Foxtrot, the Chicago-based chain with e-commerce roots, is on a mission to transform the convenience store stigma from that of featuring low-end commoditized wines to a reputation for well-curated offerings that excite and educate customers. Unlike some other c-stores, “our point of view is that wine can be an exceptionally discoverable and exciting experience,” explains Dylan Melvin, who is beverage director of the quickly expanding chain. “That’s demonstrated through the education we provide our customers, as well as through our partnerships with authentic, artisan winemakers, all while not being pretentious. To have such a unique point of view in a channel like convenience is refreshing.”
Indeed, Foxtrot is unique among c-stores. Co-founded in the Windy City by Mike LaVitola and Taylor Bloom six years ago, Foxtrot started out as a delivery-only enterprise offering typical corner grocery fare to busy Chicago residents and workers. Guided by data from those early transactions, the pair opened the first Foxtrot storefront two years later. “We had the idea of re-merchandising a store format that people love, convenience stores, with products that people love, including wine, craft beer, and other locally made products,” says LaVitola, who serves as CEO. “Our intention was to create the corner store online. In recent years, we’ve expanded that into retail, and we’ve had fun growing the company across both channels.”
Today, Foxtrot has ten store locations—eight in Chicago and two in Dallas—and a continued strong e-commerce presence. The company, with about 300 employees, has received venture capital backing in recent years from the likes of Fifth Wall Ventures and Imaginary Ventures. At press time, Foxtrot had plans to open two stores in Washington, D.C. this month, with additional units in existing markets to follow. LaVitola declines to reveal annual sales revenue but says that company sales doubled last year, driven by surging demand for delivery during the pandemic and the addition of its tenth store. Sales are generally split 50% retail to 50% digital, with beverage alcohol accounting for a whopping 40% of total sales.
LaVitola describes the Foxtrot customer as “curious.” With all stores located in downtown urban areas, gender demographics are split 50/50, and “we see a wide range of ages,” he says. “Folks come to us for the convenience and delivery in under an hour, but mostly they’re curious for something new, whether it’s a cheese, a wine, or a local craft beer.” The retailer adds that Foxtrot sees a strong overlap in online and in-store shoppers.
The chain’s units range in size from 1,500-3,000 square feet. While layout varies by store, red wine is typically organized by location, and then varietal, with premium wines merchandised on top shelves and boxed wines on bottom shelves. The stores also feature waist-high shelving fixtures that call out what Melvin describes as Foxtrot’s “editorial wines, the wines that we’re really passionate about.” All white, rosé, and sparkling wines are stored in refrigerators “in keeping with the convenience element that we offer,” the beverage director explains. Beer, hard seltzer, and RTD cocktails, meanwhile, can be found in up to six cooler doors. Distilled spirits—only available in the Illinois stores—are organized by style.
While currently curtailed due to the pandemic, Foxtrot stores hold on-site consumption licenses, allowing customers to enjoy craft beers on tap and wines by the glass. “The ability for our guests to have a bottle of wine that they purchased in-store, uncorked and served to them, has been very popular,” LaVitola says, and he hopes on-premise consumption will resume this summer. Beyond beverage alcohol, top-selling items at Foxtrot include fresh-brewed coffee, breakfast tacos, and ice cream.
For customers who prefer to purchase from Foxtrot’s mobile app and have their orders delivered to them, Foxtrot employs its own fleet of couriers and provides delivery within a few miles’ radius of each store for $5. More than half of the retailer’s e-commerce orders contain beverage alcohol, LaVitola notes. “We sell a lot of different items for delivery,” he says. “But it often boils down to wine and ice cream.” Not surprisingly, the pandemic has placed higher demand for delivery. According to the retailer, delivery orders have tripled in recent months, with brick-and-mortar stores still experiencing positive comps.
Wine is the big driver in beverage alcohol sales at Foxtrot, accounting for 63% of total category sales, followed by beer and hard seltzers at 21% and spirits at 16%. At its largest stores, some 350 wine SKUs are offered, priced from $9 a 750-ml. of 2017 La Vieille Ferme Rouge to $175 for 2010 Dom Pérignon Brut Champagne, according to Melvin, who joined the chain in 2018 following sommelier stints at Chicago-area restaurants and hotels. The top-selling wine at Foxtrot is Maison Noir’s 2018 Other People Pinot Noir ($22). “It crushes it for us,” he says of the Oregon label.
The concept’s focus on small-label, discovery wines appeals to its treasure-seeking customers. “I’m proud of the trust that Dylan has been able to build with customers in getting them to take risks, try new wines, and have fun with the category,” LaVitola remarks. Most of the wines featured at Foxtrot are from small, family-owned wineries, Melvin adds, “many of which are farming grapes responsibly, which is important to us.” Those types of values sit well with Foxtrot customers. “Millennials are gravitating toward smaller-production wines and brands that are willing to talk about their processes, their ingredients, and their own narratives,” he notes.
Alternative wine packaging is another trend that Melvin finds promising. In addition to the “RTD nature” of canned wine, boxed wine “holds a bright future,” he says. “We’ll double-down our investment in boxed wine.” While there are challenges in educating consumers about the quality of boxed and canned wine, Melvin says, “Some of these wines are great.” He also points to the environmental upside the packages offer.
Foxtrot offers about 85 beer SKUs, with an average price of $12 a 6-pack of 12-ounce bottles or cans. Craft brews dominate beer sales at the chain, and the company puts a particular emphasis on locally brewed products. The top-selling beer each week is the latest arrival from Chicago-area Hop Butcher For The World brewery, with prices ranging from $15-$20 a 4-pack of 16-ounce cans. While IPAs remain the top style at Foxtrot, Melvin says lower-alcohol beers, such as Pilsners, are beginning to get some traction. Hard seltzers, meanwhile, have emerged as an important segment with numerous entries, and the beverage director is encouraged by the emergence of brands that feature real fruit and “more mature branding” than established labels. “There’s space for seltzers to grow, and I’m excited to see what happens,” he says.
The chain’s Chicago stores stock about 45 spirits SKUs, with an average price of $35 a 750-ml., and with Tito’s vodka ($24) the top seller. With allocated whiskies difficult to access, Foxtrot instead is focusing on emerging sectors such as RTD cocktails and non-alcoholic spirits. “We saw the trend toward RTD cocktails forming before Covid-19, but the pandemic brought a renewed urgency as many people lost the experience of being able to go to the neighborhood bar, particularly in Chicago with its iconic cocktail bars,” Melvin says. Singles of Crafthouse Cocktails ($6 a 200-ml. bottle) have performed well for the chain. Non-alcoholic spirits, meanwhile, are also trending at Foxtrot. “We’re seeing outstanding sales of these products,” he notes.
Foxtrot employs a host of merchandising and marketing tools to expand consumer awareness and drive sales. For beverage alcohol, bundle offers—discounted pricing on complementary products—have received a strong response, Melvin says. Examples include a trio of natural red wines ($63); a 12-pack of White Claw bundled with tortilla chips and guacamole ($27); and a Manhattan package, featuring a 750-ml. of Bulleit rye with bottles of Carpano Antica vermouth and Angostura bitters ($54). Overall, bundles make up 25% of Foxtrot’s wine sales, Melvin says, with wine and ice cream bundles (starting at $25) the most popular.
In-store events such as wine tastings and craft beer launches were hosted frequently prior to the pandemic; in recent months, virtual wine tastings have emerged as popular, LaVitola says. While Foxtrot’s first out-of-home billboard campaign was introduced over the summer, media support is largely digital. And earlier this year, the chain launched its first “Up and Comers” contest to identify small and locally made products with the potential to land on Foxtrot’s shelves. At press time, some 900 products had applied for the program, including hard seltzer and RTD cocktail brands. But overall, it’s the stores that are the company’s best marketing tool. “The right building in the right neighborhood acts as a billboard for our online business,” he says.
Following the launch of the D.C. stores, more units will open this year in Chicago and Dallas, with a goal of doubling store count by the end of 2021. In addition, “we’re looking at points beyond,” LaVitola says, though he notes that nothing is finalized. Beverage alcohol will play a key role in the brand’s future. “Wine drives such a large percentage of our revenue, so we plan to emphasize our wine experience online,” he explains. “We want to build a world of content around wine on the app and push it as part of our digital storefront.”