By the numbers: How important is December for the liquor business?

12.11.18 – Louisville Business First
“By the numbers: How important is December for the liquor business?”

The period between Thanksgiving and New Year’s Day is like football playoffs, said John Johnson, owner of the Wine Rack, a retailer on Frankfort Avenue that sells wine, spirits, beer and food.

Christmas Week is the final four. And New Year’s Eve is the bowl game to which everyone is looking forward.

Johnson started applying this sports analogy to the holiday season after he opened his business about 15 years ago. For the liquor business, particularly on the retail side, this is truly the most wonderful time of the year as many people stock up for holiday parties and shop for gifts.

“It’s just something you don’t get throughout the year,” he said of the holiday sales bump.

Johnson estimates that the holiday period represents about 15 percent to 18 percent of annual sales for his store. Alcoholic beverage sales are even better this time of year than they are in April and May, when the Kentucky Derby calls for celebrations around the state.

This chart shows how bourbon sales in the U.S. in December compare with the rest of the year. Last year, December sales were up 16 percent from sales in November.

Overall, wine is the biggest seller at Johnson’s shop — accounting for about 65 percent of sales throughout the year. Spirits sales account for about 25 percent, and beer accounts for 10 percent. It hasn’t always been that way, however. During the last five years or so, he said, the percentage has skewed more heavily toward spirits sales, thanks to their rising popularity.

This bodes well for Kentucky, where spirits production has grown during the last decade or so.

Distillers know the importance of the holiday season as well as retailers, of course.

Loretto, Ky.-based Maker’s Mark has launched a couple of holiday-related promotions, including a new holiday bottle. The bottle features a red label with gold fonts and highlights trimmed in green. The label spells the word “Joy” with an O that contains the Maker’s Mark’s seal. Those are available only at the company’s distillery in Loretto for $24.95.

Maker’s Mark also just released a holiday-themed ad using the Google 180 service, which acts sort of like virtual reality without the glasses.

Maker’s Mark doesn’t sell directly to consumers, generally. Typically that’s done by retailers because of state laws.

So its main focus during this time of year is to support retail customers in various ways, such as in-store tasting events, gift boxes, ornaments, glassware and other products, said Jane Bowie, director of Maker’s Marks Private Select and Diplomat programs.

“We try to do all that just to be a part of this festive season,” she said. “We love being a part of people’s gifting.”

Outside of the holidays, Bowie said, winter is generally a part of the year when consumers buy more bourbon. She speculated that it is because the flavors, with notes of caramel and vanilla, are comforting with the cold weather.

Jonathan Blue, whose private-equity firm, Blue Equity LLC, owns Liquor Barn and Party Mart in Louisville, also said the holidays bring a sales boost to the liquor-store chain, which has 17 locations in Kentucky.

Bt he pointed out one bit difference between this year and last year: liquor delivery.

Home delivery is a relatively new service in the Bluegrass state, after the Kentucky General Assembly repealed a ban on alcohol-delivery service in 2017.

Liquor Barn uses an app to connect with customers. Blue said this is the fastest growing part of his business and that it has led the company to hire dozens of employees during the last year.

“We’ve seen an exponential increase in revenue and orders because of that,” Blue said.

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