The 2019 Beverage Alcohol Retailers Conference was full of interesting information – we will be sharing some of the highlights over the next few weeks.
The opening keynote was provided by David Jabour, owner of Twin Liquors. They have 80 stores in Texas. It is always fascinating to see that the bigger stores face many of the same operational challenges as smaller stores.
Twin Liquors began as a single neighborhood store. Jabour’s father was in the business and had a twin brother. The chain was actually started after his father retired from his original store, and missed the business. David and his sister now run the company – keeping it a family business. Jabour shared his ideas in response to a number of one-on-one questions.
On pricing - value doesn’t mean price alone. Liquor stores can sell below cost in Texas, but Twin Liquors tries not to do that. It is important to add value to the product. Value equation is different in every market. Need to be competitive, but what does the store offer? How excited is the customer to shop with you? If they are just shopping with you for low prices, the consumer will easily go to the next guy. Shoppers want to be connected to “their” store.
Changes in Texas – certainty that we all have is that all of the laws under the 21st amendment will continue to be challenged. As retail focuses on the beverage alcohol category, pressure will increase. Historically, the laws have focused on safe regulated sale of the product, which has created some very good laws for our industry. Walmart is challenging a number of our laws in Texas – and moved in federal district court. In late April, became an Appellate Fifth Circuit case. Very interesting. Will get a decision from that in the next few months. We will see what that brings, but it could be an overnight change in our state. We have to be prepared for that. What does that mean? Always try to be the best that you can be.
Courts are changing the rules. Tennessee – first spotlight in Tennessee – more and more is going on in the courts more than the statehouses. That is going to continue. (Tennessee is the residency case.)
You have to be involved in your state trade associations. ABL provides an amazing conduit for all of us to dialogue in a format that exchanges issues and best practices among the states. If it is going on in another state, it is likely to come to your state. We are all here because of those state trade associations that have put good laws in place for our industry throughout the years. Jabour is an ABL board member. Stay involved. Stay engaged in trade associations.
BARC is also a great venue to exchange best practices. Not necessarily just state laws, but other challenges and opportunities that we have. Things that we are doing here today make us better. The more that we can communicate, the more we share best practices, and we can pick up valuable lessons from others.
"We know that beverage alcohol is at its best with independent retail. We do not want to be a dying breed, we want to be a thriving breed."
Will Twin Liquors expand to other states? Texas is a big state. Not really looking to invest outside of that. The moment you quit investing in growth is the moment you are slipping behind. We continue to look to invest in growth / acquisitions as they come to us. We have never acquired a company where we were looking to grow. Maybe it was a family business that didn’t have a succession in place or didn’t want to continue to run the business. We’ve never gone out and aggressively pursue those acquisitions, they have come to us.
Choices to add services or locations come down to answering consumer demands. If the consumer wants it, then we are going to look at it – part of our business plan is to respond to the consumer demand.
Some of the new technologies and strategies in the business are disruptive to our current business model, how do you address those challenges? We want to be prepared to respond to change, but the challenges are the disruptions. The current regulated model works today and we need to continue to convince politicians and judges that it works well and why it is important. At the same time, we have to recognize what our customers want and will support. Be prepared for change.
Today, every consumer wants everything now. That mentality gets going and the confluence of that with the three tier system looks like tectonic plates merging. It creates tremors and we have to try not to build on a fault line. That’s what disruption is. We have to be prepared to have those conversations with our elected officials. Most of them want to help – we are the face of the communities we serve and they want us to be there and to provide jobs. They have conflicting pressures on them, so you have to be there to educate them.
Ultimately, it has been fun to build from one little 700 foot store into the current company. But it is about more than that. We have built brands and other things. We’ve been part of this industry going back to Prohibition. It is all about how to make this industry better. Take a brand like Tito’s. I can think back to the infancy of Tito’s and how we helped to grow that brand. That is one of the fun things. Told story about encouraging Tito to resist the urge of getting into flavors. And he did - think that was a good decision. Deep Eddy is a growing brand. Remember when it had base flavor and sweet tea. Was thinking about their flavors, habanero and lime were considered – he urged them to do the Texas Ruby Red Grapefruit – loved sharing the ideas, knew it could grow and be popular. That was a fun thing to do – to share those ideas and see them succeed. Takes all of us to make it better and do that ten fold over. One conversation at a time.
The Q & A with David Jabour was very interesting. Hope you find something of interest to take from these notes! We will share more from the conference in upcoming communications.
