,” Adam says. “Our local wine trade is a battlefield. It’s a business and a game—and I enjoy both.”