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Local Craft Bars and Craft Distillers Look to Capitalize on Privatization of Liquor Sales

The privatization of liquor sales has potentially created growth for local craft bars and distilleries.

 

With liquor sales in Washington state now privatized as of Friday, June 1, local distributors will be jockeying for a piece of the estimated $1.5 billion Washington state liquor business.

Young’s Market and Southern Wine & Spirits dominate the private liquor distribution business, accounting for over 90 percent of all the liquor sold in the state according to Joel Benoleil, senior vice president and chief legal officer at Issaquah-based Costco.

John Euding, craft spirits manager at Click Wholesale Distributing based in Kent, estimates that the two mega giants of liquor distribution account for up to 95 percent of all liquor sold in the state.

Much of the liquor distributed by Young’s Market and Southern Wine & Spirits are large staple brands sold at warehouse retailers such as Costco and grocery store chains such as QFC, Safeway and Albertsons.

That leaves dozens of other distributors, including Click, scrambling for just five percent of the liquor sales pie. Many local distributors are focusing their limited resources to appeal to the craft cocktail bars, such as , and , all in Bellevue.

Many small to medium distributors have had some success selling to locally based grocery chains such as Thriftway, Metropolitan Market and Town & Country, and specialty retailers such as Esquin Wine Merchants and Wine World & Spirits.

“The liquor that our portfolio carries is the sort of liquor that the bartenders that are making the craft cocktails want,” said Theresa Slechta, a sales representative for Vinum Wine Importing who sells to in Bellevue, Lot No. 3 and all three Purple locations on the Eastside, Bellevue, Kirkland and Woodinville.

Click Wholesale Distributing and Seattle-based Vinum Wine Importing, owned by Redmond resident Mike de Maar, hired bartending veterans specializing in craft cocktails with Bellevue ties to build their liquor portfolios.

Euding, formerly of and Barrio in Bellevue, and , was hired by Click this past winter. Vinum hired Andrew Bohrer, former bar manager at Naga and Mistral Kitchen in Seattle.

“We knew he was going to create a portfolio he was going to be proud to serve at his bar,” said Slechta, who used to sell wine to Bohrer when he was in charge of the bar at Mistral Kitchen.

Euding and Bohrer are well regarded among their former bartending colleagues giving Click and Vinum credibility with their new prospective vendors and saving months and years of cultivating clients.

Local distributors have taken on local liquor producers, many of them tiny start-ups that would be overlooked in the giant portfolios such as Young’s Market and Southern Wine & Spirits’.

“I think it’s definitely doing things the hard way by building brands that don’t have a lot of traction that haven’t had a lot of sales in this state, yet,” Euding said. “We sell products we want to sell. We sell brands we like and we enjoy doing it.”

Click’s portfolio includes Woodinville-based Project V Distillery and Woodinville Whiskey Co., Redmond-based Soft Tail Spirits and Seattle-based Brovo Spirits.

Vinum represents Woodinville’s Pacific Distillery (producers of Pacifique Absinthe and Voyager Gin), Novo Fogo Cachaca imported by Bellevue’s Dragos and Emily Axinte, and Seattle’s Sun Liquor, Scrappy’s Bitters and Sound Spirits (producers of vodka, gin, aquavit, Old Tom Gin and herbal liqueurs).   

“Our main focus is local brands,” Euding said. “We keep pretty close relationships with the local distillers. We’ve seen the popularity of craft cocktails rise. I think we can do the same with spirits. Hopefully, our local book will grow some more.

“Liquor sale privatization is really going to help speed up the rise of craft distilleries.”

Many in the bar and restaurant industry agree that the full impact of the privatization of liquor sales won’t be felt for a while.

David Chou, bar manager at in Bellevue, said changes at his restaurant will be gradual. Chou said it will be another three months before John Howie Steak exhausts its liquor inventory bought during the rush of .

“We haven’t really changed our prices much. We’ll have a better sense in three months,” Chou said. “They are going to start going up incrementally. We are not talking major. It will probably be a dollar here and a dollar there.”

Euding is more vague.

“It’s a lot of guesswork,” he said. “This is the biggest change for any state as far as liquor sales goes since prohibition. Nobody knows how it’s going to unfold.”

jimu June 11, 2012 at 12:59 AM
The neighborhood grocery stores simply can't compete with the major chains when it comes to selling the major brands of alcohol. This is how they level the playing field, by selling local brands that they can still keep their markups on. It's funny that the anti-1183 crowd said the small distilleries would go out of business with privatization. Looks like that, along with children having unlimited access, were just more scare tactics from the distributor funded "no" side. By the way, I highly recommend both Woodinville and Rogue whiskeys.

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