Yankee Doodle Dandy

In the modern age of retail specialization, wine, beer and spirits shops are sprouting up for every potential customer and all tastes. There are beer barns stocking unique brews from all over the world; wine shops that seek out only small production Italian vintages, or where the category is promoted as fun and festive; and clubby liquor stores where malt geeks can count on finding the latest obscure whiskey from Scotland and Kentucky.

In these times, few stores still try to do it all, but in Massachusetts, at least three major retail outlets are well known for meeting every beverage alcohol need of even the fussiest shopper. Yankee Spirits, now a three-store chain with units in South Attleboro, Sturbridge and Swansea, in fact, does a lot of everything, and that’€™s one of the reasons the company is Beverage Dynamics’€™ Retailer of the Year for 2009.

Plenty of stores as big as Yankee Spirits give short shrift to one category or another, and some are content to focus mostly on wine and simply fill their spirit shelves with large format bottles of the best-selling liquors. Not Yankee. With a little more than 35% of their dollars today coming from wine, just over 35% from spirits and almost 20% from beer (food and gift baskets account for about 10%), their business is spread around, and all categories get their due.

And while internal surveys and anecdotal reports from staff have convinced president and ceo Michael Cimini that price is definitely the number one reason Yankee Spirits is one of the most successful beverage alcohol superstores in the East, customers find selection almost as important.

Take a look at what one recent visitor to the Yankee Spirits’€™ Sturbridge store had to say on the beer lover website Beeradvocate.com (which gives Yankee and overall ‘€œA’€ rating): ‘€œThis [store] impressed me as being one of the most well organized and easy to navigate, and I don’€™t know any others that would beat the volume of choices seen here. Not much clutter but packed to the gills with micros and imports of many kinds along with all the usual macros, vast wine selection, liquor and assorted other goodies and accessories. New England micros are particularly well represented, but there was a decent showing from Colorado and California to name a few.’€

Other consumer social review sites give the stores equally glowing reviews. Here’€™s what one posting had to say at Yelp.com, for instance, ‘€œYankee Spirits’€¦has a stellar liquor and wine selection with lots of specials, discounted prices, a friendly staff, and tons of cards toting recommendations. I picked up an AMAZZZING Viognier for about 10 bucks.’€

It’€™s the kind of social feedback and word-of-mouth that makes most marketers salivate, and the sort of customer loyalty it exemplifies is one of the reasons Yankee has been able to do well and even expand: the company just opened a 28,000 square foot store last June in Swansea in southeastern Massachusetts near the Rhode Island border, about 20 miles south of the 26,500 square foot South Attleboro store. Their location in Sturbridge, about an hour west near the Connecticut border in south central Massachusetts, measures 30,000 square feet and is the largest beverage alcohol store in New England.

While the stores are similar in size, they differ slightly in category performance; Sturbridge is more fine wine-focused, while South Attleboro is a more spirits-centric store. In its first year, the average dollar ring in the Swansea store more resembles South Attleboro. ‘€œWe think that the South Shore/Providence area has one demographic, while the Sturbridge area, which draws from northern Connecticut and central MA, has one that’€™s different,’€ said Cimini.

Great Prices, Selection and Service

Making sure their large format stores offers a broad selection at great prices is the philosophy of Yankee Spirits, said Cimini, who heads up the company as president and chief executive officer. (He personally owns the Sturbridge and Attleboro units, while his father and former company chief operating officer Don Cimini owns the Swansea store. Yankee Spirits manages and operates all three.)

After price and selection, Yankee’€™s commitment to service is most important, noted Cimini. ‘€œOne of the things were very proud of and really try to do well is to educate our floor staff. Our wine department is not unique in that way, but we also have an educated beer department, and we educate them on spirits as well, which not very many stores do at all.’€

Using objective supplier-provided training programs has helped bring staff up to speed on the world of spirits, and Yankee encourages employees to taste all the different products, especially new ones, that they can. ‘€œI haven’€™t worked the floor in a number of years, but I know it was always easier to say, ‘€˜I’€™ve tried this and it’€™s really good,’€™ rather than, ‘€˜I’€™ve read about it and it’€™s supposed to taste this way.’€™’€

Keeping customers happy through pricing, friendliness and service is the base line, but sharing knowledge provides that extra something that goes a long way to building loyal customers, he says. ‘€œWe want to be able to give them the most knowledge possible so they can speak intelligently with the upper-end Scotch customer, the upper end rye and Barolo consumer, about what we have.’€

Among the benefits of operating such large stores is that there is plenty of real estate in which to merchandise, said Cimini. ‘€œWe and our customers are very brand conscious, so we always have a number of large brand displays in place. But the space also gives us the opportunity to put together a rack from a particular importer, or a particular country, or for wines at a certain price point from around the world.’€

Yankee backs up their wine merchandising decisions in their quarterly wine newsletter, using dedicated racks in the Sturbridge and Swansea stores and a bin structure in the South Attleboro unit to highlight the current promotions. Yankee employs available national media and brand information, and material from companies that support their brands with a marketing budget, augmenting that with information downloaded from websites and with handwritten staff recommendations, ‘€œbecause they resonate more with the customers,’€ Cimini said.

Inventory Challenge

While being so large has its benefits, it also creates issues, says Cimini. ‘€œThe biggest challenges are inventory turns and inventory control. You basically have a one million dollar fixture in each store just to keep a good-looking representation of inventory on the floor.’€

While the stores stock as many as 2,250 wine SKUs on the floor at any one time (the Swansea store, still building business, has the least, having opened with about 1,000 wine SKUs), Yankee has more than 7,500 active wine SKUs in total, including products like Bordeaux futures and the occasional special order. That’€™s a lot to keep track of, and so Yankee goes through a fairly rigorous category management process, examining at least semiannually their volume breakdown in various sub-categories ‘€” California, Italy, Germany, etc.

‘€œIf California is 40% of our fine wine business, we want to have about that many SKUs from there, and in the case of California, we actually carry more,’€ Cimini said. Their California stocks are mostly driven by customer demand, though even Yankee isn’€™t immune to personal passions; when staff members return from a trip to, say, Portugal or France, Cimini can expect a bump in sales from those categories, proving personal enthusiasm can still drive sales even in a mass market environment. But for the most part, the stores are focused on trends in the marketplace, like the current enthusiasm in Massachusetts for wines from Spain and New Zealand.

He notes that their category management process puts pressure on wines that may have intense fans but which sell at minimal volume. ‘€œYou really want to have a good selection of German wines or Port, but if they only account for 5% of sales, but 10% of SKUs, we need to make some decisions.’€ Yankee also juggles the price point mix to make certain the total selection provides an entry point for consumers as well as top rated vintages for established clients. It’€™s an approach that befits a company with the reputation as the top wine seller in the state.

Serving the Customer

‘€œOur focus is across the entire spectrum, but at the same time we’€™re very brand conscious and user friendly. We do have a number of items that are outside of the mainstream that folks really wouldn’€™t be able to find anywhere else, and we can recommend them and get our customers turned on to them, but the lion’€™s share of our business is really stuff that people have seen and heard about, which are in their comfort zone,’€ Cimini offered. ‘€œWe are here first and foremost for the customer. We must serve them.’€

Serving them also includes in-store tastings and wine classes run by the wine director from the South Attleboro store there and Sturbridge (the program will be probably expand to Swansea next year). The company also offers about a dozen wine dinners annually in Sturbridge, about a half-dozen in South Attleboro, with Swansea to be added this year. ‘€œWe focus on different areas, importers, price points or varietals off-site, exposing our customers to particular products to make them better consumers.’€

The stores bolster wine sales with on-site tastings almost every weekend, and a grand tasting each fall that offers samples of about 100 wines to a throng of customers. ‘€œIt helps them broaden their palates, but also helps make our job easier when we recommend a wine down the road.’€

Lately, Cimini has been seeing an increase in the premium bag-in-box category, although it’€™s still much less than 10% of that sub-category, and the younger Yankee wine consumer, who had been open to buying and sampling many sub-categories, has made a bit of a shift in buying habits. He’€™s noticed a return in popularity of microbrews and boutique beers for that age cohort, but these drinkers aren’€™t turning away from wine ‘€” ‘€œThey’€™re drinking both ‘€” we’€™re seeing lots of customers coming up to the checkout with two or three six-packs and half a dozen bottles of wine.’€

While the economic slowdown has punished restaurants ‘€” local Sturbridge restaurateurs report a slump as customers across all age groups go out to eat and drink less ‘€” Yankee is well positioned to continue with strong wine sales. ‘€œConsumers realize they can replicate the same thing at home ‘€” if they’€™re spending $15 for some chicken and $30 for wine in the restaurant, that’€™s something they can do at home for a lot less.’€

Huge Beer Effort

While Yankee’€™s wine reputation is solid, as mentioned above, it is well loved by the region’€™s beer aficianados as well. While the brew selection is immense ‘€” management has made a commitment to carrying every SKU available in each store, with the Swansea store, for instance, opening with about 1,100 different beers ‘€” service is also extremely important. ‘€œWe have a terrific staff in the stores who embrace the product. It’€™s very common for stores in Massachusetts to have a staff knowledgeable in wine, but we try to do the same thing in beer,’€ said Cimini.

So in each store, there are beer experts who can help guide consumers through the vast selection either geographically or through style preferences. Since an expansion of the stores’€™ beer areas, all the brews Yankee carries get a spot on the shelves in the beer aisle, although a smaller number are also kept in the refrigerated cooler. Beer is also merchandised on the store floor in case stacks.

Taking on new brands is not really an issue ‘€” as Cimini pointed out, new brews only need a six-pack slot to get into the store, and Yankee’€™s capacious beer aisle is built for comfort and growth. Still, while the category accounts for almost 20% of dollars, its store footprint is smaller than that.

That hasn’€™t always been the case ‘€” the contraction of the micro boom in the early part of the decade had led Yankee to trim its beer area a bit. But craft brews are back big time in New England, and Yankee has harvested much of the business. A close monitoring of regional beer blogs clued in Cimini that the store’€™s beer reputation was surging. ‘€œThey were saying that we had things that other stores weren’€™t stocking, which showed that people were back to experimenting with beer. For several years, perhaps until 2007, most experimentation was coming in the wine category for us.’€ Beer customers are buying more mixed cases than in the past at Yankee, he said.

Beer’€™s limited shelf life expectancy makes category management a bit easier than with wine. Once again, customer purchasing leads the decision-making process, but this time, if the beers don’€™t turn over at a pace that protects their freshness, Yankee will trim or eliminate the brew.

While many shops have made wine tastings a core of their marketing and promotional plan, Yankee has incorporated regular beer tastings as well. ‘€œWe treat it very much like our wine department: we have regular tastings, with large Octoberfest and summer tastings, and different beer events throughout the year.’€

Doing business in beer-centric New England provides both opportunities and challenges, Cimini noted. ‘€œThere are more and more SKUs we have to take in, and while often they work, sometimes they don’€™t.’€ Brands drop in and out of the market due to supplier shifts and consolidation, and sometimes the small brewers don’€™t get the flavor profile of a seasonal brew right. Cimini added, though, that with today’€™s focus in the beverage alcohol industry on technological advancement, fewer poor products in any category make it to market. ‘€œWhen I started in the late 1980s, some products weren’€™t clean and there were problems with selling them. That just doesn’€™t happen anymore.’€

Destination for Spirits

That’€™s especially true on the spirits side, and Cimini noted an even newer phenomenon: liquor store as recreational shopping destination. ‘€œLots of people might just come in to buy Absolut or Grey Goose or Smirnoff or even Yankee Spirits vodka, but they love to see one entire side of one entire aisle ‘€” 40 linear feet, four shelves high ‘€” of vodka.’€

With stores handling 1,600 or more spirit SKUs, there are products available at Yankee that consumers simply can’€™t get anywhere else, but the big stores aren’€™t the sort of places that break trends. But that doesn’€™t mean the stores hang back when a new product trend emerges. ‘€œIf it’€™s got any sort of unique quality to it, if we hear there’€™s some buzz, then we take a position and put it on the floor so people know that we have it.’€
Still, even with so much space devoted to vodka, for instance, new items are well scrutinized for their performance. The same sort of category management process limits the number of new items, like flavored vodkas, depending on flavor profile and price point. Ultimately, products that perform on the Yankee floor get to stay. An annual formal evaluation and more informal process throughout the year keeps close watch on performance; if a new product fails to sell, it’€™s discounted and moved out.

While high end vodkas continue to perform well, the same sort of experimentation Cimini sees among wine and beer consumers is at work in spirits as well, especially with new flavors in cordials, vodkas and rums, and boutique brands in brown goods. ‘€œThe consumers who are new to market are no longer fixated on one brand or one category ‘€” they are beverage alcohol consumers and they don’€™t focus on one thing.’€

Premiumization and experimentation together play a significant part in the spirit sales trends at Yankee, he said. Single barrel and small batch expressions of bourbon, high-end Scotches and Cognacs, but also higher-end rums and tequilas are dong well.

Cordials, of course, have always been a big business in New England; as Cimini noted, a slowdown among major coffee-flavored brands like Kahlua took a long time to take effect up his way. Smaller regional brands like Allen’€™s and Jacquin’€™s continue to retain long-time customers, as do a New England phenomenon like ginger-flavored brandy.
‘€œWe’€™re still seeing a booming business in that area ‘€” we have a wall of vodka and a wall of cordials.’€

Wine, Beer & Food

Especially at the Sturbridge store, food plays a significant role in building a customer base for Yankee Spirits. Customers buying wine can pick up their cheese and crackers, or beer buyers their chips and salsas, but there’€™s also a customer base that likes to experiment with beverages and food.

‘€œThey’€™re not convenience shoppers as much as foodies who are coming in to get specialty pasta and sauce to go with their Chianti, and they go home and make a meal out of it,’€ Cimini said. The relative isolation and affluence of the Sturbridge store’€™s area make it a definite specialty food destination as well as wine center.

Right now, while the major concern in the overall industry is the economic collapse, Yankee isn’€™t buying as much at the ultra-premium end of the spectrum, and Cimini doubts he’€™ll be selling much $1,000 Cognac this winter. Still, he’€™s sanguine. ‘€œAll of the previous recessions impacted beverage alcohol in a way that sales were fine, but the consumer dropped down a level, say from $20 wine to $15 or less. But I’€™m not sure that’€™s going to happen this time, because we’€™re so much more brand conscious and luxury conscious now, and beverage alcohol is an affordable luxury. We still expect to see pretty good growth in all the price points except the highest.’€

Community Involvement

Michael Cimini, president and ceo of Yankee Spirits, is proud of the work his firm does with a wide range of charitable and community organizations. Indeed, the stores keep in touch with ‘€” and provide aid to ‘€” the local community through this ongoing commitment to more than 100 community organizations as donor or participant. Among the groups are Old Sturbridge Village; the Center of Hope, with supportive employment for the developmentally challenged; Abby’€™s House, a shelter for battered women; the Sturbridge Police Department’€™s youth behavior prevention programs; the Attleboro annual fireworks; Attleboro youth hockey; Attleboro area American Legion baseball; City of Attleboro annual food drive; Swansea Volunteer Ambulance Corps; Swansea Volunteer Fire Department; the Southeast Massachusetts Make-A-Wish Foundation; and the Swansea Independent Baseball League.

Leave a Reply

Your email address will not be published. Required fields are marked *