Chan Cox recalls reading a Market Watch article 15 or so years ago about how Martin’s Wine Cellar in Louisiana had transformed its business by adding a food service component. The potential to drive traffic and interest in Cox’s Wine World liquor stores by adding food sales “inspired me,” the Florida retailer says, especially since he had prior experience working in the on-premise business. All these years later, Cox hasn’t looked back. The northwest Florida business that he founded now includes four Wine World retail stores and seven on-premise venues: four Craft Bar units and three Wine Bar locations.
Cox says sales revenue is at $24 million, evenly split between the on- and off-premise sides. Beverage alcohol sales are a significant contributor at the company’s on-premise venues—which are located adjacent to or within the retail stores—accounting for about half of total sales at The Craft Bar and 40 percent of sales at The Wine Bar. At the liquor stores—which range in size from 3,500 to 8,000 square feet—wine leads the way, representing 49 percent of sales, followed by spirits at 32 percent, beer at 10 percent and miscellaneous items at 9 percent. Wine World, The Craft Bar and The Wine Bar employ about 240 workers.
Cox and his business partner Robert Montgomery opened the first Wine World in Destin, Florida, in 2000. With experience dating back to 1970 at a wine and spirits distributorship and as a liquor store and bar owner, Cox remains the operations executive while Montgomery, a commercial developer, works more behind the scenes. By 2005, they had opened three additional Wine World units, as well as a full-service Wine Bar restaurant at the flagship Destin location. In the last 10 years, the company has opened two more Wine Bars—one in Miramar Beach and one in the Watercolor community on State Road 30A in Santa Rosa Beach. In addition, since 2014 the company has opened four locations of The Craft Bar, a concept that focuses on spirits and draft beer.
The company’s clientele is a mix of local residents and vacationers who flock to Florida’s Emerald Coast. “All of our stores are located in beach communities” and are positioned near popular vacation resorts, explains Wine World business manager and nine-year company veteran Darren Moss. Spring and summer are the area’s big tourist seasons, bringing in affluent visitors from other areas of the Southeast and Texas to their vacation homes, he notes. Both Moss and Cox say that while they’re concerned that major retailers like Walmart will again seek licenses to sell spirits in their Florida stores following the veto of such a measure by Governor Rick Scott earlier this year, the company’s diversification into on-premise sales, as well as its knowledgeable sales staff, continues to set Wine World apart from other retailers.
Open-Minded Customers
Wine World stocks nearly 1,300 wine SKUs, priced from $5.99 a 750-ml. of the 2012 El Circo Tempranillo to $6,499 for the 2012 Domaine de la Romanée-Conti Romanée-Conti. “Wines retailing at $15 are where we get the most action,” Cox says. California wines, particularly Chardonnays like the 2015 Kendall-Jackson Vintners Reserve ($11.98), 2015 Sonoma-Cutrer Russian River ($26.99) and 2015 Rombauer ($39.99), are big sellers. But the retailer says he’s increasingly finding that when it comes to wine, his customers—especially millennials—are open-minded and interested in trying different things. Wine World also sources wines direct from small wineries. The 2014 Ideology Cellars Blondie Chardonnay ($19.99) has emerged as one of the chain’s top-selling wines. Overall, Wine World is known for its service. “That’s where we work very hard,” Cox says.
The stores offer more than 1,100 spirits SKUs, ranging from $7.99 a 750-ml. of Taaka vodka to $2,800 for Louis XIII de Rémy Martin Cognac. Cox says premium spirits are particularly strong at Wine World and that the premiumization trend reminds him of the wine movement 25 to 30 years ago. Tito’s vodka ($33 a 1.75-liter) is among the chain’s top-selling spirits, while Bourbon and other whiskies are soaring. “We sell a lot of Woodford Reserve because it’s a good Bourbon for $33 a 750-ml.,” says Shaun Brown, general manager at Wine World in Sandestin. Among other whiskies, Brown says The Macallan 12-year-old ($60 a 750-ml.), Crown Royal ($39 a 1.75-liter) and Jameson Black Barrel ($37 a 750-ml.) perform well. “With the growing mixology trend, we stock a good selection of bitters and vermouths, things you won’t find in other stores,” Brown adds, pointing to labels like Cynar Ricetta Originale amaro ($38 a 750-ml.).
Wine World features more than 1,500 beer SKUs, priced from 99 cents a 12-ounce bottle of Red Stripe to $43 a 750-ml. of De Struise Brouwers Black Damnation. “We like to stock our space predominantly with craft beer,” says Brown, noting that the chain’s best-selling craft brew is M.I.A. Mega Mix pale ale ($12 a six-pack of 12-ounce cans). He adds that IPAs are strong performers, along with canned goses and Berliner weisses, as “those beers drink well on the beach.”
On- And Off-Site Support
To promote its product selection, Wine World creates its own merchandising materials in house. “We’re really big on having ratings on all of our wines and even our spirits now,” says Moss. “It’s a great tool for us.” The stores also frequently cross-merchandise non-alcoholic items like cheeses, as well as wine and bar accessories, with wine and spirits. And weekly in-store beer and wine tastings—typically led by a staff member—are offered, as are occasional wine dinners, held in the wine cellar at the flagship location.
Wine World’s premiere event is the annual South Walton Beaches Wine & Food Festival, held in the spring. The retailer is a founding partner of the four-day event, which features hundreds of wines, spirits and beers paired with foods prepared by local eateries, as well as educational sessions and appearances by celebrity winemakers, brewers and chefs. The festival’s Destin Charity Wine Auction—with proceeds aiding children’s charities in northwest Florida—has emerged as one of the top charity wine auctions in the country, according to Wine Spectator. “This past year, we raised about $2.7 million,” says Cox. “It’s changed the lives of children in our area.”
The chain embraces both traditional and digital marketing support. According to Moss, Wine World runs both newspaper and Internet ads, engages on social media platforms like Facebook and Twitter, and alerts up to 20,000 customers about specials via targeted email blasts.
On-Premise Force
The company’s on-premise venues vary in design. The three Wine Bars are integrated into the retail space of Wine World stores and feature open kitchens with seating that is set back from the sales area. Meanwhile, the Craft Bars are located in separate spaces from the retail stores, but in the same buildings. “We sell tons of international wines at the Wine Bars,” says restaurant operations manager Nathan Bonstell. The Wine Bars feature 45 wines by the glass ($6 to $25 a 5-ounce pour) and bottle ($20 to $60), while wines can also be purchased off the shelves for a corkage fee.
The Craft Bars, meanwhile, focus on craft beer and spirits. According to Bonstell, they typically stock about 150 spirits SKUs, with cocktails and craft spirits pours ranging in price from $7 to $50. The Craft Bars also promote 30 rotating draft beers, priced from $5 to $20 for 10- to 16-ounce pours. “We sell a lot of Bourbon and a lot of Florida beers,” remarks Todd Schrag, general manager at the Craft Bar in Destin. He adds that “gin is making a comeback” and is a perfect fit for Florida’s warm climate.
“While they attract different demographics, both The Wine Bar and The Craft Bar feed retail,” Cox says of his hybrid businesses. “Two months after opening our first Craft Bar, a manager said to me, ‘I can’t believe all these new faces that I’m seeing in retail.’” Still, he concedes the varied ventures come with their challenges. “They’re completely different businesses and require different skills,” Cox explains. But, he adds, “It’s worth it. Chains battling it out to see who can be the lowest on price dominate today’s retail business. Instead, we’re selling an experience, and it’s working.”
Cox and his team are now preparing for the company’s next round of growth. A year ago Wine World’s e-commerce site went live, offering all the wine and spirits that are sold in the stores. Results have been positive so far, according to ecommerce manager Katie Wise, with orders averaging in excess of $200. “We encourage purchasing by the case as we offer free shipping for any orders over $150,” she notes. But they’ve only just begun to scratch the surface. Wise says total online sales are dominated by wine and represent just a low-single-digit percentage of the business, but Cox’s long-term goal is for e-commerce to represent half of sales. The company is also readying a loyalty program for retail, restaurant and online customers.
Closing in on 50 years in the beverage alcohol business, Cox has no plans to slow down. By year-end, a new Craft Bar is planned to open in Fort Walton Beach, while a major project in Pensacola is slated to break ground which will result in the opening of a new Wine World, Wine Bar and Craft Bar in late 2018. “There’s a lot of growth expected in these resort areas,” Cox explains. “We’re certainly interested in that growth and opportunity.”