Brown Derby: Retailer of the Year 2014

Given the task of locating one of the country’€™s best fine wine enterprises within the borders of Missouri, a novice could be forgiven for starting his search somewhere near the St. Louis Arch, or close to the once bustling Kansas City stockyards. But while there are any number of great wine shops doing business in the cities on the East and West ends of the I-70 corridor, it’€™s in Springfield, the southwestern Missouri city of 160,000 closer to Arkansas and Oklahoma, where the search begins and ends. Because that’€™s where the Brown Derby International Wine Center & Marketplace has been doing business for more than 40 years.

Regularly lauded in such major consumer publications as Food & Wine and the Wall Street Journal for the breadth and depth of the wine selection and its pioneering catalog business, the International Wine Center has been in some ways emblematic of the changing American relationship with wine, reflecting and sometimes leading trends since the 1970s.

Whether it was pioneering the appreciation of niche and boutique California wines, launching a widely respected catalog business that made fine wine more accessible to the average wine consumer, or morphing the catalog business into an early and potent internet-driven business, Brown Derby has always been ahead of the curve. Recently that curve brought the attention of the management team owner Ron Junge, wife JoAnn, son-in-law and director of operations Brad Feuerbacher and daughter Jennifer Feuerbacher to the development of the Brown Derby Deli, a pairing of their well-established cured meat and cheese business with by-the-glass wine and bottled beer service at an in-store café.

The latest venture, launched to coincide with Beaujolais Nouveau day this past November, began by offering seven wines by the glass priced from $4 to $20 (for five ounces of 2011 Caymus Cabernet Sauvignon) and 25 beers, although the menu notes that any beer not listed is also available for purchase. Various cheese plates and charcuterie selections complete the opening day menu.

Wine, Craft Beer and Cheese Bar

The 22-seat wine, craft beer and cheese bar, complete with a communal table that seats ten as well as smaller tables, opened as a result of a change in state law that allows retailers to sell beverage alcohol for immediate consumption on their premises, and is the only one like it in the state at the time, says Brad Feuerbacher.

‘€œToday’€™s consumer more and more wants to experience things from local and small producers that they are unfamiliar with, and to provide them with a way to be able to sit down and enjoy these items is another way for us to connect with our customers,’€ says Ron Junge.

When the Brown Derby International Wine Center moved to its current location in 1995, they increased the ‘€œMarketplace’€ product selection, focusing on meats, cheeses, and other deli items from around the world not available in the local market. Packaged foods became a focus as well, and products such as dips, sauces, chocolate and teas, to name a few, have become an integral part of the shopping experience at the Wine Center and Marketplace. By sampling these products on a daily basis with their customers, they are continually exposing them to new flavors and ways to entertain at home. The next phase of the ‘€œMarketplace’€ was getting into housewares, gifts, home décor, bath and body, holiday décor and more, adding another dimension to the flagship store.

Being first with innovations is built into the Brown Derby International Wine Center & Marketplace DNA, say the pair. “€œWe’€™re an unusual store compared to wherever you go€“ my daughter and wife have sourced a lot of unusual things that have attracted both male and female customers food, clothing, gifts, even baby clothes and unique laundry detergent. People are coming in to buy wine and they buy the laundry detergent every time,”€ says Junge.

Bringing customers the new at fair prices has been at the heart of the International Wine Center enterprise since the beginning. “€œCompetitive pricing, big selection and exceptional customer service is what we do,”€ says Feuerbacher. “€œFor us it comes down to the people we work with, a great group who are passionate not only what they do on a day to day business  they not only work it, they live it.”

Their reputation in the Midwest and beyond is superb. Kansas City-based Doug Frost, Master of Wine and Master Sommelier, has over the last three decades dealt with Brown Derby, mostly as a customer, but also as a distributor/ supplier. “It’s actually really hard to offer anything but fulsome praise for their work. They’ve brought exciting wines at very good prices to my neck of the woods, the heartland, and they’ve done it very skillfully for years,” he says.

“Ron Junge has exhibited excellent taste in wines from the very beginning. He is a very good retailer, understanding his customers and their interests, but always pushing ahead to look at wines, wineries and wine regions that their customers are likely to get excited about next. Unlike some, they aren’t retailers who simply buy everything that gets someone’s lofty score. Equally, they don’t focus upon one style of wine, never letting philosophy trump a broader and more catholic view of the diverse world of wine. I know they have their favorites but I never felt limited by their catalog,” says Frost.

Unique Operation

There are actually two completely different types of Brown Derby operation – a chain of 19 beverage alcohol stores located in and around Springfield, and the massive wine, beer, spirits and food retailer at the heart of the operation. In general, the stores vary in size from modest outlets to larger units, with the specific product mix varying depending on size, location, clientele and local trends.

One of the advantages of running both a chain and a wine-focused marketplace store lies in the warehouse, attached to the International Wine Center and servicing all the stores. This allows the Brown Derby to purchase in larger drops and service stores of all size while taking advantage of whatever discount a larger store might have. It allows the product mix to be fine-tuned as well. ‘€œWe can transfer from store to store and that’€™s how we constantly run this warehouse, looking every day, every week, at what sells out in one store and not in another. We send trucks to those stores frequently and that’€™s the way we make the best of our inventory dollars and the best utilization of inventory in each store,’€ says Feuerbacher. A team of four keeps the reports running and the trucks shifting merchandise, resolving under stocks and overstocks.

‘€œThe biggest facet of our business is the constant never-ending flow of new items,’€ says Feuerbacher. ‘€œOur team is constantly going over and trying to keep up with what’€™s coming out and bringing it to our consumers, keeping track of brands that come on strong and then die off after six or nine months. We’€™re much more selective than we used to be because of that explosion of products, and try to keep them on a short leash, constantly asking ‘€˜Are they paying for their square footage on the retail shelf?’€™’€

‘€œAt the same time, we do want to be the first on the block to get something like a 50 Shades of Grey wine which just came out,’€ says Junge. ‘€œIt’€™s a balance we’€™re always looking at.

Brown Derby History

There’€™s been at least one Brown Derby in Springfield since 1937, when John A. Morris opened the original location. It eventually became famous as the first retail location where the son of the founder first sold fishing lures and accessories. (The son, John L. Morris, eventually launched what became Bass Pro Shops from a small section of his father’s store.)

Other stores opened, closed, and moved, but after the Brown Derby International Wine Center opened in 1969, it started to gain international renown around the time Junge, the son-in-law of the founder, joined the business in 1971.

‘€œI started dating the owner’€™s daughter at Drury College [now Drury University] and I worked part time at one of the Brown Derby stores,’€ says Junge. ‘€œWhen I graduated and my father-in-law opened a new store, he asked me if I would like to manage that store ‘€“ I really loved the wine and spirit business already and told him ‘€˜I’€™d love to.’€™’€

The growing interest in California wine had already caught Morris’€™ attention and he sent Junge and wife JoAnn on a road trip there to get the lay of the land in the early ‘€™70s. Junge returned convinced that California wine would be essential to the future success of Brown Derby, and started purchasing wines he liked ‘€“ he recalls being the first to bring such labels as Duckhorn Cellars and Diamond Creek Vineyards to the state. As he puts it, he was bitten by the wine bug as more and more of his time was spent attending major tastings, meeting with producers and importers and looking for more opportunities.

‘€œI always wanted to have the finest and be the finest ‘€“ the first time I saw the Morrell catalog [referring to New York City’€™s Morrell & Company] way back when, I said ‘€˜I want to be like that guy; I want to emulate what they’€™re doing.’€™’€

More than three decades later, Junge, along with his son-in-law Feuerbacher have established the Brown Derby International Wine Center and Marketplace as one of America’s top wine retailers. Since moving to its current location in 1995, the Center includes a 5,000-square-foot temperature- and humidity-controlled wine cellar that houses more than 60,000 bottles of wine, many exceptionally old.

Spirits and Beer Also Important

Spirits and beer of course play a major role in the store’€™s business profile (the break down is about 50% wine, 20% spirits, 15% beer and 15% food and other items at the International Wine Center), and there’€™s been significant growth not just in food but also as the company has expanded into unique housewares, gifts and even baby clothes. (Overall, the chain breakdown, including the International Wine Center, is about 30% each for wine, beer and spirits and 10% food and other items; the company employs about 150 people altogether.)

Along with the guiding principles of pricing, selection and service, the Brown Derby team keeps a close watch on what the market is driving ‘€“ leading trends whenever possible but making sure they are in tune with consumer whims in any case.

For example, as with many fine wine shops, the futures business in Bordeaux has become dramatically different and the International Wine Center now takes a smaller position in that aspect of wine retailing. And also like with many other retailers, while the number of bottles going out the door has returned and even nudged ahead of pre-Recession numbers, the price customers are willing to pay per bottle has stayed low.

‘€œCan we still get that dollar amount for the great Barolos and other classic wines? That’€™s a question we ask a lot, and we’€™re looking at doing things like putting the great wines that have been here for a while on sale more often ‘€“ they’€™re still great wines but they aren’€™t moving,’€ says Feuerbacher.

Still, what has made the International Wine Center so popular is that cellar filled with goodies, and you never know when the next big purchaser will call. ‘€œWe’€™ll go two weeks with business just being normal, and then we’€™ll get a call for something that’€™s been in the cellar for five years ‘€“ we recently got a call from a man who wanted to buy five bottles of 2003 Petrus, and then a week later he called and asked if the other bottles we had were available – that was quite a sale,’€ says Junge.

Junge launched the company’€™s catalog business in the 1970s and the monthly arrival of the wine drinker’€™s wish list helped fill a need and a broader understanding of wine throughout the country. Selling wine on the internet, then, was a natural extensions for the company, which launched online sales in 1996.

Online Sales

Much of their fine wine business has migrated to the internet, about 20% to 25% currently, though prior to the dramatic increase in the number of internet wine vendors, the level was even higher. Online, just like in-store, however, consumers are these days gravitating more toward the $25 price point than $75.

Still, in early December, a glimpse at the BrownDerby.com best sellers reveals an eclectic mix at good yet strong prices ‘€“ top selling was the 2006 D’Arenberg Cabernet Sauvignon for 29.94, number two the 2008 Ch Beaucastel Red Blend for 49.94, and number three the 2007 Domaine Olivier Hillaire Red Blend for 69.94. Rounding out the top five were a non-vintage Serena Red Blend at $10.99 and the 2007 Pegau Red Blend at 69.94.

While Burgundies have held their price, and the most sought after Italian wines perform unevenly, the search these days is for what Feuerbacher calls ‘€œgood values’€ in French and Italian vintages, wines at prices not widely available at the turn of the century. In general, Spanish wines overall and Argentinian Malbec are performing very well for the Wine Center, as well as those from California, though the market for Australian wines, especially those in the upper tier, have collapsed.

Unlike many retailers, the International Wine Center wasn’€™t caught wanting by the Moscato and sweet wine boom of the past few years. ‘€œIn the Midwest we’€™re known as the Moscato kings – five years ago we were selling a lot of it before it became a national trend,’€ says Junge, crediting both the slight sweet tooth of local consumers and the Missouri wine industry.

‘€œThe state is known for sweet wine production, and while we are big in collectibles, we sell a lot of $5.99 Missouri wines,’€ says Feuerbacher. ‘€œWhen we have wine tastings and fundraisers, we might have a 1,000 people come and at the end, most of the bottles that have been emptied are the sweet wines,’€ says Junge.

Depending on the Staff

Merchandising bells and whistles aren’€™t much a part of the International Wine Center’€™s mix ‘€“ no displays, no case stacks built high. ‘€œIt’€™s all down to our staff on the floor,’€ says Feuerbacher. ‘€œAll our managers and team members are very big on hand selling and we’€™re very big on making sure they know the wines.’€

‘€œWe do a lot of on the job training and tasting ‘€“ we believe you can read as many books as you want about wine but you have to do a lot of tasting and really get to know the product if you want to be in the best position to sell the product.’€

Like in many parts of the country, craft beer is booming; at the International Wine Center, that trend is even more pronounced, stocking more than 1,000 different beers throughout the year in an ever-shifting mix. With the advent of a fast-growing local craft brewer, Mother’€™s, the heat has been turned up even higher locally.

The team speeds that interest with popular schemes like a ‘€œbuild your own six-pack’€ program, allowing customers to mix and match bottles. ‘€œWhen a six-pack gets from $9.99 to $12.99, people can be wary, but if you can pick up two or three that you’€™re comfortable with and then try a few that are new to you, it eases the sale,’€ says Feuerbacher.

Seasonal beers, whether true seasonals like pumpkin ales or stronger winter brews or limited release offerings, are driving the entire category, keeping the entire category relevant and interesting for their customers. And of course they sell their share of large national brands, though they play a larger role at the chain stores than the International Wine Center, but overall those brands are carried mostly for customer convenience. ‘€œThe prices are very low and not where the growth is coming from,’€ says Feuerbacher.

American Whiskey Sales Strong

While the locavore movement is alive and well in the beer aisles, the small distillery niche still has a way to grow in Missouri. But American whiskies ‘€“ bourbons and ryes, as well as moonshine and other new brands and expressions ‘€“ are taking a much larger share of the spirit business and the team is adding shelf space for the category. When the store promoted an in-store visit from legendary moonshiner Junior Johnson for his Midnight Moon brand, more than 300 customers lined up to see him and buy an autographed bottle.

Spirits for the first time in a few years have leveled off in growth at the chain, perhaps due to a flattening among vodkas and flavored vodkas over the last year or so. That may come as a relief in one way, as the balancing act between taking on new products and trimming poor performing brands has been constant. The room for more brown goods, for instance, is coming from a slightly reduced vodka section.

But it’€™s crucial to keep aware of what consumers will suddenly favor: for instance, the explosive growth of brands like Rumchata and Dr. McGillicuddy’€™s Fireball. ‘€œAll of a sudden a thing that’€™s been around for a while like that explodes, and we’€™ve seen a massive increase in sales over night,’€ says Junge.

Just as trends ebb and flow, keeping the International Wine Center current means steady tweaking; for instance, they’€™ve just built and installed a new glass humidor and placed it on the sales floor near the single malt Scotches scotch and bourbons. That’€™s improved cigar sales at a time when the tobacco business has slowed somewhat, just showing the benefits of steady upgrading and awareness of what customers will buy, when given the chance to see things in their best light.

It’€™s an approach that makes sense with cigars, fine wine with cheese, craft beer with charcuterie and even baby clothes and laundry detergent, as the International Wine Center team keeps learning and relearning. When your customers learn to trust your judgment, you can sell them anything as long as you stand behind whatever it is.

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