I've been talking about how craft beer and high-end spirits sales continue to buck the economy...and I've been getting a string of comments from my favorite grammar-ignorant punctuation-avoidant anonymous poster crying me false, saying that sales aren't that good, and will soon (when? After ten years?!) crash back to normal. Well...sorry, "Punkin Head," but there's more good news, this time from an interview with Midwest supermarket chain Hy-Vee's vp of wine and spirits, Jay Wilson in Shanken News Daily. Check it out...
Sales of beverage alcohol at the 245-unit Hy-Vee Inc. supermarket chain throughout the Midwest approached $500 million at the end of its fiscal year on September 30, according to Jay Wilson, vice president of wine & spirits. Total sales at the employee-owned chain were at $7 billion for the period. Hy-Vee is opening 3 new stores this year, and will have 248 units in the following eight states by year-end: Iowa, Nebraska, South Dakota, Minnesota, Wisconsin, Illinois, Missouri and Kansas. Its beverage alcohol departments range from 6,000 square feet down to a single 40-foot aisle. Wine and spirits each account for 30% of sales, with beer at 40%. The chain has made a commitment to educating its sales staff and has become a destination for wine, spirits and beer drinkers seeking selection and good value. So far, over 350 employees have received certification recognized by The Society of Wine Educators.
SND: How has the slow economy of the past few years affected your business?
Wilson: While the on-premise accounts have been hurt, people are still buying alcoholic beverages to take home. So they’re coming to us instead of going out.
SND: When Market Watch interviewed you in 2008, beverage alcohol sales at Hy-Vee were $350 million. How have you done in the years since?
Wilson: We just finished our fiscal year on September 30, and we’re very close to half a billion dollars in beverage alcohol sales.
SND: How do you account for that growth? What’s driving it?
Wilson: Craft beer is up 35% and we have really embraced this market. We’re putting 44 feet of nothing but craft in an open-air cold case. We’ve also got some big growth categories in spirits. Vodka is the leading category for us, while Irish whiskey is showing about a 45% trend up over the last three years for us. Additionally, rum is a very big and growing category for us.
SND: Are you seeing any return to super-premium spirits?
Wilson: We’re seeing people going back to them. And there are some people who never left them. But we’re definitely seeing solid growth there.
Note: despite craft enthusiasts' fears that supermarkets will ignore crafts for the "big bucks" of mainstream beer, Hy-Vee clearly sees the benefit of craft's bigger margins.
Ball's in your court, "Punkin."