Many independent grocers today take pride in featuring locally grown and produced goods. But California’s Oliver’s Markets takes its commitment and responsibility to support local products to a whole new level with four stores located in Sonoma County, home to a plethora of world-class wines. “Our mission statement is to offer the broadest selection possible of local products,” says Joshua Kirchhoff, corporate wine and liquor coordinator. “We’re fortunate to be located in a market like Sonoma County.” As a result, as much as 60% of the chain’s wine, beer, and spirits offerings are produced nearby, earning the stores strong growth trends in a competitive market, as well as trust and loyalty from its customer base.
While annual sales revenue at the 35-year-old grocery chain is undisclosed, beverage alcohol is a key contributor. Wine, beer, and spirits account for a “very substantial” 8% of total sales, Kirchhoff says, and represent about 10% of the stores’ selling space. “We only have four locations, but we do quite a bit of volume,” the retailer says. Not surprisingly, wine is the biggest driver in the beverage alcohol department, representing 45% of category sales, followed by beer at 37%, and spirits at 18%.
Oliver’s was founded in 1988 in Cotati, California by former produce-stand operator Steve Maass, with an early focus on fresh and local products. In 2000 and 2007, locations in Santa Rosa were added, which—just like the original store—were housed in former grocery stores. In 2016, Oliver’s unveiled its first ground-up store, a 35,000-square-foot space in Windsor. The following year, Maass sold a portion of the business to its employees through an employee stock ownership plan, with workers eligible for vesting after three years of employment. Today, Oliver’s employs more than 900 full- and part-time employees.
Savvy Shoppers
The four stores attract a mix of consumers, Kirchhoff notes, with the Cotati and Santa Rosa stores in the Rincon Valley the most heavily focused on beverage alcohol. “Overall, our customers are very savvy,” he says. “We’re right in the heart of wine country, so one of my biggest challenges is to ensure that my local sets are stocked and that I have the most exciting wines at competitive prices.” With large and boutique wineries scattered around the area, “our customers are educated and know what the wineries charge, so we have to make sure that our price integrity is on point,” the retailer explains. “In Sonoma County, our customers know their wine.”
Kirchhoff joined Oliver’s last year, but he has a deep pedigree in the wine business, including an earlier stint at the chain. For the last 25 years, the executive has worked on both the supply and buying sides of the business, largely in Sonoma. From 2015 to 2019, Kirchhoff—who holds an MBA in wine business from Sonoma State University and is a certified sommelier—was the wine manager at the Rincon store. Today, he’s responsible for all wine, beer, and spirits purchasing, setting pricing, and writing ads and reviews.
Kirchhoff works with wine managers and assistant wine managers at each store, along with each location’s team of four to five department members, on product education and merchandising. “We try to hire people who are eager to learn and excited to work in the department,” Kirchhoff says, particularly since every wine, beer, and spirits product stocked at the chain is tasted and reviewed by each team member. Staff is also encouraged to visit partner wineries, breweries, and distilleries as frequently as possible. As such, Kirchhoff commends the Oliver’s beverage alcohol team for “their dedication, knowledge, and commitment to customer service.”
‘Sonoma Wine Hub’
Oliver’s offers more than 1,400 wine SKUs, priced from $5 a 750-ml. of Dona Sol Cabernet Sauvignon to $325 for Louis Roederer Cristal. “We’re a hub for local Sonoma County wine,” Kirchhoff says, “so we try to get as many selections from our local partners as possible.” Zinfandel, Pinot Noir, and Chardonnay “rule” when it comes to Sonoma County wines, the retailer notes, so labels like the 2021 Mazzocco Zinfandel ($20), 2020 Balletto Russian River Valley Pinot Noir ($22), and 2021 Raeburn Chardonnay ($17) are top sellers.
The chain’s Oliver’s Own line of wines are also fast sellers. Richard Williams, the chain’s former wine and spirits buyer, launched the private-label wines, all Sonoma County appellated, about ten years ago, and “I’ve been able to carry on the tradition,” Kirchhoff says. The wines are available in Chardonnay, Cabernet Sauvignon, Meritage, Zinfandel, Pinot Noir, Sauvignon Blanc, and the recently released Sparkling Brut priced from $11-$18. “They’re fantastic wines from local vineyards with phenomenal prices,” he says.
As with wine, locally produced beers are a priority at Oliver’s Markets. The stores stock more than 1,300 beer SKUs, priced from $3 a 12-ounce bottle of Flying Dog Donzo imperial porter to $250 for 750 ml. of Samuel Adams Utopias. Crafts outsell mainstream domestics and imports, led by the likes of area breweries Russian River, HenHouse, and Cooperage Brewing. “People come to us for the newest and latest beers,” says Kirchhoff, pointing to brands like Russian River’s recent limited-time-only Pliny for President 2024 triple-hopped IPA ($7 a 500-ml. can), which sold out in days. “Our craft beer customers are so knowledgeable. We’re always trying to stay ahead of them,” Kirchhoff says.
Spirits selection at Oliver’s, meanwhile, is a mix of national, imported, and local brands. The stores stock more than 800 spirits SKUs, with a general sweet spot of $15-$35 a 750 ml. Top-selling labels include Tito’s and Smirnoff vodkas (both $17), and Casamigos Reposado Tequila ($52). But local craft distilleries are on the upswing. “We have a lot of really cool local whisk(e)y and vodka brands,” says Kirchhoff, pointing to offerings like Hanson of Sonoma organic vodka ($25) and Redwood Empire Pipe Dream Bourbon ($30). RTDs and canned cocktails ($12-$19 a 4-pack of 12-ounce cans) are showing strong momentum, the retailer adds, and the chain has been increasing its offerings in the space. Indeed, the grocer recently released Oliver’s Own canned cocktails in two different expressions, Paloma and Vodka Lemonade.
Impactful Merchandising
Whether it’s local wines, featured promotions, or new products, Oliver’s relies on impactful displays and merchandising practices to drive planned and impulse sales. The stores, including the newest location in Windsor, bring attention to locally produced brands with bright signage. Displays and cross-merchandising—both in department and outside of the department—are plentiful. “We work around the Hallmark calendar for themed displays,” says Kirchhoff, along with local events, such as the Sonoma County Harvest Fair. “Lobby displays in each store encompass all of the beer, wine, and spirits that are on promotion each week,” he notes, such as the recent 2022 Flowers Rosé of Pinot Noir ($25 a 750-ml.), Sauza Hornitos Tequila ($20), and Mother Earth Cali Creamin’ vanilla cream ale ($10 a 6-pack of 12-ounce cans).
Longer term, the stores regularly promote a “Winery of the Month,” featuring special pricing and end-cap displays. In March, the chain launched the monthly “In Good Spirits” program. Oliver’s quarterly “Real Everyday Values” programming, meanwhile, offers special deals and displays on value brands, including wines, beers, and spirits, such as the recent 2021-2022 Rare Earth organic wines ($9 a 750-ml.), Bacardi Grapefruit rum ($8), and Seismic Hazy IPA ($14 a 4-pack of 16-ounce cans).
The grocer is a big proponent of cross-merchandising displays. Kirchhoff points to in-department displays that, for example, merchandise a spirits brand that’s on sale with a cocktail recipe and all the necessary ingredients. Outside the beverage alcohol department, wine is often found merchandised in the meat, seafood, cheese, and produce departments. “Displays are a full-court press for us at all times,” the retailer says.
Up until the Covid-19 pandemic, the Windsor store’s on-site tap room Tavern Off the Green staged product tastings. Kirchhoff is hopeful that they will resume soon. In the meantime, the tavern serves six to eight local brews ($7 a 16-ounce pour) and wines ($7 a 5-ounce pour) on tap, along with pub-style menu offerings. Whenever possible, the store strives to serve draft versions of promoted products so customers can sample prior to purchasing. Highly coveted products also make their way to the tap room, Kirchhoff notes, such as the recent Russian River’s Pliny the Younger.
Blockbuster sales events are another tactic that help drive sales of beverage alcohol at the chain. The four- to six-week holiday sale is the biggest, with special savings on 45 select brands, including established and emerging labels. Every July, Oliver’s offers a 20% off sale on all rosés, and in September, the chain promotes its 20% off sale on local wines. “That’s darn near every wine in the department,” Kirchhoff jokes. “Customers go crazy for that sale.”
In addition to the weekly circular, Oliver’s relies on digital support, including its website, email blasts, and social media, to promote its specials. Regular ads also appear in Santa Rosa’s “Press Democrat,” and the chain has been a longtime sponsor of Krush (95.9) Radio’s weekly wine show.
Kirchhoff says that while the company often talks about expanding Oliver’s with another store, for now, “where and when have yet to be determined.” That’s probably just as well, as the executive and his team have their hands full maintaining the already high standards of Oliver’s beverage alcohol department. “Our goal is to continue our growth and increase exposure for our partners,” says Kirchhoff. “That way, our customers know they can rely on us to present them with new things and they can go home with exciting new purchases.”