Changes to B.C.’s liquor policy could mean a windfall for grocers.
It may be only one store in a pilot project, and the only product available so far is local VQA wine; but the long-standing dream of brewers and distillers to sell to grocers in B.C. has finally made the jump to reality.
And even though advocates doubt liquor will ever be sold in supermarkets in the huge quantities seen south of the border, they think recent changes to the province’s liquor laws herald a substantial business opportunity for grocers. “The sale of local-manufactured wine, beer and spirits could be a perfect complement to the buy local movement driving the food sector,” says Ken Beattie, executive director of the B.C. Craft Brewers Guild.
Marcus VonAlbrecht, president and COO of Mava Foods (a division of VonAlbrecht & Associates), agrees. “It brings grocery stores a step closer to being a one-stop destination,” he says. “The opportunity for cross-merchandising, food pairings and even cooking demos is tremendous.”
But not everyone thinks liquor in supermarkets is a good thing. Vancouver- Point Grey NDP MLA David Eby told the press earlier this year that Victoria had merely auctioned off VQA licences to what he called “deep-pocketed” grocery chains: “The VQA licence was designed to give B.C. wineries an advantage in the market, it wasn’t designed to give multinational grocery store chains an advantage.”
The controversy over liquor sales heated up on April 1, when Save-on-Foods in Surrey’s South Point district became the first grocer to sell VQA wine in partnership with the B.C. Wine Institute.
As a pilot project, Save-on-Foods is representing almost 100 wineries; the wine is confined to designated shelves and must be purchased at tills staffed by Serving It Right-certified cashiers who are 19 or older.
The Wine Institute has 21 licences for supermarket operations altogether: participating grocers must have a facility that is 10,000 square feet or larger and prove that 75 per cent of their sales are from food products. Other changes to the liquor laws allow liquor stores to relocate their operations to grocery outlets, or provide a connecting entrance from an adjacent location.
Beattie’s organization is lobbying for craft beer to join local wine on store shelves, with the expectation a breakthrough could happen by the end of this year. “When the government decided to allow B.C. wine, we lobbied for B.C. beer, and policy makers expressed interest,” he says. “But the problem is that unlike vintners, local craft brewers use ingredients from outside the province. So everyone is trying to determine what constitutes local craft beer.”
VonAlbrecht, whose XFour Bremner’s Blueberry Infused Vodka and other handcrafted spirits are sold in Whole Foods Markets in Washington State, is hopeful that artisanal spirits will follow beer to supermarkets. “Flavoured spirits such as mine are a cross-merchandising dream: in the U.S., grocers pair my vodka with blueberries and juice,” he says. Under B.C.’s updated liquor rules, food and beverage pairings, including samples, can take place in-aisle.
VonAlbrecht adds that his Percy’s Old Fashioned Lemonade and Percy’s Punch vodka coolers, made from a family recipe, “Would be fantastic grab-and-go items for supermarkets.”
While Beattie points out that grocers won’t be able to top government liquor outlets in terms of price, “They’ll have other merchandising advantages, first and foremost the buy local angle, plus the fact that unlike sales of beer from foreign-owned domestic breweries the money from local craft beer sales stays in the province.”
Murray Langdon, general manager of Vancouver Island Brewery, believes grocers could use a heritage angle to merchandise his Hermann’s Dark Lager and Piper’s Pale Ale, given that they were amongst the first craft beers in B.C. “We began brewing 31 years ago at the birth of the craft movement,” he says.
But although many of his colleagues complain that Victoria is slow to implement liquor policy reforms (only 35 of 73 recommendations in its Liquor Policy Review of 2013 have so far been enacted) Langdon is pleased with the government’s prudence. “Many challenges have to be overcome, starting with the concern that a proliferation of liquor in supermarkets would negatively impact private liquor stores.
“Also, while lobbyists understandably want liquor availability in the grocery sector confined to local products so that they’re not squeezed out by the sheer volume the big manufacturers are able to provide, would such a policy survive national and international trade agreement challenges?”
Although it’s too soon to determine the success of Victoria’s initiatives, a survey in the Liquor Policy Review shows that 80 per cent of all respondents want liquor in retail food outlets. Further implementation, therefore, seems inevitable — and that means more opportunities for grocers to make cash registers ring. ● The B.C. Craft Brewers Guild knows that the buy local angle will be a huge merchandising advantage for grocers. Hermann’s Dark Lager and Piper’s Pale Ale from Vancouver Island Brewery were among the fisrt craft beers in British Columbia. Save On Foods in Surrey’s South Point is representing