Walking through the large and somewhat labyrinthine Hi-Time Wine Cellars in Costa Mesa, California, one is likely to run into a member of the family who runs the company. CEO Diana Hirst says operating the 22,000-square-foot store is definitely a close-knit affair. “My brother Keith does the spirits buying, and my brother Don works down on the floor,” she explains. “My son Charlie does all our Internet sales, and my son Kyle is one of our opening and closing managers.”
And that’s not all. “My sister-in-law Tracy runs our gourmet food section, and her daughter Skyler helps out occasionally while she’s in college,” Hirst says. “My nephew Jordan oversees our sodas and mixers, helps with deliveries, and does a bit of everything. My cousin Vickie works in the office, and my nephew Blayne works back in shipping. I’ve had other relatives here off and on.”
Hi-Time has been a true family business since its start in 1957. Diana Hirst’s father, Fritz Hanson, and his brother-in-law Jim McVay launched the store. They later brought in Fritz’s two brothers, Chuck and Harold Hanson, the latter of whom became a Market Watch Leader in 1986. Hirst started in the store at a young age, as did her sister and two brothers. “It was child labor,” she jokes, recalling the chores of bagging ice and carting bottles to the bottle shed. “My mom would drop us off on Saturday mornings and we’d be put to work. It was a lot of fun.”
Hirst’s brothers remain involved in the business, while her sister, Lynda Hanson, is an associate winemaker at Sonoma, California’s Hanzell Vineyards. Although officially retired, Fritz and his wife, Ida, are still somewhat involved. “My dad spends a lot of time up north fishing and gardening,” Hirst says. “But when he’s here, he helps fill orders, stocks shelves and talks to customers. All the old-timers know him.” Her mother handles banking for the store, among other tasks. “It’s not always easy to work with your family,” Hirst admits. “We do pretty well. At the end of the day, we put family first.”
That approach appears to be working, with the store generating revenues of more than $28 million annually. In all, Hi-Time Wine Cellars employs 60 people, many on a full-time basis, as it strives to meet the varied demands of its Orange County clientele. “We’ve been so fortunate the last few years,” Hirst says, noting that the recession took a toll, but the business has generally remained robust. “Since then, we’ve been up every year a little bit, at around 5 percent to 10 percent.” For her strong leadership of a multigeneration family business, Diana Hirst has been named a 2015 Market Watch Leader.
Broad Offering
It’s challenging to thrive as a single-unit independent beverage alcohol store in Southern California. There are myriad competitors within just a few miles of Hi-Time—everything from big box and grocery stores to convenience stores and independent outlets. Hirst says her company’s most powerful weapon is its selection. The store carries roughly 5,000 wine SKUs, 4,000 spirits SKUs, 2,000 beer SKUs and 1,500 cigars.
Dave Danni, account executive and spirits specialist for the distributor Young’s Market Co., says Hi-Time’s commitment to a broad selection of brands means the store not only differentiates itself from others in the area, but it also fulfills the demands of consumers. “Local residents have money,” Danni says. “They want different, they want a broad mix, and they want to make great drinks for their neighbors and friends.”
“Hi-Time aims to specialize in everything,” Hirst says. “Service and selection set us apart.” The retailer sees the store as integral to building brands in the industry. “If something is new, we might put it on the shelf, while it might not get shelf space someplace else,” she notes. “We’ve helped build a lot of brands over the years—and then they go to Costco.”
The competition also means profit margins are thin. “We try to offer very aggressive pricing because we have to,” Hirst explains. “We might not always be as cheap as Costco, but sometimes we are. It’s often a fight with the distributors because they try to offer the better prices to the chains, which are able to deal in thousands of cases. We can’t do that volume. We might buy 100 cases.”
The commitment to a broad selection means Hi-Time has products ranging from less than $10 to well over $1,000. The store’s tony location doesn’t mean everyone wants luxury products. “We’re located in the Newport Beach–Costa Mesa area, which is very affluent, but we have a spectrum of customers,” Hirst says. “We have a huge diversity of products, so it really lends itself to a lot of different types of customers.”
Those customers sometimes have unique demands. “We’ll carry liqueurs that have such low demand we only sell one or two bottles a year,” Hirst notes. “We have 10 amaros and 10 limoncellos. If someone requests something, we try to provide it.” Hi-Time does a strong business in corporate gifts and gift baskets, pairing wines and spirits with items from the store’s gourmet food, cigar and accessories sections. While demand slowed after the recession, Hirst says a recent real estate and building boom in the area has pushed it up again.
Customer Focus
Like many independent retailers, Hirst sees service as a way to truly differentiate her store from the competition. “The reason we’re here and the reason stores like us exist is because we can provide service and we have people who know about the products,” she says. “We really emphasize helping customers, along with like delivery and shipping. Otherwise people would just go to Costco or somewhere else.”
Hirst says the company’s staff undergoes continuous education. “We do a lot of self-training here in the store,” she says. “Suppliers or distributors will do classes for employees, and many members of our wine staff take the wine certificate classes.”
Danni of Young’s says the knowledge base is evident. “A lot of people who work at Hi-Time go on to work in the industry at a higher level,” he says. “That’s a testament to how much they know.” The store also has a growing craft beer business. “The guys who work in that area are very knowledgeable and mostly self-educated,” Hirst adds.
Often, educational offerings for consumers meld with the store’s goals of having a highly trained staff. Hi-Time holds twice-monthly classes, each covering a different wine region or style of wine. The classes cost $20 and are open to the public. “Our employees teach the classes and have to study up on whatever topic is being covered,” Hirst says. “It refreshes them in areas where they might otherwise be a bit rusty.”
Those classes are complemented by more casual wine and beer tastings, typically held in Hi-Time’s downstairs wine bar. The store’s $10 Tuesdays typically feature best values or new releases, while other organized tastings can run as high as $50 a session, depending on the product. The wine bar is also open to the public for general consumption, with machines that dispense 1-ounce pours, as well as half and full glasses of wine.
Hi-Time’s selection of more than 5,000 wine labels runs the gamut from around $5 to well into the thousands of dollars. Wines are displayed generally by region in a maze-like lower level. “Because we’re in Orange County, we do a lot of name brands,” Hirst says.
Among the big sellers is Silver Oak Cabernet Sauvignon from Napa Valley ($109.95 a 750-ml. bottle for the 2009 vintage; $99.95 for the 2010 vintage). “People are buying the nicer Cabs again,” Hirst notes. “High-end wines are coming back.” Another perennial favorite is Rombauer Chardonnay ($32.95 for the 2013 vintage). Hirst is also fond of selling wines from Hanzell, the winery where her sister works. The 2012 Hanzell Estate Pinot Noir retails for $99.95.
Sparkling wines—particularly Prosecco—have performed well recently, as have table wines from Spain. “They’re such friendly, good food wines, and they’re very affordable,” Hirst says.
Spirits have had a great run at Hi-Time in recent years. Much of the dynamism is in the store’s whisk(e)y section. Blanton’s Single Barrel Bourbon ($49.99 a 750-ml. bottle) is a hot seller, as is The Macallan 12-year-old single malt Scotch whisky ($47.99).
Hi-Time is also fighting for its share of hard-to-find whiskies like Pappy Van Winkle and Yamazaki. “Right now, we can’t get Yamazaki, and we must get 10 calls a day about it,” Hirst says. “We used to have stacks of the whisky on the floor, and now it’s super popular.” The same phenomenon is happening with certain beer brands, such as Pliny the Elder from Russian River Brewing Co. “Most weeks we might get two cases, but some weeks we get none,” Hirst says. “We limit it to one or two bottles per customer.”
One key goal going forward is to build Hi-Time’s online sales. Currently, the store’s website accounts for 10 percent to 12 percent of its total business. “But a lot of our sales happen because of the website,” Hirst says. “People see something online and come in to buy it or they’ll just call and talk to somebody.” Hi-Time offers a flat shipping rate of $9.99 for up to a case of wine delivered anywhere in California. The company is also looking to expand in Orange County through a partnership with beverage alcohol delivery service Drizly.
Most of all, Hirst notes that the store will continue doing what it’s done successfully for nearly 60 years, providing service and selection to customers in her community. “That’s worked for us up to now, so we’ll stick with it,” she says.