Few people understand the evolution of business and the necessity for welcoming change as much as the team behind Stew Leonard’s. What started in the 1920s as a dairy home delivery service has evolved many times to become what it is today—a Northeastern retail powerhouse that includes grocery stores and large-format wines and spirits shops. Even as the company has grown and changed tremendously over nearly a century, it remains a family-run business, which the Leonards say is a key to its success.
The company’s beverage alcohol component, Stew Leonard’s Wines & Spirits, was founded in 1999 and now comprises nine independently owned and operated stores in Connecticut, New York and New Jersey. Annual revenue for the beverage alcohol outlets tops $100 million a year and is complemented by $400 million in earnings from the six Stew Leonard’s supermarkets in Connecticut and New York. Stew Leonard Jr., a 2010 Market Watch Leader and winner of the 2015 Leaders Alumni Award for “Best Merchandising,” helms the organization today and admits to often consulting with his father, the namesake and founder of Stew Leonard’s grocery stores. Leonard’s four daughters grew up in the retail stores and in the wine industry. Blake Leonard, his oldest daughter and a certified sommelier, joined the family business in 2016 and now serves as brand manager for Stew Leonard’s Wines & Spirits.
Being mindful of the company’s storied history while embracing modern practices and new technologies allows the Stew Leonard’s retail empire to thrive. The involvement of so many family members in the business also adds a warm and inviting culture that can’t be fabricated. For his commitment to the business and his willingness to embrace change and modernization, Stew Leonard Jr. has been named the 2017 Market Watch Leaders Retailer of the Year.
“The wine business matches up with the food business perfectly,” Leonard says, adding that the impetus to launch the wine and spirits shops with several family members in the 1990s came from many of his grocery customers asking for beverage recommendations to complement their food purchases. The first Stew Leonard’s Wines & Spirits store opened in Yonkers, New York, in 1999 and Leonard says it was an instant success. Today, that one location does nearly $20 million a year in sales. “My grandfather, who started the dairy business, is probably looking down on us today and saying, ‘I can’t believe you sell more wine than milk,’” Leonard jokes. “But the business has transformed itself. From a personal standpoint, I’m so proud that I get to work with my daughter every day. It’s become a real family affair.”
Inner Circle
Leonard is committed to putting his family members in leadership roles within his business. For legal and licensing reasons, the Stew Leonard’s grocery company is kept separate from the wine and spirits business and most of the beverage stores are managed by separate owners. Leonard oversees single stores in Connecticut and New York and two stores in New Jersey. His sisters, Beth Hollis and Jill Tavello, each own a New York location, while his brother, Tom Leonard, has a family trust that owns the Springfield, New Jersey unit. Leonard’s wife, Kim Leonard, is a Certified Specialist of Wine and works in the Norwalk, Connecticut, wine and spirits store.
“The most important thing in any company is its culture,” Leonard says. “Family involvement perpetuates culture, gives the business more fabric and personality, and is more caring. There’s real pride in the family business.”
The Leonard family’s roots date back to dairy farming in the 1600s. In 1924, Leonard’s grandfather started home milk delivery service, and in 1969 his father opened his first small grocery, which sold the family’s milk and a handful of other products. That small store grew tremendously over the next decade. Leonard became president of the company in 1987 and worked with Tom to open the company’s first modern-day grocery in 1991 in Danbury, Connecticut. In 1999, Leonard and Beth launched the first wine and spirits store in Yonkers, New York. Leonard admits that his family knew little about the wine business when they ventured into beverage retailing, and he credits importers Marc and David Taub of Palm Bay International with helping to get the project off the ground. The Bonavita family, who worked in wine importing and distributing, also assisted the first store in gaining traction and using proper merchandising.
“The No.-1 question we were always asked was, ‘Hey, I love this lobster or filet mignon, but what wine do I serve with it?’” Leonard recalls. “We’ve always been in the food business, and food and wine go together. We rounded off our family business by being able to offer our customers not only great farm-fresh food, but also great wines they can serve with the meal. The wine shops make our business feel whole. Now, we sell everything that’s on your dinner table.”
The family’s next generation is getting ready to make its mark, too. Blake, who used to stock the wine stores’ shelves as a teenager, is already involved, and one of her sisters has expressed interest as well. After graduating from college, Blake worked in several facets of the wine industry before returning to Stew Leonard’s. “Coming back to the family business was a huge decision, but I didn’t hesitate in the slightest bit,” she says. “As a young, female member of the next generation, I’m excited to help bring our family business to the next level. My big focus now is on e-commerce and digital platforms. It’s a pivotal time for us to evaluate our business and how we can market to customers in the best possible way.”
Modern Evolution
Blake has been integral in helping Stew Leonard’s embrace and implement modern technologies. Since joining the business last year, she has revamped the company’s website, Stewswines.com, and launched a service that allows customers to place orders online and pick them up in the stores. Each unit has its own website, making it easier for customers to have their purchases delivered within the local market. “The e-commerce side is growing and did really well during the holidays last year,” Blake says. “Shipping has definitely been a challenge, and we’d love to build that part of the business. Right now, our focus is more on bringing convenience to the customers in our shopping areas versus trying to get new customers from elsewhere.”
Leonard estimates that roughly half of each store’s advertising budget is spent on flyers and newspaper inserts, but he expects that percentage to shift significantly in the near future as Stew Leonard’s turns to more digital and mobile advertising executions aimed at broadening its reach. The company is also expanding its events roster to add more consumer-friendly tastings and increase foot traffic. Its Taste of New York wine event, which features wines from Long Island and Upstate producers, now includes six dates each year, and the spring 2017 tasting in Farmingdale, New York, netted 1,000 attendees. These large-scale tastings are complemented by smaller, weekly in-store events, which have also been well received.
Keeping customers happy has always been important for Stew Leonard’s, both in the grocery and beverage stores. The company puts a major focus on staff training and provides all employees with a multifaceted program that includes entry- and upper-level classes on wine, spirits and beer. Leonard says about 20 percent of his beverage store staff has been credentialed by various certified wine groups.
Wine makes up 60 percent of total sales at Stew Leonard’s Wines & Spirits. Leonard notes that spirits and beer have taken a few percentage points away from wine in the last couple years. Surging sales of Bourbon and other whiskies, as well as craft beer and growlers, have contributed to that shift and helped grow the overall beverage business. The stores, which range from 6,600 to 13,000 square feet and carry anywhere from 2,800 to 3,800 SKUs, boast upscale lighting, hardwood floors and custom display racks with hand-painted signage that set them apart from the supermarket spaces. In some shopping centers, the food and beverage stores are next to each other, while in others they’re nearby but not adjacent.
The wine and spirits shops stock as many as 2,200 wine SKUs. Rosés and large-format bottlings have been popular this year, and Blake says that varietals like Pinot Grigio, Cabernet Sauvignon and Chardonnay also consistently perform well. The stores highlight 90-plus rated wines and high-quality labels priced less than $20 to $30 a 750-ml. in special display areas. The company’s top-selling wines include its private-label Santa Giada Pinot Grigio ($11.99 a 750-ml.), Kendall-Jackson Chardonnay ($11.99) and Château d’Esclans Whispering Angel rosé ($20).
“Regardless of how much wine knowledge you have, it can be overwhelming to shop for wine,” Blake says. “We have, on average, 1,900 to 2,200 wine SKUs in our stores. One of the things we want to do with our different types of racks is sub-categorize the selections and reinforce the great brands to make it easier for customers.”
Expanding Spirits And Beer
Spirits comprise 30 percent of total revenue at Stew Leonard’s Wines & Spirits, while beer contributes 10 percent. Bourbons and whiskies remain strong, especially smaller and more allocated labels, and Blake says domestic vodkas are also moving fast. Leonard adds that Tequila and mezcal are garnering increased interest from consumers as well. The stores stock 600 to 800 spirits SKUs per location, with top-sellers including Tito’s Handmade vodka ($28.99 a 1.75-liter), Absolut vodka ($26.99) and Johnnie Walker Black label Scotch ($62).
Craft beers, especially locally produced brands and special releases, have an ardent following at Stew Leonard’s Wines & Spirits. The stores, which stock 500 to 900 beer SKUs, embrace the rising interest in canned beer and are also experimenting with growlers in New York. The Empire State doesn’t allow wine and spirits shops to sell beer, but grocery stores can, so the Stew Leonard’s supermarkets in Farmingdale and Yonkers now house growler stations, and Leonard says they’re very popular. Beers from Yonkers Brewing Co. and Greenpoint Beer and Ale do well in New York, while labels from Two Roads Brewing Co. and Thomas Hooker Brewing Co. move fast in Connecticut and selections from Forgotten Boardwalk Brewing and Flying Fish Brewing Co. excel in New Jersey.
“We started with such a big focus on wine, and wine is still the biggest driver for our overall sales,” Blake says. “But beer and spirits are
really starting to grow. The challenge for us is learning how we can better serve our customers who are choosing beer over wine today or who are choosing different types of spirits. We’re a great place for letting new local brands grow.”
The stores are also experimenting with upscale foods in the wine and spirits shops. While New York doesn’t allow liquor stores to sell food, Connecticut beverage stores may stock cheeses and New Jersey outlets can sell a wide range of products. Stew Leonard’s doesn’t operate any grocery stores in New Jersey, but its three wine and spirits shops in the Garden State offer a selection of imported Italian foods that complement wine, as well as snacks like cheese, olives, crackers and gourmet chocolates.
“We want to make it easy and less intimidating for customers to shop wine and spirits,” Leonard says. “We try to create destination stores so people want to come here. We want to make it exciting for our guests to come to Stew’s. We don’t have everything, but we try to take the guesswork out of shopping for you. We find the best products and put them on the shelves and we’re very price-competitive. Business is going really well, and we’re happy. We feel good about the wine business right now, and about spirits and Bourbon and craft beer. We feel good about everything.”