As an omnichannel retailer grounded in e-commerce, Foxtrot finds itself in an unusual position. “We can spread a wide net for delivery, but also use our brick-and-mortar locations for customer acquisition to bring them into the omnichannel,” says Dylan Melvin, beverage director at the 29-unit and growing multi-city chain. Those abilities have helped to quickly establish Foxtrot as an innovator in the beverage alcohol space and a retailer with vast opportunity for growth.

Foxtrot was established in 2013 by Mike LaVitola and Taylor Bloom as a delivery-only c-store. The rapid success of the concept led to the opening of its first storefront in Chicago two years later, with a focus on artisan and locally produced food and drinks. By 2019, the concept had expanded into Dallas. Today, Foxtrot has grown into a $75 million enterprise serving several major cities and metropolitan areas. Some 80% of its sales come from its retail stores, with the other 20% hailing from e-commerce. From day one, beverage alcohol—wine in particular—has been a key contributor to its success. According to Melvin, the chain projects beverage alcohol revenue to reach $15 million this year, about 20% of total sales revenue. Wine accounts for 67% of beverage alcohol sales at the chain, while beer and hard seltzers comprise 21%, and spirits contribute 12%. In 2022, category sales soared 20%, Melvin notes.

Melvin joined Foxtrot in 2018 following several years in food and beverage roles in various Chicago restaurants and bars. He previously served as assistant beverage director at Ace Hotel, as well as operations manager for Chicago chef Stephanie Izard’s restaurants. Melvin also has experience in front-of-house hospitality roles, including at restaurants operated by Charlie Trotter. He has additionally worked in brewing production at Pipeworks Brewing Co., and has a small ownership in Chicago’s Is-Was Brewing. The move to retail with Foxtrot has been a great opportunity, he adds, noting that he’s grateful LaVitola shares his passion for product curation and saw potential for him to lead Foxtrot’s beverage program. At the chain, Melvin’s responsibilities include selecting products to sell, assortment optimization, inventory and supply-chain management, pricing, promotions, and forecasting. 

For his success in navigating a booming category both in-store and online during a tumultuous time, all while aiding a growing company to expand into new markets, Melvin has been named a 2023 Market Watch Leader. 

Well Positioned

With e-commerce and delivery operations in place, Foxtrot found itself well positioned in 2020 with the start of the pandemic, as other retailers scrambled to accommodate soaring demand for online orders and delivery. “We went from being a luxury service to a necessity almost overnight,” Melvin recalls, as e-commerce surged to 90% of Foxtrot’s sales at the height of the pandemic. “It was wild and a huge opportunity for customer acquisition,” he says of the period. “And because bars and restaurants were closed, and people could only enjoy adult beverages at home, our category was particularly impacted.” He adds that the chain capitalized on the opportunity by “building digital experiences for people to enjoy together,” such as Zoom tastings. Melvin adds that while the “numbers have now come back down to Earth, sales trends are still significantly higher than pre-Covid.” 

The pandemic didn’t slow down the buildout of new stores either, as the company received a boost from Series C funding to the tune of roughly $160 million. In recent years, Foxtrot has added stores in Chicago, Dallas, and Washington, D.C., as well as expanded into Virginia and Maryland. Earlier this year, the chain entered the Austin, Texas market, and according to Melvin, “another half dozen” stores could open by year end in Washington, D.C. and Texas. Wine and beer are sold at all Foxtrot locations, but spirits sales are only permitted in Illinois. The sale of spirits-based RTDs is generally permitted in Illinois, Virginia, and Washington, D.C., but prohibited in Texas and Maryland. 

Foxtrot stores range in size from 1,500-6,000 square feet, and the company has three general retail models. “Express” stores are small-footprint spaces located in bustling urban professional areas, such as the chain’s unit in Chicago’s Willis Tower. “Standard” stores average 3,000-4,000 square feet and are typically based in residential areas; those stores don’t often provide delivery. “Large” format stores, meanwhile, usually offer the largest assortment of product and feature an expanded back-of-the house section, used for delivery fulfillment. 

While store layouts vary by location, typically 12 linear feet is dedicated to wine (largely reds), 12 linear feet goes to beer, and 6 linear feet goes to spirits, where sold. Due to its convenience store model and customer penchant for immediate consumption, Foxtrot stores devote ample space to chilled product, including four to six cooler doors for beer, hard seltzers, RTDs, and ciders, and four doors for chilled white wine, rosés, and sparklers. Nearly all locations provide the opportunity for customers to imbibe in on-premise consumption of wine by the bottle or glass ($10) or a rotating pint of a local craft beer ($6) via what Melvin calls the chain’s elevated counter service. “With just a $5 corkage fee, you can’t find a better value,” he says. Most stocking decisions are made at the corporate level, Melvin notes, but store-level team members are “our eyes and ears,” and can influence the products that are offered at each store. 

Private-Label Panache

On average, Foxtrot offers 160 different wines, a robust selection for any c-store. Wines are generally priced from $10 a 750-ml. bottle of LaVieille Ferme red blend to $300 for the 2013 Dom Pérignon. According to Melvin, 60% of the chain’s wine sales come from wines priced under $25 a 750-ml. 

Foxtrot has quickly become known for its private-label wines, and they’ve emerged as some of the chain’s top sellers. “Kid Sister has become our house wine,” Melvin says, pointing to the line that includes a rosé from Hérault and a Sauvignon Blanc from New Zealand, both priced at $15 a 750-ml. Additionally, the chain has partnered with Skurnik Wines & Spirits on labels such as Sun Lips rosé, Grass Stains Sauvignon Blanc, and Violet Dive Cabernet Sauvignon ($22 each). In the spring, the chain partnered with California’s Jumbo Time natural wine on the release of Pizza Party Pet Nat, a Lambrusco-like sparkling red, and Lake House orange wine ($35 each). 

Foxtrot recently released a 3-liter boxed wine in partnership with Jorge Ordóñez Selections. Lado a Lado ($25 a 3-liter box) launched in a rosé, a red blend, and a white blend. “We’re really excited,” Melvin says. “We expect the value and sustainability of the brand will resonate with customers.” Over the summer, the chain offered wine-based “spritz cocktails” on tap ($11), created exclusively for Foxtrot by POE Wines founder and winemaker Samantha Sheehan, featuring her Mommenpop aperitif. “We have a discerning audience, and discoverability helps drive our sales,” Melvin says of the success Foxtrot has experienced with private-label wines. 

Beyond private labels, top selling wine brands at Foxtrot include Champagne Canard-Duchene Brut Léonie ($46 a 750-ml.) and Gulp Hablo orange wine ($23). “We sell more orange wine than Chardonnay,” Melvin reveals. “Orange wine is growing for us year over year.” Another growth area is non-alcoholic wines, he adds, pointing to brands like Oddbird non-alcoholic sparkling wine ($29). 

E-commerce orders at Foxtrot over-index on beverage alcohol—and particularly wine—with an incredible 50% of the company’s online sales including beverage alcohol. Indeed, while e-commerce sales account for 20% of the chain’s total business, for wine, it’s 40%, Melvin notes. He credits the company’s e-commerce team for its creativity in building out the product pages for wine on its website and app. “They’ve created rich stories on the wines we carry, including the flavor profile and background on the winemaker,” he says. “It’s a rich shopping experience.” 

Broad Digital Options

Foxtrot offers about 100 facings of beer, hard seltzers, and ciders, priced from $8 for a 4-pack of 12-ounce cans of Middle Brow Bungalow lager to $40 for Revolution’s Café Deth barrel-aged coffee stout. As the chain emphasizes craft brews, depending on the market, local beers like Half Acre Daisy Cutter pale ale ($22 a 12-pack of 12-ounce cans) in Chicago and Manhattan Project’s Red Gate amber ($13 a 6-pack) in Dallas tend to be the top sellers. Among hard seltzers and RTDs, High Noon ($20 an 8-pack variety pack) is the chain’s mainstay. “It’s High Noon or bust for us,” Melvin says. 

As many as 110 spirits offerings are available at the chain’s Chicago stores, ranging from Plantation 3-Star rum ($22 a 750-ml.) to Sunday’s Finest Gold Fashioned Cocktail blended whiskey ($150). Top sellers include Tito’s vodka ($25), Four Roses Bourbon ($27), and Play Nice x Metric Espresso Martini ($33), a private label RTD cocktail produced by Chicago’s CH Distillery and featuring the locally produced Metric roasted coffee. 

As a retailer with technology at its core, it’s no surprise that Foxtrot relies on digital strategies to promote its offerings. Melvin says that most of the marketing support for adult beverages is funneled through the digital loyalty membership program. Among the perks members receive are discounts on bottles of wine, where legal. Foxtrot’s website and app also cleverly cross-merchandise beverage alcohol products as part of bundles, such as the recent Luca Paretti Prosecco with the chain’s berries and bubbly gummy mix ($20). In store, the company has recently found success merchandising singles of beer in its grab-and-go coolers that stock items like charcuterie. And in-store events, such as wine tastings and craft beer launches, have helped to build excitement for Foxtrot’s adult beverages, Melvin says. 

At just a decade old, Foxtrot has already made a name for itself for its unique beverage alcohol program. Melvin says the company is just getting started. “We believe we have a pretty incredible opportunity to improve the everyday shopping experiences of our customers,” he says. “We know we’re building something unique.”