Ambassador Wine and Spirits: Retailer Focus

August 27, 2015 2 Comments

What does it take to succeed in NYC?

At the corner of 54^th St and Second Avenue you’ll find my favorite spirits and wine shop. It’s close but not exactly in my neighborhood but I go out of my way to shop there. It’s arguably the best in Midtown.

If you live in Manhattan, chances are there’s a store up the street, around the corner or, a block over. There are “destination” shops like Astor, Beacon and others so I suppose Ambassador fits this genre – well worth going out of your way. Besides, they deliver. But before I talk about them, let’s spend a few minutes on the New York retail scene.

Only in New York

It’s a complicated market at all levels of the Booze Business.

As recently as the 1980s, there were over ten significant distributors. Today there are only two main players. While the gap has been partly filled with wine and beer distributors moving into spirits, the market is in a state of limited competition aka as an oligopoly. In short, the wholesalers call the shots.

A consumer living in the boroughs other than Manhattan can purchase most alcohol products for less than in “the city.” Lower overhead is the main reason.

Thanks to state tax differences, for many consumers it makes more sense to go across the river to New Jersey if you’re looking to stock up, particularly spirits. The difference in state excise taxes is almost a dollar per gallon –$6.44 in NY vs. $5.50 in NJ.

(I used to joke that a car coming to NY from NJ whose trunk was much lower than its hood probably was either a small New York State bar owner stocking up or someone having a party.)

So imagine you’re a retailer in Manhattan. Your rent is high; you have to compete with many businesses for qualified employees; your customer base (in the midtown area) has changed, with LLCs buying apartments that are frequently unlived in; and the guy down the street is selling the same brand as you for less.

It’s not a level playing field

There’s a rule in NY State that only a single individual can hold a license to sell wine or spirits at retail. Its origin has to do with preventing chain liquor stores from doing business in the state. But guess what? It doesn’t stop retailers from opening other stores in the names of their family members.

So, when a distributor has a multi-case discount, the sole proprietor store can’t take advantage of it but the stores “owned” by cousins, sisters, in-laws can. In short, that’s how many NY State stores beat the system.

This is the environment in which Ambassador Wines & Spirits operates.

The Ambassador Story

Leonard Phillips. owner — Leonard Phillips.

Meet Leonard Phillips, the owner of the store and whose family has been in the business since 1973. It started as a small shop run by his grandmother that has grown to the current 1400 square feet store on two levels.

Leonard’s original calling in life was to be a biochemist and ultimately become a physician in the military. However, as we all know, life has a way of getting in the way of plans and dreams. But if you spend five minutes with Leonard you quickly realize that his passion and tenacity is what has makes Ambassador unique.

Here’s why I think the store is special

This is not the place to go to buy the popular vodka and expect a discounted price. It is the place to go where you will find new or extraordinary products that appeal to the spirits enthusiast and aficionado. Their selection of whiskies (particularly scotch and single malts) is unbelievable.

In fact, if you’re a follower of this blog, you know that I love the whiskies and gin from Koval Distillery. All their products are available at Ambassador, which is how I came to the store in the first place.

Their wine selection is also second to none. But, interestingly, thanks to the whiskey and craft spirits explosion, wine as a percent of volume has gone from 80% to 65% in the last 3 to 4 years.

In addition to wine and liquor, their selection of Sake, Soju and Sochu is, in my opinion, the best in NYC. If you’re looking for hard cider this is the place to go. And, while you’re in the store check out their champagne and sparkling wine selections.

There is even a room downstairs for tastings and education either conducted by companies or groups of friends wanting to discover new and interesting products.

Hey, don’t take my word for it. Go to Yelp and check them out. Not only did they get 4.5 out of 5 but also the comments left by reviewers are amazing.

It’s about the people

Most of the reviews on Yelp talk about the knowledge, helpfulness and friendliness of the staff. In most wine and spirits shops I’ve gone to around the country over the years, most should have the slogan, “shut up and buy.” This is a store whose service orientation matches their style of business – personal recommendations based on knowing the customer and the products they sell.

* * *

When I asked Leonard about how he copes with the peculiarities of doing business in New York City his response was mixed. On the one hand, as a true sole proprietor store facing competition from multi-owned stores and their ability to deeply discount, he describes the situation as akin to being a “one legged man in an ass kicking contest.”

At the same time, or perhaps as a result, he views Ambassador Wine and Spirits as a Dylan’s Candy store for adults.

An article in Serious Eats sums it up nicely:

Ambassador is the liquor store I wish I had in my neighborhood; you find yourself wanting to hang out there, even if you don’t really need to buy anything.

My kind of store.

Leonard and Schlomo. He may look intimidating but he's the friendliest pup. — Leonard and Schlomo. He may look intimidating but he’s the friendliest pup. Schlomo, that is.

Alcohol and Marijuana: Latest Gallup Polls

July 30, 2015 No Comments

Income and education are key factors

The Gallup people have just released their latest annual survey of drinking in America as well as a poll on marijuana trial and usage. Gallup has conducted the alcohol survey every year since 1939 and the marijuana poll has been running since 1969.

Some key findings:

Overall, 64% of Americans say they drink alcohol – unchanged over the years.
Upper income and highly educated Americans are most likely to say they drink alcohol.
Beer is the most widely preferred drink.
More than 4 in 10 say they have tried marijuana with 10% claiming to be current smokers as compared with 7% two years ago.

Alcohol and drinking over the years remains consistent

Gallup has been asking the same question over the years – Do you have occasion to use alcoholic beverages such as liquor, wine, or beer? The proportion saying yes has remained consistent – 58% in 1939, in the 60% area since then and 64% in 2015.

The form of alcohol Americans most often drink remains fairly consistent with the past. 42% report beer most often, 34% say wine and 21% favor liquor.

Socio-economic status and drinking correlate

This year’s analysis focused on education and income as it relates to who drinks. In a nutshell, upper income and higher educated Americans are more likely than others to drink. They postulate that upscale Americans have more opportunities for drinking occasions such as dining out and going on vacation. Sounds right to me. But I don’t think that’s it entirely.

What I found most interesting is that nearly half (47%) of those with incomes over $75,000 are more likely to have had a drink in the past 24 hours. Among college graduates it’s 45%. So there’s a fair amount of at home drinking.

They also asked about overindulging and there were no difference by income level. But, there were significant differences by education with college graduates less likely to report being “over served.” They offer two explanations. One is that “those with more formal education may be less willing to report a socially undesirable behavior in a public opinion survey.”

The other is “Data from various government and academic studies confirm the relationship between income and alcohol consumption. The studies also indicate upper-income drinkers mostly drink in moderation, but lower-income Americans tend to abstain completely, or to drink heavily.”

Type of alcohol

As mentioned, beer is the dominant type of alcohol consumed, but before you beer folks start high-fiving, consider the growth in craft beer and the decline in mainstream beer brands. In fact, those with higher incomes are equally as likely to drink beer and wine most often.

Marijuana trial and usage

Earlier in the month Gallup reported on a poll that delved into cannabis experimentation and current use.

As the chart below reveals, the percentage of Americans who say they have tried marijuana has steadily increased since the first measurement in 1969 – from 4% to 44% in the span of less than 50 years.

Legalization in some states plus the growing support for legalization is an obvious factor. In a study conducted in 2014, Gallup found that overall 51% of Americans favor legalization, Conservatives and Republicans are more likely to be opposed and those in states in the East and West are the biggest supporters.

Finally, the recent Gallup study on marijuana shows that 1 in 10 Americans said yes and this is up from 7% two years ago.

Is there any doubt that marijuana legalization will continue and that usage will as well?

The Northwest News Network (a collaboration of public radio stations in Washington, Oregon and Idaho) reported this week that Washington’s Liquor Control Board is getting a new name. It will become the Liquor and Cannabis Board.

Portends of things to come.

Casa Dragones: Tequila with a Pedigree

July 17, 2015 1 Comment

When passion and expertise meet, extraordinary tequila emerges

Bob Pittman, a tequila aficionado and Bertha González Nieves, a certified tequila expert and first woman to be named Maestra Tequilera by the Academia Mexicana de Catadores de Tequila, founded Casa Dragones in 2008. At $275 per bottle, it is both exceptional and aspirational.

As the story goes, Bob Pittman (founder of MTV, CEO of Clear Channel) has spent many summers in San Miguel de Allende, where he has a home, and over the years became a true tequila lover. In 2007, he and Bertha met at a party and talked about their mutual passion for tequila. Bob shared his dream of creating one. Bertha told him that she always wanted to become an entrepreneur. Together they set on a quest to deliver a true sipping tequila, smooth enough to sip, with no “wince factor.” A short time later, the two founded Casa Dragones.

Bob Pittman and Bertha Gonzalez Nieves

I don’t know Bob Pittman but I know Bertha González very well. She and I worked together when she was the Commercial Director North America for Jose Cuervo International and I was a consultant/advisor to the company. Actually, Bertha had a number of positions at JCI, under the leadership of Carlos Arana, including business development, new products and brand management. In short, she knows tequila and how to run a tequila enterprise.

While at JCI, I marveled at her ability to balance the whims of the Beckmann family (owners of Cuervo) and the arrogance of Diageo (distributors at the time). Clearly Bertha’s wit, intellect and charm came in handy.

Here’s an example – when asked in an interview a few years ago whether anyone ever mixed anything with Casa Dragones, Bertha’s reply was, “not in front of me.”

The Product

Casa Dragones Joven tequila

I guess the first thing everyone says about the original Casa Dragones tequila is the price tag. If you’re a particular type of spirits consumer, it’s worth it. It’s a 100% Blue Agave Joven Tequila, crafted in small batches. Joven tequila is a rare blend of silver tequila and extra aged tequila. It’s a style rarely used and it took both Bertha and a master distiller, coaxed out of retirement, over a year to perfect the blend.

So, it’s tequila to be sipped and savored and never, ever mixed. Trust me, it’s not like any other tequila you’ve ever tasted. But don’t take my word for it – Wine Enthusiast gave it a 96 and here is what Tequila.net had to say about it.

From the soil to the Agave plant to the craftsmanship to the bottle – this is not tequila to use in a margarita or even as a shot. Like the lady said, sip it.

But, if you must drink your tequila in a cocktail, they have recently introduced Casa Dragones Blanco, 100%Blue Agave silver

Casa Dragones Blanco

tequila designed to be served on the rocks or in signature craft cocktails developed by leading chefs and mixologists. Cocktails like San Miguel, Pink Panther and my favorite, Michelada Primaverde, described on the website as follows:

James Beard Award Winning Mixologist and Owner of New York City’s P.D.T (Please Don’t Tell), Jim Meehan has created the Michelada Primaverde exclusively with Tequila Casa Dragones Blanco. A mixture of dry vermouth and tomatillo juice is complemented perfectly by a splash of Victoria beer and a spicy, salted rim for a refreshing, summer cocktail.

The Blanco sells for $75 for a 750 ML. Feel better now?

It’s All About Mexico

As to the heritage, the elite cavalry that helped spark the Mexican independence movement inspires the name. La Casa Dragones, the original 17th century stables still standing on a street in San Miguel de Allende, is the spiritual home to the tequila.

What makes Casa Dragones especially unique is that it is thoroughly Mexican. A product that comes from the lowlands and the rich soil of the Trans-Mexican volcanic belt; a formula based on the merging of the traditional art of tequila making combined with an innovative process; a product designed for a consumer who is looking for quality and authenticity. It’s the real deal.

Bertha

It’s also about Bertha Nieves González and her passion for tequila and innovation. So add her to the list of Booze Business’ Shaker’s and Stirrers – the new breed of alcohol industry entrepreneurs.

Just don’t let her catch you drinking the Joven product with a mixer.