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Harry Lukas has built a monument to drinks retailing in the affluent Kansas City suburb of Overland Park, Kansas. Lukas Wine and Spirits Superstore, which opened last October, spans more than 50,000 square feet—ranking it among the biggest stores in the United States. Wine represents a whopping 52% of sales, while spirits take 30% and beer captures the remaining 18%.
The store, located across from its previous 30,000-square-foot space, is one of two Lukas locations in the Kansas City market. He has a second operation just south of downtown on the Missouri side of the border. Lukas is currently expanding that location from 34,000 square feet to 46,000 square feet. Overall, his goal is to create a retailing stronghold around Kansas City—a market in transition since the venerable Berbiglia Wine & Spirits chain downsized sharply over the past year.
“In the Kansas City market, there are Sam’s Club, Walmart and Costco locations, and we compete easily with all of them on price,” Lukas says. “Expanding is the best investment decision I could make. A store like mine will give any competitor pause before deciding to come here.”
Lukas carries nearly 8,500 SKUs, including 4,800 wines, 2,000 spirits and 1,640 beers, and that total is rising as the shelves fill up at the new store. Gross margins for wine run 23% to 25% on average, while beer and spirits are around 15% or less. SND sister publication Market Watch has more.
With U.S. imports of New Zealand wine up 14% to 6.5 million nine-liter cases in 2015, five of the category’s most dynamic franchises earned Impact “Hot Brand” honors. Market leader Kim Crawford continues to lead the charge, approaching 1 million cases on a 17% volume jump last year, according to Impact Databank.
Since 2012, Kim Crawford ($17-$33) has added 400,000 cases to its U.S. volume, with consumers venturing beyond its leading Sauvignon Blanc and Pinot Noir offerings to its Unoaked Chardonnay and Pinot Gris. “We’re looking to solidify our position as the number-one Sauvignon Blanc in the U.S. while offering an elevated experience to brand loyalists through our Small Parcels collection of terroir-driven wines,” says Julie Rossman, Kim Crawford’s global director of marketing.
To keep pace with growth, Constellation is doubling production at its Marlborough winery to 40 million liters annually on a $33 million investment. That move will also benefit New Zealand portfoliomate and fellow Hot Brand recipient Nobilo, which grew 12% to 560,000 cases in 2015.
Another fast-rising Kiwi brand, Oyster Bay, saw U.S. volume surge 15% last year to 630,000 cases on the strength of its Sauvignon Blanc, Chardonnay, Pinot Noir, Merlot and two sparkling wines. Oyster Bay has added about 80,000 cases in the U.S. market each of the past few years, aided by consumer trends toward super-premium, cool-climate wines. “The explosive growth in the New Zealand category will continue. There’s a lot of room to grow consumer awareness,” says Oyster Bay Wines USA vice president, national sales manager, Peter Edgar. “Adoption is currently highest among Gen X and Y consumers, but it is broadening out.”
New Zealand’s Hot Brand contingent also includes E.&J. Gallo’s Starborough and Treasury Wine Estates’ Matua. The latter, which has garnered added exposure through partnerships with baseball teams like the Boston Red Sox, Texas Rangers and Colorado Rockies, is up nearly 70% over the past two years. Starborough, meanwhile, grew by 50,000 cases in 2015, rocketing past the 400,000-case mark.
•HopCat, the Michigan-based bar chain with a craft beer focus, is poised to enter Illinois. The company has struck a deal for a new location on Chicago’s North Side, at 2577 North Clark Street. An opening date has yet to be announced. HopCat was founded in 2008 in Grand Rapids, Michigan, and has been in expansion mode since raising $25 million in new capital last summer. Last fall, HopCat opened a 300-seat restaurant with 140 tap handles in Lexington, Kentucky, and it’s also operating in Indianapolis, Madison, Wisconsin and Lincoln, Nebraska. Plans call for 30 additional locations across the Midwest over the next five years. HopCat is owned by BarFly Ventures LLC and is led by Mark Sellers.
•New York’s Bronx Brewery has introduced a new imperial rye IPA, Rye Fidelity. Part of Bronx’s B-Side series of limited brews, Rye Fidelity is at 8.1% abv and is available on draft through April. Bronx Brewery, which produced 7,350 barrels in 2015, has a year-round lineup including American Pale Ale, Belgian Pale Ale, Rye Pale Ale and Session IPA.
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