California red blends, Tequila, Bourbon, vodka, and spirits-based RTDs are sparking industry growth at the retail tier through the coldest winter months and ongoing Covid fatigue. “RTDs continue expanding, and we’re seeing premium and ultra-premium brands being accepted by our customers,” says Mat Dinsmore, manager of Wilbur’s Total Beverage in Fort Collins, Colorado. “Bourbon and Tequila are holding their market share.”
Wine sales at Wilbur’s are led by Meiomi Pinot Noir ($19 a 750-ml.), Ménage à Trois and Apothic red blends (both $10), Kendall-Jackson Vintner’s Chardonnay ($12), and Kim Crawford New Zealand Sauvignon Blanc ($14). Top-selling spirits include Tito’s vodka ($28 a 1.75-liter), New Amsterdam vodka ($21), Hornitos Reposado Tequila ($28), and Jim Beam Bourbon ($23). In beer, the Odell Brewing sampler packs ($18 a 12-pack of 12-ounce cans) are doing well. “Tito’s continues to dominate,” Dinsmore says. “Brown goods are thriving.”
At Happy Harry’s Bottle Shops in Fargo and Grand Forks, North Dakota, customers are reaching for Apothic Red ($7.97 a 750-ml.), Risata Moscato d’Asti ($11.97), Fireball whisky minis ($0.97 a 50-ml.), Windsor Canadian whisky ($13.97 a 1.75-ml.), Busch Light ($19.97 a 30-pack), and Bud Light ($18.97 a 24-pack). “Sales have been up and down this January,” says CEO Dustin Mitzel. “Last year, many retired people who usually head to Southern states for the winter stayed here, and we saw a very strong January and February in 2021. This year many of those consumers resumed their winter travels, so we are navigating those inflated numbers.”
Retailers continue to juggle supply-chain issues and trading-up trends. “Nothing has really changed from the second half of last year,” Mitzel notes. “We are seeing customers shop for premium spirits and wine. As supply chain issues have carried over into 2022, consumers are constantly in search of hard-to-find items. When they come in, people tend to buy up.”
Rising costs and inflation are concerning for beverage alcohol retailers. “We all know our cost of labor and cost of doing business will continue to climb,” Dinsmore at Wilbur’s says. “The other uncertainty will have to do with the thousands of price increases and rampant inflationary cost spikes in almost all areas of our product mix. If January is an indicator, the costs of goods sold will jump anywhere between 4% and 22% for the remainder of the year.”
Staffing during the pandemic remains an issue. “We just have to make sure we have enough staff with folks not interested in working and the amount of team members we have out each week due to covid concerns,” Dinsmore says. “Staffing will continue to be this industry’s hardest area to control through 2022. It’s very difficult to expand your business when good help is so hard to come by.”
Happy Harry’s invested significantly in its buildings and technology over the past couple of years, and the company is focusing on its staff in 2022. “This year, our No. 1 focus will be to put additional resources into employee retention,” Mitzel says. “We are taking a deep dive into making the work environment and culture within our stores even better, focusing on enriching benefits and quality of life for our team.”
Despite challenges and uncertainty, retailers stay steadfast. “The first half of this year will be a roller coaster,” Mitzel says. “Out-of-stocks, supply-chain issues, and price increases will continue to make things challenging in an already competitive retail landscape. As we get into the second half of this year, things will stabilize and become a bit more predictable, in a positive way.”