The Trend of Expanded Consumer Access to Wine is Coming For Colorado

Local wine retailers aren't prepared due to an outdated ideology and the'll suffer for this.

One trend more than any other has defined the retail sales of wine since I began working in wine over 30 years ago: the ongoing expansion of consumer access to a wider variety of wine. This trend has never abated, has only accelerated and shows no signs of slowing.

Colorado wine and spirit retailers are looking this trend right in the face. Two questions could make their way onto the next Colorado ballot. One would allow grocery stores to sell wine and the other would lift the limit on the number of wine stores one entity may own.

Naturally, current Colorado wine store owners are distraught over this. They are saying it will put them out of business. And the fact is, if they don’t react by changing how they do business, these potential changes could indeed reduce their profitability and put some of them out of business. Fighting to maintain the restrictions these ballot measures would overturn is the wrong answer. But there is a response that will work:

INCREASE THE GEOGRAPHIC SIZE OF THE MARKET THEY SERVE FROM A FEW SQUARE MILES TO THE ENTIRE NATION.

There are really only two arguments the Colorado wine store owners have to make against the proposal to sell wine in grocery stores. The first is that consumers will lose out:

“Carolyn Joy [of Joy Wine & Spirits'] thinks allowing grocers to sell wine will make consumers worse off in the long run if they lose the selection and assistance available at independent liquor stores. Most supermarkets sell a vast array of items. Expecting to get wine advice from a supermarket employee is far-fetched according to Joy. “They've got, I don't know, 50,000 items to keep track of. There's no way they can help you.” Joy’s store employs 12 people who she describes as passionate about beer, wine and spirits.”

This argument simply has no legs and won’t work to convince anyone not to support easy access to wines. Convenience is more important than selection to 90% of wine drinkers.

The other argument amounts to “the big greedy grocery stores want to put all us little guys out of business.”:

“He [Mat Dinsmore of Wilbur’s Total Beverage] sees the current push for wine in grocery stores as just the latest in an ongoing effort by grocers to sell more and more types of alcohol. “They don't just want wine. They want it all: beer, wine, liquor — basically put all the independents out of business.”

The voting public has sympathy for the little guy. That makes this kind of “David vs Goliath” argument against wine in grocery stores slightly more effective. But you have to do some pretty serious demonization of the grocery stores that folks visit regularly and are dedicated to in order to sour those consumers on the very same places they visit multiple times a week and to which they have formed a bond.

Somewhere in the neighborhood of 35 states allow wine to be sold in grocery stores. There is no public safety reason for keeping wine out of grocery stores. There is no tax collection argument for denying wine retail licenses to grocery stores. There is only the inertia of the Repeal mentality that allows it to be forbidden in states like Colorado.

But, as I mentioned above, there is a response to the expanding access trend Colorado wine stores are staring in the face: Go national.

By my estimate from working with retailers who serve a national marketplace for a single location, upwards of $3 Billion in wine is being sold and shipped to consumers located nowhere near the store that sold them the wine. This figure is likely to double in the next ten years.

Younger buyers of wine and all other goods have been weened on the sound of cardboard boxes being ripped open. Buyers of high end wines have become accustomed to having retailers in far flung states ship them wine when they can’t find what they want at local stores. The number of new and different wines will continue to enter the market from both domestic and foreign sources in the coming years.

The future of the modern, progressive retailer (which is what an independent wine store must be today) is interstate shipments of wine. And this, rather than spending millions fighting against the ongoing trend of access to wine, is the response Colorado wine retailers must embrace.

The irony for Colorado wine retailers is that their very own state trade association opposes the direct shipment of wine. And it’s not a matter of Colorado retailers believing direct shipment or interstate shipment is inherently dangerous, nor that they believe retailers are incapable of shipping wine legally. They oppose direct shipment by retailers because it would require, logically, that they support it for their own state. This is competition they can’t abide.

One of the problems for retailers that align themselves with wholesalers and their arguments against direct shipment is that it puts them in a bind when ballot measures such at wine-in-grocery-stores come their way. Their ideological commitment to fenced-off state marketplaces and anti-consumer wine shipping laws will prevent them from embracing a willingness to engage in shipping and thereby saving their own stores after the grocery store wine initiative passes.