By Paula Gardner // MLive
Michigan’s packaged liquor sales reached a new plateau in 2015, topping the $1 billion mark in wholesale purchases by retailers.
Leading the pack were chain stores – notably Meijer Inc., based near Grand Rapids – which now account for 15 percent of wholesale liquor buys across the state.
Sales of packaged liquor, which is sold in sealed bottles to be consumed off-site, last year were 26 percent higher than in 2010. The numbers showed an increase of 6 percent from 2014, according to state data that tracks wholesale purchases.
Michigan is a “control state” when it comes to liquor sales, acting as the middleman in wholesale transactions and setting minimum prices that its licensed customers can, in turn, charge consumers when they buy by the bottle. While records of the retail sales aren’t available, the wholesale tracking gives an indication of who is selling the most liquor in the state.
The top five liquor stores buying liquor for resale to Michigan consumers are Meijer stores. Number one for several years is the one in Traverse City, with its total falling from $2 million in 2014 to about $1.8 million last year.
That store is followed by stores in the Grand Rapids (on Beltline and on 28thStreet), Ann Arbor (on Ann Arbor-Saline Road in Pittsfield Township) and Okemos areas.
“Like many industries, big boxes are taking more (market) share, but Michigan has a large number of independent stores,” said Tony Mitchell, incoming president of the Michigan Licensed Beverage Association.
About 4 percent of liquor retails account for 17 percent of all sales in Michigan.
Chain store totals across the state reached $116 million for Meijer, $30.4 million for Kroger and $12.3 million for Costco. Neither Meijer nor Costco representatives would comment for this story.
“It’s just an added value for stores that have it,” said Kroger spokesperson Rachel Hurst about package liquor sales in the chain, which operates about 130 stores in Michigan.
Hurst said she couldn’t give details on store plans for its liquor sales, including how much space per store is dedicated to packaged liquor. However, the stores do respond to customer demand, and that appears to include more liquor options in many locations.
“Close evaluation of sales trends and customer preferences … play a huge role in decisions,” Hurst said.
Meijer store remodels often include reconfiguring of the liquor sales sections to make them more conducive for shoppers, said Mitchell.
The chain also is doing more cross-promoting, highlighting certain liquors along with mixers.
That feeds into one reason for the growth in liquor sales: “All of the excitement for cocktails and mixology,” Mitchell said.
“New products are coming out all the time,” Mitchell said, noting that they often involve new flavors.
Also influencing the “drink at home” movement are classic tastes.
“Bourbon and whiskey are leading the trends,” Mitchell said. “They’re taking us back to the 1960s and ’70s.”
The recent sales increase occurred while the number of licensed sellers remains fairly constant, said Michael Loepp of the Michigan Liquor Control Commission.
About 6,907 SDD licenses were issued to Specially Designated Distributors in Michigan, according to MLCC records. Of those, about 3,950 were stores: Big boxes, groceries, convenience stores and party stores, said Mitchell.
But one number that is changing is the product lineup.
“We currently have 7,906 different distilled products available for sale in Michigan,” said Loepp in an email. ” The number has increased steadily over the years. Five years ago we had approximately 6,300 products.”
That is changing how many liquor retailers – not just chain stores – approach their business.
“I stock probably seven times more than I did 30 years ago,” said Maher Jaboro, co-owner of A&L Wine Castle in Ann Arbor. The store is in the top 30 of Michigan wholesale liquor buys.
“We used to have a six-high shelf,” he said. “Now we have one shelf that is 10 shelves high.”
The items on the shelves are getting expensive as their numbers increase. Buyers’ tastes are increasingly turning to specialized and rare liquors. And as prices climb, so do the expectations for well-designed packaging, to convey an image worthy of price.
Jaboro noted that one example is vodka. Absolut and Stolichnaya used to be higher-end. Now, he said, “Stoli” may be midrange at $20 per bottle – compared to the $300 per bottle varieties out there.
While vodka, gin, tequila all have their follows and their twists on the standard brands and flavors, it’s bourbon that’s pushing the sales, Jaboro said.
A&L stocks $3,000 bottles, but Mitchell notes that they may be sold for special occasions or to collectors – or by restaurants, which will further mark it up to sell by the glass.
A really good bottle may sell for $75 to $300, Mitchell said.
And Jaboro noted that someone buying a $100 bottle of bourbon isn’t likely to mix it with a 2-liter bottle of Coca Cola and slam it in one sitting.
“They are drinking better,” he said of many of his customers. “There are so many choices. That’s the fun part.”
