Beer and Wine Now, Liquor to Follow

Sopheak Srunn has nearly $1 million in chips on the table with the hopes his grand bet on Benton County alcohol sales will pay big.

Srunn is converting the old Bob Maloney car dealership at 1902 S. 8th St. in Rogers into a 5,000-SF liquor store, named BJ’s Liquor, and plans to open as soon as mid-October.

Along with the standard offerings of wine, alcohol and beer, Srunn will stock cigars and high-margin craft brews. If sales prove strong, he already has enough space to double his square footage with an adjacent building.

Srunn closed on the $825,000 Bob Maloney property in August after long, difficult negotiations, he said. The building’s interior is in the midst of a $50,000 renovation, which includes the installation of walk-in coolers.

A native of Cambodia, Srunn ran a family-owned liquor store in West Bridgewater, Mass., just south of Boston, for nearly a decade. But he originally came to Northwest Arkansas with plans to open a Shipley Do-nuts franchise.

The donut deal fell through, so an associate alerted Srunn to the possibility of liquor sales in Benton County, approved by voters Nov. 6.

He promptly moved here, made application with the Alcoholic Beverage Control Board and was conditionally approved on July 18. 

He moved his family, a wife and three sons, to Rogers, and his sister soon followed. Ultimately, Srunn’s father will join them.

“I will live here and die here,” said Srunn, referring to his all-or-nothing commitment to the liquor store.

 

Winners and Losers 

Srunn is the holder of just one of the 55 liquor permits authorized for Benton County. While he has selected a big location with plenty of exposure — the average daily traffic according to the four closest Arkansas State Highway and Transportation Department readings is more than 19,000 cars — Srunn will still face intense competition as more and more outlets open.

ABC director Michael Langley said 55 permits equates to “deep market penetration, which makes it hard to make money,” not to mention the 108 beer permits and 75 small-farm wine permits issued to grocery and retail stores, and the dozens of liquor permits already in use in Washington County.

A 3,000- to 4,000-SF liquor store, Langley said, might contain as much as $150,000 in product, meaning it takes a lot of cash to get started in the liquor business. Add to that the pressure to repay rent, mortgages and construction loans, and success in the liquor industry is far from certain.

“I don’t think 55 stores will make it,” Langley said.

Stan Hastings, CEO of Moon Distributors in Little Rock, the oldest distributor in the state, agrees with Langley and says he isn’t convinced the flood of permits will mean an uptick for the bottom line.

“For the most part, it’s just a redistribution of business,” he said. “When Apple invented the I-phone, they created a market. That’s not the case here. There is no new market. You’re just rearranging the pre-existing market.”

To make his point, Hastings cited the Gallup Poll, which shows that over the last 70 years, on average, about 63 percent of the population consumes alcohol.

With that statistic in mind, Hastings said what will happen is those who used to buy at County Line Liquor in Springdale or at Macadoodles in Missouri will start buying at a Benton County location that’s closer to home. In that scenario, there are no new consumers.

Hastings is sure when everything is taken into account a handful of preferred Benton County locations will flourish while others will fail.

“I think it’ll be tough for 55 stores to open and survive,” he said.

 

New Market

Joseph Post, vice president of sales at the state’s largest winery, Post Familie Vineyards in Altus, said recent developments in Benton and other counties have been a boon for the family business.

“It’s forced us to ramp up a little,” he said, referencing the new hire of route salesmen, cellar hands and bottlers. “Never have our tanks been so empty going into harvest.”

Among the varietals offered by Post are chardonnay, merlot, cabernet sauvignon, chambourcin and its signature product — muscadine.

Post has a presence across Arkansas, in neighboring states and even internationally. But opening new doors in Benton County has been unique and rewarding for Post.

“There’s nothing like growing your own business in your own back yard,” he said. “I’m excited about selling wine in China and juice in Beijing, but there’s nothing like exposure so close to home.”

In addition to Benton County, retail liquor sales were approved in recent years in Boone, Clark, Madison, Marion and Sharp counties.

Benton County equals all of them combined.

“We’re happy about seeing Benton County go wet,” Post said. “We’d like Faulkner and Pope counties to go wet, too.”

Post Familie, like other wineries in the state, is enjoying a sustained upward trend in wine consumption in Arkansas and across the United States. Tax records from the Arkansas Department of Finance and Administration show the levy on wine wholesalers has grown by 75 percent, from $1.6 million in 2002 to $2.8 million in fiscal 2013.

Nationally, wine sales are at a record high — $34.6 billion in retail in 2012 — and the United States is the largest wine market in the world, according to the California-based Wine Institute.

When it came time to satisfy the wine drinkers of Benton County, Post had little trouble meeting the need.

“As soon as they had their licenses, we had our wine in their stores within a week,” said Post, referring to retailers like Wal-mart Stores Inc., Harps Food Stores Inc., Kum and Go, White Oak Station, Casey’s General Store and E-Z Mart.

 

Poised For Growth

Budweiser might be known as the King of Beers, but it’s not the king of Benton County. Bud Light is.

That’s the word from Anheuser-Busch, which operates as A&B Distributors of Arkansas Inc. from a 28,500-SF facility on North Second Street in Rogers.

On the strength of Bud Light and its assortment of domestic and European brands, Anheuser-Busch is looking to lay down permanent roots.

“We’re here to stay,” said Chris Tillman, A&B’s director of sales and operations.

Since January, A&B has rustled up 165 accounts, has hired as many as 40 people and is already looking for a location to build a new facility. It’s all part of the five-year master plan.

“Once we know what the sales will be, we’ll build from the ground up,” Tillman said.

As A&B establishes its network in Benton County, so are its competitors. Glazer’s Inc., one of the largest beer and alcohol distributors in the United States, hired more than 20 people and expanded its facility in Tontitown. Premium Brands hired 25 people and is looking to explore the potential of craft beer, high-alcohol beer and obscure brands.

The A&B team includes a Spanish-speaking salesman with a particular emphasis on Rogers, which according to the 2010 U.S. Census, has a Hispanic population of 17,619, or 31.4 percent of the overall population of 55,964.

The first outlet to sell beer in Benton County was Walmart, which started on January 17, as soon as legally possible, said Walmart spokesperson Danit Marquardt. She added that nationally, Walmart is “investing in the category — more space, more licenses with local market pricing to grow the business.”

After the world’s largest retailer inaugurated the era of off-premises alcohol sales in Benton County, a list of familiar names soon followed — Harps, Kum and Go, White Oak Station, Casey’s and E-Z Mart.

Tillman would not comment on exactly how much beer A&B is selling in Benton County. But when asked about volume, he simply grinned and said, “It’s good.” 

The A&B footprint in Benton County is already big, but it’s expected to become much bigger — as is the case for Moon, Premium and Glazer’s. Dollar General has an application with the state of Arkansas for 16 beer permits, and more restaurants and clubs are expected to open. The big push, however, will come at some point in the future when liquor stores like Srunn’s start sprouting up.