Retailing Role Model

A unique business strategy put Indiana Liquor Group on the fast track.

In 2018, the late David Hartley created Indiana Liquor Group (ILG), a company that acquires different liquor stores and operates them under one umbrella. Now, the business is run by one of the original co-owners, Chris Lamb (pictured), who has nurtured Hartley’s vision and built ILG into an ever-growing portfolio of liquor store brands.
In 2018, the late David Hartley created Indiana Liquor Group (ILG), a company that acquires different liquor stores and operates them under one umbrella. Now, the business is run by one of the original co-owners, Chris Lamb (pictured), who has nurtured Hartley’s vision and built ILG into an ever-growing portfolio of liquor store brands. (Photo by Erik Lubick)

Thanks to a unique business model that has lifted margins, along with trust from local store owners and consumers and a driven and knowledgeable leadership team, Indiana Liquor Group (ILG) is getting noticed in the Hoosier State and beyond. Indeed, liquor store operators around the country would be wise to keep an eye on this emerging operator who is giving hope to small retailers looking for an exit strategy while building an ever-growing portfolio of liquor store brands. 

ILG was the brainchild of late Indiana businessman David Hartley. Having sold off a medical equipment company in 2017, Hartley pursued new business opportunities and became fascinated with independent liquor stores, particularly the plight of longtime owners without a succession plan. By leveraging Indiana’s allowance for central warehousing of wine and spirits by retailers, Hartley foresaw that by combining banners under a single umbrella, the group could purchase more aggressively, thereby improving margins. 

Along with four co-owners—Nate Feltman, Kyle Hupfer, Curtis Painter, and Chris Lamb—Hartley acquired the 31-unit Save-On Liquors chain in 2018. The following year, seven stores were acquired, and in 2020 three acquisitions totaling 12 stores were added to the fold. But sadly, in 2021, tragedy struck, and Hartley passed away. After regrouping, the co-owners, along with Hartley’s wife, Gina, recommitted to his vision, and in 2022, another three stores were added. Last year, ILG acquired the six-unit Papa Joe’s Liquors chain. In most cases, the established brand names have been retained, but in a few instances stores were closed or rebranded to Noble Wine & Spirits, ILG’s own emerging brand. A massive 30,000-square-foot warehouse in Marion allows ILG to purchase in great quantities and deliver wine and spirits to its stores via a fleet of delivery vehicles. 

“The owners from whom we purchase the stores trust us with their legacies, and that’s why we’ve been so successful,” says Lamb, who serves as president and managing partner of ILG. In fact, more deals are in the works. At presstime, Lamb revealed that a few letters of intent to acquire were pending.

Out of the ownership group, Lamb is the only member with experience in beverage alcohol retailing, having spent about 12 years with Indianapolis-based 21st Amendment Wine & Spirits before joining ILG. During his tenure, he has been responsible for most of the buying and inventory at the chain and has played a role in the group’s acquisition spree. Upon Hartley’s death, Lamb was named president. “I’ve been involved in all aspects of the business,” he says. “My hands are in just about everything to make sure things are running smoothly.” 

For his role in helping to build one of the fastest growing liquor store operators in the country, Lamb has been named a 2024 Market Watch Leader. 

ILG carries 2,700 active spirits SKUs (spirits aisle above) ranging in price from $7-$1,000. Whiskey (pictured) accounts for a staggering 43% of spirits sales, with Bourbon leading the charge.
ILG carries 2,700 active spirits SKUs (spirits aisle above) ranging in price from $7-$1,000. Whiskey (pictured) accounts for a staggering 43% of spirits sales, with Bourbon leading the charge. (Photo by Erik Lubick)

Spirits Heavy

Founded just six years ago, ILG has quickly grown into a 59-unit liquor store group with sales revenue expected to exceed $85 million this year, making it the No. 2 liquor store operator in Indiana. Based in Carmel, the company comprises nine brands—many long established—with stores that range in size from less than 1,000 square feet to more than 6,000. The stores are located in 15 Indiana counties concentrated between Indianapolis and Fort Wayne, encompassing rural, farming, and suburban communities. Spirits and beer are the key categories for ILG—each accounting for 42% of sales—with wine far behind at 4%, and miscellaneous items accounting for the remainder. The company employs 250 workers. 

ILG carries 2,700 active spirits SKUs, priced from $7 a 750-ml. of Vitali vodka to $1,000 for Cincoro Extra Añejo Tequila. According to Lamb, Fireball ($15) is the top-selling spirits brand at the chain, with strong sales across all package sizes. Whisk(e)y is the leading category at the stores—accounting for 43% of spirits sales—driven by Bourbon, he says. “We do a lot with single-barrel selections as whisk(e)y drinkers continue to search for new and unique bottles,” Lamb notes. The single barrels are typically priced between $45-$100 and are branded as either ILG or Papa Joe’s barrel picks, a nod to the chain’s “big following” for the products, which even attract customers from Ohio, he says. After whisk(e)y, vodka comprises 19% of spirits sales at ILG, led by Tito’s ($33 a 1.75-liter), although budget vodkas, priced as low as $10 a 1.75-liter, also perform well. Among other segments, “we’ve seen the RTD market get flooded lately,” Lamb says. Still, High Noon ($19 an 8-pack of 12-ounce cans) remains the top-selling RTD.

Some 2,550 beer SKUs are offered, priced from $10 a 12-pack of 12-ounce cans of Miller High Life to $22 for Bell’s Two Hearted. Among brands, Modelo Especial and Corona Extra (both $20 a 12-pack of 12-ounce bottles) are “driving our non-domestic beer category and the total beer department for us,” Lamb says. “Beer is healthy at our stores because of Modelo. It just keeps growing.” At the other end of the pricing spectrum, budget beers like Busch Light and Keystone Light are seeing an uptick at the chain. “Busch Light 30-packs ($26) are one of our top-selling beer packages,” the retailer notes. Cold beer singles are also a significant contributor to category sales at ILG. With liquor stores in Indiana the only channel permitted to sell cold beer, the chain does a big business with 24-ounce singles at the hands of convenience stores. “They’re a way for customers to try new things and make for a quick and easy stop on their way home from work,” Lamb says. Depending on the size of the store, ILG shops feature between 8 and 22 cooler doors.

As in many other Indiana liquor stores, wine is a small category for ILG, with sales largely dominated by brands like Barefoot ($12 a 1.5-liter) and locally produced labels. “We’ve tried to see if higher priced wines would catch on in our small stores, but those customers keep reverting back to inexpensive wines,” Lamb says. But he’s determined to move the needle. Recently, the company has taken to featuring wines rated at 90 points and above in special sections. “Having scores and descriptions helps educate customers when staffing isn’t available to hand sell wines,” he notes. The approach already seems to be working. Year to date through May, wine sales at ILG were up 8%, Lamb says. Overall, the group lists about 1,000 wines, priced from $6 a 750-ml. of Sutter Home to $400 for Opus One.

ILG stores are a big destination for tobacco purchases, Lamb says, as in many of the communities where the stores are located, there are few tobacco or convenience stores. Others miscellaneous items carried at the stores include barware and snacks.

Beer does good business at ILG (the company’s Noble Wine & Spirits brand pictured), driven largely by names like Modelo and Corona. Stores feature up to 22 cooler doors, many of which house single-serve chilled cans as state law mandates they can only be sold in liquor stores.
Beer does good business at ILG (the company’s Noble Wine & Spirits brand pictured), driven largely by names like Modelo and Corona. Stores feature up to 22 cooler doors, many of which house single-serve chilled cans as state law mandates they can only be sold in liquor stores. (Photo by Erik Lubick)

Premiumization Focus

With seven stores (including three built from the ground up) and more planned, Noble Wine & Spirits is ILG’s upscale brand and a concept where Lamb and his partners see a lot of opportunity. “The stores are designed as higher end, to appeal to a more discerning clientele” than that of most ILG stores, the retailer explains. “Selection is larger and the offerings are more premium.” As a result, “the average ring is higher” than at other stores in the system. Usually among the largest shops in the ILG fold, Noble stores feature amenities like tasting bars, beer caves, cigar humidors, and 90-point wine walls. The focus on premiumization is already working; wine accounts for 22% of the concept’s sales, outperforming the company’s average. At press time, an eighth location in Noblesville was planned to open early next year.

To grow awareness of Noble and its sister stores, ILG occasionally invests in outdoor advertising. “When we acquire stores or open new ones, we’ll put up some billboards to direct traffic there,” Lamb says. Beyond that, the company relies on social media platforms like Facebook and Instagram to promote offers, as well as its 50,000-member strong VIP loyalty program. Through weekly emails, loyalty members are informed of special sales, in-store tastings, and other events. They also receive early notification on the release of allocated whiskies, Lamb says. For its part, ILG analyzes membership data to study buying behavior and to target special offers to members. “We’re more analytical than most stores in this market,” says the retailer.

ILG stores frequently host in-store tastings, such as the recent Captain Morgan Sliced RTD and Ketel One vodka and Filthy olives events. “Our supplier partners are willing to help with those,” Lamb explains. In addition, the company hosts an annual WhiskeyFest, featuring a live auction for coveted finds like Pappy Van Winkle. Proceeds from the festival, which typically attracts between 150 to 250 people, benefit Spirits for Smiles, a charity founded by Hartley that provides dental care for needy adults in the community. 

Lamb takes immense pride in ILG’s early success. “We started with 31 locations in 2018, and by the end of this year, we will have doubled in size,” he says. “We have nine brands under our umbrella, and we have pursued growth in the right way. We’re fair and respect what the sellers have done.”

The retailer concedes, however, that with a business model based on acquiring existing stores, “those opportunities are becoming fewer.” Moreover, others have noticed what ILG has accomplished, Lamb says, and the competition to acquire stores is heating up. Still, ILG remains committed to its strategy of acquiring small liquor stores. In fact, Lamb says, it’s widening its search. “We will look at opportunities outside of Indiana,” he reveals, “as this model has been a key to our success.”