Retail alcohol sales spike in state
Terry Rogers has never had much trouble generating demand for her Harbor Point Wines & Spirits store in Stamford’s South End. But in her two years running the shop she has not seen an influx of customers like the one she’s had in the past few weeks.
The coronavirus pandemic has sparked a surge in sales for alcohol retailers and producers across the state. Mandates that have ruled out drinking at restaurants and bars have not stopped people from imbibing.
Deemed an “essential business,” alcohol retailers have had to respond quickly to the jump in at-home consumption.
“This has forced a lot more people to see us and get to know us,” Rogers said. “There are more people who’ve became aware of us in buildings up Washington Boulevard and further, and from other parts of Stamford and Darien. And they’ve got the time now to wander down, get in their cars and take a look.”
Major changes
In the third week of March, alcoholic beverage sales soared 55 percent from the same time a year ago, according to the Nielsen research firm. That week, many states including Connecticut instituted orders that temporarily banned sit-down dining and drinking at restaurants and bars as part of social-distancing efforts to reduce the virus’ spread.
Compared with MarchApril 2019, the Stew Leonard’s Wines & Spirits chain has seen its alcohol sales spike 50 percent. Fueling that surge are curbside pickups and deliveries, which now comprise 30 percent of its business.
The crisis has also reshaped how producers operate.
Norwalk-based SoNo 1420 American Craft Distillers had to temporarily shut down its tasting room. The venue had generated through tours and bottle sales about 50 percent of its revenues.
But it has managed to boost sales to restaurants by 50 percent since the crisis started, owner Ted Dumbauld said. As a part of their take-out business, many restaurants are offering “cocktail kits” that include spirits bottles, mixers and garnishes.
SoNo 1420, like other distillers, has also moved into hand-sanitizer production, with a certain amount donated to first responders, health care professionals and nonprofits.
“We don’t have the distribution capabilities to deliver to all of these organizations and individuals, so we offer curbside pickup,” Dumbauld said. “People have been very generous and have been purchasing our spirits when they come to our distillery to get hand sanitizer. As a result, our tasting-room sales have been flat to down a little, although the mix is 100 percent retail sales of our spirits since we can’t do tours.”
Before the pandemic emerged, Stamford-based Half Full Brewery generated about 75 percent of its retail business from sales of beers to customers in its tasting room.
That share has plummeted to zero until the state restrictions are lifted. But the brewery is now growing its retail sales by two to three times through its new pickup and delivery services as its customers drink more at home, according to Half Full founder and Chief Hoptimist Conor Horrigan.
“Pickup and delivery have a much higher cost margin, so it basically offsets our lost on-premise business,” Horrigan said.
Since the crisis started, Stamford-based Deutsch Family Wine & Spirits has seen sales decline across 28 of its 31 brands — reflecting a drop-off in business from restaurants and bars. But the combined retail growth of its top-selling trio of Yellow Tail, Josh Cellars and Layer Cake has more than made up for the lost sales from dining establishments, according to Deutsch President Tom Steffanci.
The company is also benefiting from a major uptick in online sales through home-delivery platforms like Drizly Instacart, wine.com and other retail websites.
“In the case of Josh Cellars, the increases have been dramatic — around 60 percent growth (since the start of the crisis),” Steffanci said. “We are seeing a similar trend with competitors, as the best-known brands do seem to be experiencing disproportionate growth as consumers choose brands that they trust the most.”
Adapting to new reality
Alcohol retailers and producers have accepted that they likely will deal with fluctuations in consumption for the foreseeable future.
Stephen Downes, president of the Middletownbased Connecticut Package Stores Association, said the initial sales peak could have been fueled in part by a false rumor that Gov. Ned Lamont was going to include liquor retailers in the list of nonessential businesses that had to close.
A slowdown could follow, he said.
“A lot of people stocked up because of that and it will be interesting to see how long it will take people to work their way through that stash,” said Downes, who is also owner of Connecticut Beverage Mart, which has stores in Middletown, Newington and Wallingford. “For whatever reason, business has leveled off since then, and we’re expecting that it might decrease even further as we get into May and June. There are a lot of events like graduation parties, weddings and Memorial Day events for which people buy liquor, and now those events aren’t going to be held.”
Supply-chain challenges also loom.
Deutsch has seen glass producers shut temporarily because of virus outbreaks among workers and related problems. But so far, the industry has managed to avoid major interruptions and keep supplying distributors.
“The supply chain is fragile but from what we see right now, we’re confident that we can maintain supply,” Steffanci said. “We are very grateful to our own people, our distributors and retailer partners who are truly on the front lines ensuring our products stay on shelves and are available for consumers to buy in stores and online. That is no small feat in this environment.”
Stew Leonard’s distributors are well-stocked, “but we are seeing that deliveries are arriving less frequently to our stores,” said company spokeswoman Meghan Bell. “We’re still getting in product, but just not as quickly as we were in the past.”
‘Work harder’
Increaded digital outreach has become vital for retailers to engage with customers. Rogers now holds weekly wine classes on Zoom, and Stew Leonard’s is also using the platform for “virtual wine tastings.”
“Any essential business that has restrictions really needs to work a lot harder and come up with creative ways,” Rogers said. “People from around the country have come on through Zoom because we have winemakers from California calling in, so I get to ask questions and do interviews. That makes an exciting evening for them.”
The crisis has encouraged businesses to pursue other new ventures.
Half Full is releasing this week a hard coffee called Rise & Grind, which it created with Rise Brewing Co. At the same time, it is launching an apparel line, for which it is collaborating with the 203. Next month, it is releasing a hard seltzer line called Coast.
“As the founder of a company named Half Full and with a title like chief hoptimist, my outlook is always positive,” Horrigan said. “The key to survival for any person or business in times like these is to remain upbeat, scrappy and collaborative. So, we are doing what we do best to navigate whatever is ahead by collaborating with others in our community to do exciting things.”