New York’s liquor stores are struggling as their customers dry up from the pandemic’s boozy days — and two state lawmakers have concocted a potentially controversial hangover cure.
Earlier this year, New York State Senator Michelle Hinchey quietly introduced a bill allowing liquor stores and their distributors to sell “non-alcoholic versions of alcoholic beverages” – a relatively niche market. small but fast-growing than some spirits store owners say could help revive stalled sales.
While sales of alcoholic beverages in the United States increased 0.8% to $105 billion over the past 12 months, sales of non-alcoholic alcohol climbed 34% to $620.4 million. dollars during the same period, according to NielsenIQ.
“It’s extremely important for us to support our liquor stores,” Hinchey told the Post. “These are small, local family businesses located on our high streets and this could be a new source of income for them. »
The Empire State is one of 17 states that does not allow liquor stores to sell non-alcoholic beer, wine and spirits. But it’s also one of ten states that doesn’t allow grocery stores to sell wine and liquor — a law that’s been in place since the days of Prohibition and that New York’s liquor stores have vigorously defended.
And this despite lobbying from supermarkets, which are only authorized to sell beer in New York. Last year, grocers pushed a bill that failed to advance.
As a result, insiders say Hinchey’s legislation — which is accompanied by a bill from state Rep. Al Stirpe — is sure to face stiff opposition from grocers and convenience stores, who are currently the only legal distributors of alcohol-free wines, spirits and mocktails. There are also a handful of specialty stores that only sell non-alcoholic drinks.
So far, there has been no negative feedback or opposition to the proposals, according to Hinchey.
“There hasn’t been a big surge yet,” she said. “It’s a new bill.”
But Nelson Eusebio, government relations manager for the National Supermarket Association, which represents 600 independent stores in the city, said he was unaware of the bill until he was contacted about it by a reporter from the Post – and added that he was skeptical. .
“It’s fair trade provided we can sell the wine,” Eusebio said. “We would block their bill if they don’t allow us to buy wine. They keep making a scene about us selling wine, so why would we even give them chips? »
Liquor store owners say their businesses are the natural destination for non-alcoholic alcoholic beverages.
“People don’t walk into a grocery store looking for gin,” said Michael Correra, a Brooklyn liquor store owner and executive director of the Metropolitan Package Store Association.
Ed Carino, co-owner of ProofnoMore – a three-year-old retailer and wholesaler of non-alcoholic drinks – agrees, noting that “consumers don’t know to look for non-alcoholic rum in a supermarket.”
The situation is taking shape as alcohol makers recently revealed disappointing sales in the United States. Brown Foreman, Jack Daniels’ distiller, said in March that “the operating environment continues to be challenging after two years of double-digit organic net sales growth.” The company warned that it expects sales to be “stable” this year.
Diageo – owner of Tanqueray, Johnnie Walker and Smirnoff – said its North American sales fell 2% in the six months ended December. Consumers are “more health conscious” and have “less discretionary spending power,” Diageo executives said during an earnings conference call.
In New York, retailers say liquor store sales are even worse. Members of the Metropolitan Package Store Association, based in Albany, which represents 3,500 liquor stores say their revenues are down at least 10%, and many have seen even steeper declines.
“2023 was a tough year for us,” Daniel Posner, owner of Grapes the Wine Company of White Plains, told the Post. “Sales at most retailers are down 15 to 35 percent. »
“Consumers are not purchasing as much alcohol for at-home consumption,” noted Kaleigh Theriault, director of alcoholic beverage thought leadership at NielsonIQ.
Younger consumers like alcohol much less than previous generations, according to a Gallup poll from last year. The number of adults under 35 who drink alcohol has fallen to 62%, compared to 72% a decade ago.
Experts say demand for wine, spirits and mocktails is also exploding, in a trend that coincides with a rise in marijuana use and a new focus on health and wellness.
“We are talking more and more about the harms of alcohol (while at the same time) cannabis is replacing alcohol consumption and is heavily marketed as being healthier than alcohol,” Erica Deucy, founder and host of the The Business of Drinks podcast.
“I think legalizing marijuana takes away business,” Correra added. “And Ozempic is a problem for us because people don’t drink when they take these drugs.”
Meanwhile, specialty retailers like Spirited Away, which opened the first non-alcoholic store in the Big Apple in 2019, are “seeing steady growth,” with Dry January 2024 being its best month ever, the Post co-owner Alex Highsmith.
Spirited Away offers some 300 products, including a Phony Negroni for $13, a bottle of Spiritless Kentucky 74 for $23 and Monday Gin for $40 each. There are about 30 such stores nationwide, including seven in New York.
Non-alcoholic options appeal not only to teetotalers, but also to those who practice “flexible drinking” – the practice of switching between alcoholic and non-alcoholic drinks – “to last a little longer when they go out,” said Highsmith.
When Carino first introduced local bars and retailers, many were skeptical. An upstate grocery restaurant owner declined, telling him, “We don’t have a lot of people recovering or pregnant women in our market,” Carino said.
Now that retailer is a regular, as is chic Manhattan restaurant Gramercy Tavern, whose sommelier is well-versed in mocktails, according to Carino.
Still, New York wine merchants and their distributors recognize that food retailers will be the biggest obstacle to getting soft drinks onto their shelves.
“The biggest opponents of this would be the grocery industry,” said David Waldenberg, director of the New York Fine Wine Wholesalers Alliance and president of BNP Distributing Co.
New York Post
