Wednesday, February 15, 2012

Should we Uncork Kansas?

"Imagine being able to buy groceries and wine at the same time. Or, being able to buy beer when you’re at a convenience store – instead of making a special trip to the liquor store. And what if you could buy ice, mixers, and snacks from your neighborhood liquor store rather than having to make a special trip to the grocery store that may be several miles away. That’s what Uncork Kansas is working to accomplish."

I guess its that time of year again. Last January, Senate Bill 54 was introduced in an attempt to allow the sale of full strength beer in Kansas grocery and convenience stores. I don't have any idea what stopped it, but somehow the bill was removed from the senate calender less than 4 months later, the issue apparently dropped. Now the debate is heating up once more thanks to organizations like Uncork Kansas.

As much as I want this to just be over with, for a final decision to be made, I think its important to remember just how critical this issue is. Its easy to view the question of where a consumer is allowed to purchase alcohol as a simple matter of personal freedom. Why should the government tell me where and when I can buy booze? But like most things in life, the reality not quite that simple.

The truth is passing legislation to allow beer to be sold in Kansas grocery stores will have a major impact on hundreds of businesses and thousands of people. Millions of dollars are at stake here. A study released last year by KU business professor Art Hall suggests Kansas would have 25 percent more grocery stores, 34 percent more convenience stores, and 58 percent fewer liquor stores if this proposal were adopted. This means Kansas could expect 116 more grocery stores, 449 more convenience stores, and 341 fewer liquor stores under his proposal. Predictions like this need to be viewed with a skeptical eye, but there are clearly some large economic implications to deal with here.

To put it simply, it seems that grocery stores would be handed a windfall while some liquor stores go out of business. But of course, it is more complicated than that.  Its easy to think of all liquor stores as the little guys, independent businesses who take pride in offering fine products while grocery stores are the big bad corporations just in it for the money.  But many liquor stores offer no customer service, little product knowledge, poor selection and no real value to the consumer. They are able to stay open purely because they are located next to a grocery store that cannot sell real beer. In a free market, such stores would never have survived and if the laws are changed, they will likely be the first stores to go under. 

The big question for me is what does this do to GOOD liquor stores? What happens to stores that offer a large and dynamic selection and a well trained, knowledgeable, passionate sales staff? These are exactly the kind of stores that are good for the beer industry and are critical for the growth and development of craft beer. While these stores may be in the best position to weather the storm, they will surely lose some of their sales.

But just like not all liquor stores are the epitome of the noble small business, not all grocery stores are ignorant when it comes to craft beer.  A few of the local grocery chains in Missouri offer excellent beer selections that could rival even the best Kansas stores.  Some of them operate with a separate liquor department that employs people just as interested in better beer as you and I.  They too can help spread the word about craft beer and in many ways, a grocery store is the best place to convert mainstream customers.  Its up to each store to decide if they will only feature the mass produced favorites or if they will expand their selection and bring in products from smaller niche producers.  Though many will probably just carry the 100 top selling SKUs, I think its wrong to assume that all of them will.

What about breweries? Large producers like MillerCoors and AB InBev would surely sell more beer if Walmart, CVS, and others were allowed to carry their full-strength products. The impact on smaller breweries is less clear. A Wall Street Journal article that covered a similar legal fight in Colorado last year had this to say:

"Colorado's 130 craft breweries are also fighting to keep the status quo. The proposal would greatly expand their potential market, by letting them sell their full-strength beers to chain groceries. But the brewers prefer to market their beer to independently owned liquor stores, some of which are enormous—50,000 square feet—and stock scores of niche brands and seasonal brews. Supermarkets don't have the shelf space, so if big grocery chains came to dominate the beer market, consumers might have less exposure to local products, said John Carlson, executive director of the Colorado Brewers Guild. 'I'm not saying it will be Armageddon,' said John Bryant, president of Oskar Blues Brewery in Longmont, Colo. 'But it would change the dynamics of craft breweries in Colorado.'"

What do you think?

Do you support legislation to allow full strength beer in grocery and convenience stores?
pollcode.com free polls


7 comments:

  1. KS needs to aim for joining the 20th Century as far as liquor laws go. Club cards, no booze for planes or trains which passed through KS, no beer on Sundays...come on Sunflower State, get with it.

    Pass this and start viewing alcohol as a product, not the devil.

    ReplyDelete
  2. As long as you allow Fred Phelps to live in Kansas...you don't deserve it...MIZ

    ReplyDelete
  3. At this point, I would just like to be able to buy a bag of ice at a liquor store without it being a separate transaction.

    The liquor stores that craft beer drinkers support would still be alive and kicking if this were to pass...Missouri is proof of that. It will surely put small stores out of business, but that is the game you play when you plan your business off of selling fifths to alcoholics and 30-packs of stones. If those guys are smart, they can be proactive and get a job as the spirits manager at the grocery/convenience store they shacked up next to.

    ReplyDelete
  4. This legislation will destroy craft beers, craft breweries and specialty alcohol markets. Shark Bite Margaritas, a Kansas based company which sells in 15 states, is against this legislation along with other craft brewers. They have stated that in states like Kansas and Colorado, they are able to get their products in all kinds of stores and out in the marketplace. If the consumer does not like the product (and they have so far!), then that is consumer choice. BUT....in states like Missouri, Texas and others where the liquor market is controlled by large corporations, it is nearly impossible to get in those stores. Big companies - like Wal-Mart, Costco, Kroger, Quicktrip, KwikShop etc. who dominate those markets - don't care about the craft and specialty market. They only focus on the top selling brands nationwide and have so many shipping, quantity and packaging rules, that craft brewers cannot crack into those markets, because they cannot meet these standards, which exist for other large corporations, not local brewers and specialty products produced for local markets.

    This a reason craft brewers in Colorado oppose this legislation, because they know it will kill their ability to sell their products. If these companies thought it would make them money, they would support it!

    This legislation is bad for all of us who like craft beers.

    ReplyDelete
  5. I think most of the panic here is being spread by Kansans who either have no idea how the rest of the country functions or have a vested interest in maintaining the status quo. I've served in one capacity or another in the alcohol trade in numerous states: Wisconsin, Georgia, Texas and Kansas and I've purchased alcohol in many, many more states.

    And let me tell you, most states function with grocery stores, large alcohol "superstores," Warehouses (i.e. Costco) and mom-and-pop liquor stores peacefully co-existing.

    I'm currently employed by a mom-and-pop store that specializes in boutique wines. And I am 100% behind the efforts of Uncork Kansas. First of all, I love the fact that we would be able to ring wine and wine accessories on the same register. What a total pain it is to ring up a bottle of wine on one register and then ask the customer to follow you into the "party room" to ring up a $1.50 gift bag on another register.

    And more importantly, I think our sales will skyrocket once we can pour 1 oz. samples. No longer will our customers have to take my word for it or make a decision based on what a professional critic says. Now they will be able to taste for themselves. How could that possibly be a bad thing?

    Finally, the current alcohol laws weren't put into effect with the noble intention of protecting the jobs of mom-and-pop store employees. That's nonsense. Nor should that be the primary concern of the legislature now. It isn't their job to pass laws to punish grocery stores or Sam's Club in the name of protecting small businesses.

    Dismantle this archaic system, "uncork Kansas" and let the consumer decide which products he wants to buy at which store. If mom-and-pop is doing a great job and has a solid customer base, it will continue to flourish as those stores do in nearly every other state in the union.

    If mom-and-pop goes away because it has a crappy selection or an uneducated staff, well, maybe that's not such a bad thing.

    ReplyDelete
  6. Hey, UGA Wino...which Kansas store do you work in? Notice you failed to mention that.

    ReplyDelete
  7. I wrote about SB 54 a couple of times last year. It looks like Uncork Kansas is just a new name for The Coalition for Jobs and Consumer Choice which was just a front group for Wal-Mart, Kroger, Hy-Vee, etc.

    http://kcbeerblog.blogspot.com/2011/01/eliminate-32.html

    http://kcbeerblog.blogspot.com/2011/02/more-on-32.html

    ReplyDelete