Total Wine uncorks a shakeup in Michigan's alcoholic beverage market
Maryland-based Total Wine & More has made its entry into Michigan, shaking up the state's market with its first stores opening in Grand Rapids and Ann Arbor this year and two more on the way for Novi and Sterling Heights.
With their massive aisles and more than 15,000 wines, spirits and beers in stock, the company's stores are a mecca for alcohol drinkers.
The 30-year-old company, known for its low prices and huge selection, has already had an impact on competitors in the state, some of whom are concerned about the future of their businesses. Total Wine contends there is enough business for everyone.
The Total Wine & More was founded in 1991 by two brothers in Delaware and has grown to more than 217 stores in the United States. Its stores offer more than 8,000 wines, 3,000 distilled spirits and 3,500 beers, plus curbside pickup and delivery.
“The business model is one in which we provide our customers with not only great service, but with incredible selection, price and outstanding customer experience,” said Edward Cooper, spokesman for Total Wine & More.
For its foray into Michigan, the company has turned to previously occupied buildings. In Grand Rapids, its store is in a former Babies R Us location with 34,250 square fee. In Ann Arbor, the store is in a 28,872-square-foot building that used to house a Big Lots outlet.
Cooper said it took years for the company to expand into Michigan as it navigated the state’s regulations on alcoholic beverages.
“For us, we understand that customers love, not just in alcohol, but in just about anything, customers love the convenience of getting what they want in one single place," he said. "It took us several years to finally get to Michigan because in Michigan the distilled spirits are controlled at the state level and it took us a little bit of time to understand how to work in that controlled environment in Michigan.
"We spent a fair amount of time working with the state and working with the authorities to be able to understand how to be able to do that so that it would be good not only for the state, but also it would be good for our customers" Cooper said. "We've come to the state kind of late, I guess, but we're confident that we'll be able to provide our customers with that which they are looking for."
Not everyone is happy to see Total Wine come to Michigan. Other stores are afraid they can’t compete.
“This is very alarming to all of the small mom and pop shops, the individually owned units,” said Joel Smitter, owner of Smitty’s Specialty Beverage in Grand Rapids. He’s been in business for 40 years and said he’s seen catering business drop since Total Wine opened.
With the company's prices slightly above cost, it’s tough for smaller businesses to complete with Total Wine, Smitter said.
“That’s quite an attraction to anybody, especially if they’re going to be buying multiple bottles,” he said. “I’m just grateful that my store is 7.2 miles away and I’ve got the reputation of being one of the largest bourbon retailers in the state.”
Kevin Kallabat, owner of Orion Market in Lake Orion, said he’s seen an increase in competition during his 34 years in business and now he’s concerned about the impact Total Wine will have on his sales.
“There’s some people you establish a relationship, a friendship, yes they will support us, but at the same time what is everybody looking for? It’s to save a dollar,” he said. “How loyal can anyone be? They cannot be 100% loyal. In today’s world, really there’s very little loyalty, but we need every person to support us in ever which way. We can’t depend on just the loyal customers.”
Brian Zetouna, president of Allied Liquor Stores of Michigan, a group of independent store owners, said for years he'd wanted to see the state Liquor Control Commission implement a 30% minimum mark-up.
“That’s going to preserve and protect the industry,” he said.
Cooper said that the company considers its competitors chain stores such as Costco because of their pricing and that people typically shop at Total Wine to stock up.
The average Total Wine customer visits the store three to six times a year and live within a 20-mile radius, Cooper said.
“When I’m looking for a couple bottles, a couple six pack or a case watching the football game or a baseball game, of whatever it may be, most consumers will go to their local convenient package store,” he said. “And when they’re looking to throw a big event, or a big party or they’re stocking up,they’ll come to retailers like Total Wine. They’ll do it infrequent, three to five, six times a year, but it will be a big shop. And that’s how everybody coexists.”
The Amazon of wine
Total Wine expects to have four stores open in Michigan by the end of the year, Cooper said. In addition to Grand Rapids and Ann Arbor, locations will open at 21071 Haggerty Rd in Novi, which once housed an Office Max. The Sterling Heights location will be in the former Toys R Us at 13801 Lakeside Circle.
Ken Dalto, a Bingham Farms-based retail industry analyst, said he considers Total Wine the Amazon of wine.
He said they have a good formula: of low prices, quality and variety. The company also has the customer base to support its business.
“The demographics between the Gen Xers, the millennials and even right under that younger than the millennials, they’re wine drinker by-and-large,” he said. “They’re not hard alcohol, brandy, bourbon, scotch by-and-large. Those drinkers tend to reside in the older people who grew up on that.”
Dalto said that as a destination store, he expects people to drive miles to buy months of wine supply.
Cooper said each store hires between 50 and 75 employees, with about 75% working full time with benefits.
Employees take more than 100 hours of training to learn about different types of wine and how they're produced, Cooper said. There’s ongoing training as well as samplings.
“As we get new products in, as folks who are winemakers or distillers or brewers come to the area... we’ll have them in our stores,” Cooper said. “They’ll be in the classrooms and they’ll do samplings for our team members so the team members understand what’s the taste profile, what do you taste when you taste a little bit of this wine, what does it pair nicely with, all the things that a customer wants to know before they buy a bottle of wine. We replicate that for our spirits folks and our beer folks."