By Pat Pape
Every month, wine enthusiasts, from 20-somethings to retirees, gather at a Sioux Falls, South Dakota, country club or restauÂrant to savor a gourmet dinner and wine tasting organized by â€" youâ€™ll never guess â€" a local convenience store.
The dinners are the brainchild of Heather Boysen, who owns two stores â€" Taylorâ€™s Pantry and Good Spirits Fine Wines and Liquor â€" which share the same 5,000-square-foot retail space. "We specialize in wines other than what you can find in a grocery store," said Boysen, who has more than 1,500 selecÂtions on her store shelves.
Getting consumers to sample new and different wines is the best way to convince them to make a purchase, BoyÂsen believes, but local ordinances proÂhibit onsite wine tasting. So she arranges the dinners, which cost customers beÂtween $30 and $50 each, as often as three times a month.
"Itâ€™s a great way to sell wine, and peoÂple get to try six to nine wines, but withÂout having to commit to buying a bottle," she said. "Weâ€™re a fine wine shop that happens to sell gasoline instead of a gas station that sells wine."
According to the Wine Institute, a San Francisco-based association for the CaliÂfornia wine industry, California vintners shipped 467.7 million gallons (196.7 milÂlion cases) of California wine to the U.S. wine market in 2009, up a modest 0.2 percent compared to the previous year. However, the estimated retail value was down 3 percent from 2008 as conÂsumers selected lower-priced vinÂtages, reported wine consultants Gomberg, Fredrikson & AssoÂciates.
"Although consumers were cautious in their spending last year, the underlying conÂsumer trends in the U.S. have kept wine on the dinner table during this tough economy," said Robert P. Koch, presiÂdent and CEO of the Wine Institute.
Koch is optimistic that 2010 final sales figures will be more encouraging than last yearâ€™s since "Fourth quarter sales  were up nearly 16 percent compared to the same period in 2008."
Michelle Chant, manager of Veridian Market and Wine in Silver Spring, MaryÂland, believes the conservative wine customer is the norm in todayâ€™s econÂomy. Even though her store sells bottles of wine for as much as $100 and chamÂpagne at three times the price, "Theyâ€™re always looking for the best buy," she said of customers.
On-premise retail sales continue to comprise the largest share of the wine business, which also faced great chalÂlenges between 2007 and 2009 as a reÂsult of a below-par economy. With many restaurants marking up wine as much as three times the retail cost, itâ€™s no surprise that a price-conscious pubÂlic has cut back on wine consumed away from home.
When it comes to at-home conÂsumption, supercenters and wareÂhouse clubs have enjoyed solid sales because of value positioning and low prices. In addition, supermarket wine sales have grown thanks to the cross merchandising of food and wine, which helps consumers make pairing decisions.
Convenience stores, along with natÂural food retailers and wine and liquor stores, are considered part of "the other" wine channel, according to Mintel, a consumer research organiÂzation, and are responsible for approximately 19 percent of all wine sales. But this "other" wine channel saw sales drop 22 percent between 2004 and 2009, a combination of the economy and the growing presence of competitive mass merchandisers and supermarkets. Now, many of "the other" retailers are expanding their wine selections, re-evaluating pricing and providing helpful information for shoppers who want assistance in choosing the right wine at the right price.
Chris McKelvy, manager of the Oxford Convenience Market in Oxford, Maryland, sells wines from around the globe, plus an array of upscale cheeses. He schedules occasional wine tastings in his store to help customers learn more about the products he offers.
"We put out a little cheese, and sometimes a [wine] sales rep will bring in a few bottles to try," he said. "If peoÂple are going to sit there and try the wine and talk to the rep, they usually feel obligated to buy. Some will buy a couple of bottles."
Despite the perception that most cusÂtomers will purchase after sampling, McKelvy believes that the tasting itself provides the best reason to take the product home. "Itâ€™s like buying a cigar," he said. "You donâ€™t always know what youâ€™re going to get until you try it."
Giving customers a good value is critiÂcal to selling wine today, according to Roger Therney, owner of Stevenson Pier Citgo Mart and Gift Store in Little Sturgeon, Wisconsin. "We probably have 15 to 20 different wines with prices up to $22," he said. "I think price is a big thing, and weâ€™ve been running some specials."
Therneyâ€™s store sells select bottles of $6.99 wine at five for $30 and $5.99 wine at five for $20. "Youâ€™ll see customÂers buy one bottle, and then come back and buy five," he said. "Of course, itâ€™s got to be good-tasting wine."
Recently, heâ€™s offered two California labels, Costal Ridge and Foxbrook, at the special prices. Both are products of Bronco Wine, the same company that produces the $1.99 Charles Shaw charÂdonnay â€" best known by the nickname "Two Buck Chuck."
Some convenience chains produce their own wines, including 7-Eleven. The retailer sells a limited-edition CaliÂfornia chardonnay and a cabernet sauviÂgnon under the Yosemite Road label for $3.99 and three California wines â€" a chardonnay, merlot and cabernet sauviÂgnon â€" all bearing the Sonoma Crest brand and selling at $9.99. Huckâ€™s conÂvenience stores, an Illinois-based chain, sell Five Buck Huck.
Kum & Go, headquartered in Des Moines, Iowa, offers its own Napa Creek cabernet sauvignon and chardonnay, which sell for under $15 a bottle, and its proprietary Sea Ridge merlot and charÂdonnay sell for less than $7.
"We have seen a positive response from our customers on our wines," said Kevin Krause, vice president of marketÂing for Kum & Go. "They are an exÂtremely high-quality product at a very affordable price. The Sea Ridge wines could be compared to the popular YelÂlow Tail and Barefoot brands. Last year, Napa Creekâ€™s 2007 Napa Valley cabernet sauvignon was named Double Gold Best of Class in the San Francisco InternaÂtional Wine Competition."
After ensuring a well-priced selection on store shelves, the next step in sellÂing wine is letting customers know that it is available. In addition to arÂranging the gourmet wine dinners, "We do two or three direct mailings a year and participate in an annual womenâ€™s expo that attracts as many as 8,000 potential customers," said BoyÂsen. "I also write [wine] articles for a local magazine, which gives me more exposure."
Ordinances in Manhattan Beach, California, prohibit co-owner Justin Ashlock from conducting wine tastings at the six-month-old SmartStore, which sells wines priced from $2.99 to $25. To make customers aware of the storeâ€™s offerings, Ashlock advertises in local publications and uses social meÂdia, including Twitter and Facebook, to promote products.
SmartStoreâ€™s website also encourages customers to share their own opinions about the store, its products and services on consumer reÂview sites such as Yelp. (For more on SmartStore, see "Ideas 2 Go" in the OcÂtober 2010 issue.)
"Facebook is something that could work out very well in the future," said Ashlock. "But we also need to advertise more inside the store."
Some retailers take educational classes or travel to wine-producing regions to enhance their knowledge, but due to time and financial considerations, most rely on the expertise of wine company representatives.
Salespeople will often provide retailÂers with a no-cost wine tasting for cusÂtomers after the store has purchased a certain number of cases, and many will arrange an educational wine sampling for store staffers when new products are introduced.
"The reps are definitely helpful," said Ashlock, who, like many in the convenience industry, acquired his wine knowledge by working in restauÂrants and retailing. "Theyâ€™re willing to come in and share information."
According to Boysen, the ability to pair the right wine with food and disÂcuss various vintages with customers is essential for a wine retailer who wants to succeed. "We try to make sure we know a lot about what weâ€™re doing," said Boysen. "Iâ€™ve tried every wine on my shelf. It would be difficult to sell wine I havenâ€™t tasted."
Pricing, communications and prodÂuct knowledge are important compoÂnents of a good wine program, but convenience stores have one extra adÂvantage that big box retailers and suÂpermarkets canâ€™t claim â€" convenience.
"People stop here. They get their gas, their cigarettes and their wine," said Mark Whitman, owner of the Seaview Shell Station in Seaview, Washington. "Itâ€™s perfect."
Pat Pape worked in convenience for 20 years before becoming a full-time writer.