Raley’s Family of Fine Stores is finding that efforts to educate shoppers about wine, beer, and spirits are paying off, as witnessed by healthy category sales and a committed, loyal customer base. The West Sacramento, California-based grocer—which operates 125 stores in California and Nevada under the Raley’s, Bel Air, and Nob Hill Foods banners—racks up annual sales of an estimated $3 billion. Beverage alcohol accounts for about 12% of that, Market Watch estimates, or some $250 million. “We’re really focused on education with our wine steward program and frequent in-store tastings,” says Curtis Mann, director of wine, beer, spirits, and beverage. “And we’re finding that our customer base is becoming more and more intelligent about wine.”
Indeed, the company’s commitment to educating both its staff and customers has resulted in a “huge uptick in sales,” Mann says. Because of his successful stewardship of Raley’s wine, beer, and spirits program, Mann has been named a 2018 Market Watch Leader.
Founded as a single store by Thomas Raley in Placerville, California in 1935, the company has grown into a major supermarket player in northern California and northern Nevada. In the ’90s, Raley’s acquired the Bel Air and Nob Hill Foods brands, and the company continues to grow via acquisition. This spring, Raley’s completed the acquisition of five Scolari’s Food & Drug stores in the Reno area and renamed them Raley’s. Michael Teel, chairman and CEO—and Thomas Raley’s grandson—is the majority owner of the company. Raley’s employs some 12,000 workers.
Mann joined the grocery chain five years ago following a number of years with wine suppliers, including Baldacci Family Vineyards and Trinchero Family Estates. He holds a diploma from the Wine and Spirits Education Trust (WSET), and is currently enrolled in the Masters of Wine program, having already passed the program’s practical component. Mann also serves as a judge at numerous wine competitions. At Raley’s, he oversees beer, wine, spirits, and all shelf-stable beverages, and directly manages the day-to-day operations of the wine category, including its team of 35 wine stewards.
Wine is the biggest driver of beverage alcohol sales at Raley’s, followed by beer and spirits. (Mann declines to reveal percentages.) Depending on the location, stores offer 1,000-2,000 wine SKUs, priced from $3-$300 a 750-ml. Top-selling wines include 2016 JaM Cellars Butter Chardonnay ($23 a 750-ml.), 2016 Bogle Chardonnay ($15), and Mumm Napa Valley Brut Prestige sparkling wine ($30). Since taking over the category, Mann has changed the wine assortment and the look and feel of the department to create a wine-shop atmosphere. He has also spearheaded the hiring of wine stewards. “Our goal is to find the classic wines of the classic regions of the world,” Mann explains, adding that such a mission requires significant tasting—between 4,000 and 5,000 wines a year, he estimates—and travel to wine regions around the world.
Due to the diverse offerings, Mann is seeing strong performances in a range of wine categories and regions, including premium Australian wines priced at $10-$25, Oregon Pinot Noir, wines from California’s Central Coast, French rosé, Chablis, and Chianti. “As customers become more educated, they’re looking for appellation wines that have a designated quality attached to the name,” Mann says of Raley’s premium wine offerings. But he’s also finding quality in boxed wines, a typically strong seller in supermarkets. “There’s a lot of high-quality wine going into boxed wines like Black Box and Bota Box,” he notes of the $20 3-liter packages. “Customers are realizing they can get quite a price-to-value offering there.”
The stores’ wine stewards “encourage customers to experiment with different brands and regions they may have not tried before,” according to Mann. The stewards host weekly in-store educational tastings (where legal), and stay on top of their own training with weekly educational calls. “We talk about what they’ll pour at the weekly tastings, what’s new that’s coming into the stores, and some up-and-coming trends so they’re armed with good information when they go out and speak with customers,” Mann says. “We have passionate wine stewards.” He notes that they all have received the WSET level 2 award in wine and spirits. And the program is expected to continue to grow. “We’re actively looking to add more wine stewards,” Mann says. “The chain is growing; as we become larger and open new stores, we’d like to put wine stewards in them.”
Imports And Crafts Gain
Raley’s stores stock up to 600 beer SKUs, priced from $8-$14 a 6-pack. Top sellers include Lagunitas IPA and Sierra Nevada Pale Ale (both $10 a 6-pack of 12-ounce bottles) and Firestone Walker’s 805 Blonde ($19 a 12-pack of 12-ounce cans). Mann says major domestic brews have “stopped the bleeding, and are holding their own,” while imports and crafts are gaining ground. “Modelo Especial, Corona Extra, and the other Mexican imports continue to do really well,” he notes, adding that within crafts, despite the popularity of IPAs, consumers appear to be looking for more sessionable, lighter-style beers. “It seems like every six months something new is popping up in the craft space while something else is declining.” Mann believes imported crafts could be the next big wave, pointing to the success of such beers at Raley’s as Munkebo Viking King porter from Denmark ($15 a 6-pack of 11.2-ounce bottles).
The spirits selection at Raley’s ranges from 500-800 SKUs, priced from $7-$200 a bottle. Top-selling spirits labels include Jack Daniel’s Tennessee whiskey ($25 a 750-ml.), Jameson Irish whiskey ($30) and Tito’s vodka ($24). “Tito’s continues to be a monster,” Mann says. “It’s really on fire and kind of overshadowing everything else.” Among spirits categories, whisk(e)y—including Bourbon, Scotch, Irish, and Japanese—remains strong at Raley’s. “It doesn’t seem like it’s going to slow down any time soon,” Mann remarks. “There are more and more interesting releases, and we’re really focused on finding those small-production, single-barrel batches.” Beyond whiskies, Tequila, particularly offerings priced at $20-$50, is a strong performer. “Customers are starting to realize that there are some really nice Tequilas that are $25,” says Mann.
The beverage alcohol departments at Raley’s stores don’t follow a standard footprint or cookie-cutter format. “Every store has a different look and feel,” notes Mann, adding that the departments typically measure between 800-1,000 linear feet and include 60 feet of beer cooler space. Three locations feature wine and beer bars where customers can enjoy on-premise drinks along with prepared food items, while eight stores contain Borgen wine cases that can accommodate between 50-75 age-worthy wines. Raley’s sees opportunity ahead with the wine and beer bars, and Mann says the chain has plans to open more.
When it comes to wine displays, Raley’s is moving away from branded displays in favor of style or varietal executions. “Our customers don’t shop by brand,” Mann explains. “They shop by style or varietal, and such a display helps with our education efforts as our customers can easily switch out a brand and try something new.” Wine is cross-merchandised out of the beverage alcohol department as well, paired with items in the meat, seafood, prepared foods, and floral departments, while high-end spirits can be found in display cases.
Beyond merchandising, Raley’s beverage alcohol department receives marketing and advertising support. In addition to the chain’s weekly sales flyers, the department is highlighted in local radio spots and occasional television programming around Sacramento, and it frequently participates in local food and wine events. While the department doesn’t have a dedicated email-marketing program, Mann says the company is considering it. “We’re very cognizant about over-emailing our customers,” he notes. However, the department is able to leverage data from the Raley’s “Something Extra” loyalty program. “We think of unique and innovative ways to get customers coupons,” Mann explains. “If we know that they bought a Chardonnay, for example, we’ll issue them a coupon for Chardonnay, but not necessarily at the brand level.”
The chain also sells beer, wine, and spirits online in California and Nevada. And in the Golden State, it provides delivery, though Mann says that most of the company’s online wine sales are through the “click and collect” pickup model. While he concedes that traditional grocery stores are facing increasing competition when it comes to online shopping across many categories, Mann believes that the wine category is somewhat protected. “It’s hard to ship wine; it’s heavy,” he explains. “You need someone to sign for it.” Rather, he predicts, “Wine will be a key portion of our store sales in the future. That’s why we’ve invested in wine stewards, customer service, and store experiences. Wine is a very confusing category, and consumers most trust a recommendation from a friend or someone in the aisle.”
Mann is proud of what he has accomplished at Raley’s in just five years. “We’ve changed the culture of how we sell wine, beer, and spirits.” he remarks. “We’ve made the beverage alcohol department integral to the success of the store.” But he’s far from finished. “We’ll continue to integrate customer service with the assortment,” Mann says. “And we’ll leverage our wine stewards even more. Education will be our biggest opportunity in the future.”