The retail market for wine, beer and spirits in Madison, Wisconsin, has changed dramatically in the last generation. In the 1950s, liquor stores didn’t face the same competition from supermarkets, convenience stores and big-box players that they do today. But while numerous liquor stores in the region have been forced to change hands or shutter due to the increased competition, Steve’s Wine, Beer and Spirits retains ties to the family that founded it more than 60 years ago, while continued support from its loyal customers has enabled the company to expand into a three-store concept.
“We became more streamlined and focused in our operation,” explains Joe Varese, partner and son of founder Steve Varese. “As the laws changed and grocery and convenience stores started selling alcohol, we began emphasizing wine and quality customer service. We got to a point where other retailers weren’t doing things the way we were.”
Steve Varese debuted his first liquor store in 1953 on Madison’s University Avenue, the main thoroughfare that connects the capital city to suburban Middleton. A second location on Madison’s Junction Road launched about 17 years later, while the newest store opened in 2012 on McKee Road in nearby Fitchburg. Joe Varese joined the family business in 1980.
Today, Steve’s is one of the leading independent liquor store chains in Madison, with a deep product selection, competitive pricing and stellar customer service. In addition to Joe Varese, partners include Wayne Crokus, his son-in-law and manager of the University store; Karen Eigenberger, manager of the Junction location; and Randy Wautlet, manager of the McKee unit. The outlets range in size from 3,000 square feet at Junction to 5,000 square feet at McKee, with University spanning 4,000 square feet. The sales mix varies by store, but both the University and Junction locations skew toward wine. Sales at the McKee unit are evenly split between wine, spirits and beer. The company declined to disclose sales revenue.
Unique Wine Offerings
Steve’s offers up to 3,000 wine SKUs at its various locations, generally priced from about $6.49 a 750-ml. of 2012 Wishing Tree Shiraz to $1,000 for 1990 Château d’Yquem. The chain’s top-selling wine is Wisconsin’s own Wollersheim Seyval Blanc ($10.99). Crokus—who joined the company full time eight years ago—says wines priced between $8.99 and $16.99 are the sweet spot at his store, with red blends and sparklers performing particularly well. The McKee unit stocks a vast selection of wines from Germany and Austria while the Junction location focuses on little-known, good-value wines, such as Domaine Coston ($8.99 a 750-ml.) from Languedoc-Roussillon. “We try to specialize in what others don’t,” explains Eigenberger, who began working at Steve’s 24 years ago.
The spirits selection ranges from about 1,000 SKUs at the University store to 2,500 SKUs at McKee. Prices typically start at $6.99 for a 750-ml. of Fleischmann’s vodka and top out around $1,000 for Laphroaig 32-year-old single malt Scotch, according to University spirits buyer Bong Wong.
Korbel brandy—whose leading market is Wisconsin—is the chain’s top-selling spirits offering, priced at $21.99 a 1.75-liter. Whisk(e)y and rye are strong performers, while growing interest in classic cocktails like Manhattans and Negronis are driving sales of vermouths, bitters and other mixers. “We’re getting younger shoppers, who love cocktails,” says Wong, a 19-year veteran of Steve’s. “I’m selling a lot of Campari.” He adds that local craft spirits like Death’s Door gin ($26.99 a 750-ml.) from nearby Middleton are also performing well.
Steve’s offers between 1,000 and 2,000 beer SKUs, generally priced from $5.99 a six-pack up to $19.99 for a four-pack of 11.2-ounce bottles of St. Bernardus Abt 12. “Our beer selection is growing so fast,” Eigenberger says. “We bring in between five to 20 new beers a week.” Craft beers—particularly those that are produced locally—are surging at the chain, with New Glarus Brewing Co.’s Spotted Cow ($8.49 a six-pack) as the top-seller. “It’s such a blessing to be in a region where there’s good local beer,” says Crokus, though he notes the constant juggling act when it comes to shelf space. The University store devotes 23 cooler doors to beer. Steve’s also offers miscellaneous items, including gift baskets, meats, cheeses, pickles, olives, chocolates and cigars.
Battle For Customers
The customer base at Steve’s varies by location. The University store attracts Downtown workers and clientele from the University of Wisconsin. The Junction and McKee units, meanwhile, draw traffic from nearby corporations and business districts. The company strives to retain its customer base while attracting new shoppers in a very competitive marketplace. “You can buy wine, beer and spirits in a lot of places in Madison,” Crokus explains. Grocery stores, a convenience store and the local Target all sell beer, wine and spirits.
In addition to offering a vast array of unique products, Steve’s relies on clever merchandising to attract customers. The stores frequently hold tastings of wine, beer and spirits—some complimentary and others requiring a fee. Last year, the University unit was renovated to allow for a tasting room, where in-depth seminars on such topics as red blends and Scotch whisky are now offered for $10 to $20 a person. The unit also added a beer Crowler station, offering six different draft brews for carryout in 32-ounce Crowler cans, generally priced from $5 to $18.
Crokus explains that Steve’s tries to take a direct approach to marketing and advertising. “We don’t have a big presence on radio or TV,” he says. Instead, the chain relies on email marketing and social media. Its Facebook and Twitter sites tout new product arrivals and in-store events. Steve’s also tries to steer clear of “download and print” p-o-s materials, Crokus says. Rather, employees create handwritten in-store signage. “We don’t do a lot of 50-case displays with cardboard cutouts,” he explains. “We try to be our own best cross-merchandisers, simply by having a conversation with our customers. We love it when people say, ‘We’re having X for dinner. What do I pair it with?’”
Serving The Customer
Each of Steve’s partners counts the chain’s 30 employees as the company’s most valuable assets. “When we hire people, we don’t do it casually,” Varese says. “Everyone who works for us plays a major role in our success.” The three store managers say that they and their staff delight in helping customers find the right products. “Our employees are educated and relate well to the customers,” Eigenberger says. The partners are particularly thrilled when patrons express their continued satisfaction with the selection, prices and customer service at Steve’s. “When someone comes in and says we were able to add to their event, meal or gathering, it makes us feel good about what we’re doing,” Crokus explains.
There are no current plans for expansion, although Varese believes there’s potential for a fourth store in the Madison area. In any event, the partners vow that they won’t be complacent. When it comes to future growth, “We’ll continue to do what has always worked for us in the past,” Wautlet says. “We’ll remain aware of the trends and we’ll do what no one else is doing.”
Crokus adds that the new tasting room and Crowler station at the University store were worthy investments. And as he and his partners look to the future, they’ll consider moves that enhance the role Steve’s already plays in the Madison marketplace. “We’ll always try to maximize the experience for our shoppers and seek to attract new customers,” Crokus says. “In this business, you have to constantly evolve.”