Liquor Stores N.A. Ltd. boasts an unparalleled amount of experience at the executive and management level. The company was established in 2004 when Director Irving Kipnes’s Liquor Depot and Board Chairman Henry Berezinicki’s Liquor World merged after the two men had operated their own alcohol businesses for a combined 22 years.
However, COO Scott Morrow understands that employees who work in his company’s retail locations and distribution centers are the reason for Liquor Stores N.A.’s success.
“At the end of the day, this is a people business, so we have to maintain and attract good people at the store level and in the office, as well,” Morrow says. “It’s something that if not focused properly on could be a barrier to our future growth.”
That growth is bound to be great considering Liquor Stores N.A.’s commitment to aggressive expansion through acquisitions, mergers and greenfield development. In 2004, Liquor Depot and Liquor World had 50 locations in Alberta. Today, the company has 250 stores.
Along with domestic expansion into British Columbia, Liquor Stores N.A. penetrated the U.S. market by purchasing the Liquor Barn chain in Kentucky and the Brown Jug chain in Alaska.
The U.S. and Canadian alcohol industry varies greatly state by state and province by province, and Morrow says the success of companies such as Liquor Stores N.A. depends on their understanding of various laws at the state, county and municipal levels.
For instance, there’s no point in attempting to penetrate states like Pennsylvania, where alcohol distribution is 100 percent state-controlled. However, in a state such as Kentucky, the intricacies of the laws – distributors cannot transport alcohol beyond their county’s borders, for example – are best navigated by people who already know the local regulations.
“When we bought market leaders in Alaska and Kentucky [we] left the management teams largely intact,” Morrow says. “In Alaska and Kentucky, scale matters because there are discounts for scale in those states. Since we were buying a chain with built-in scale, it already gave us an advantage to capitalize on and build out from there.
“We acquired goodwill and kept that goodwill in place,” he adds. “We kept the same management teams since the day we acquired these businesses because these are strong operators who know the history of the economy and challenges in their own state.”
Despite having that expertise already in place, Liquor Stores N.A. focuses heavily on training, as well. At the retail level, Morrow says the company is considered an industry leader in social responsibility training for sales of beer, wine and spirits.
The company also trains its employees for product expertise not just to create a knowledgeable salesforce, but to retain the best and the brightest employees. This is especially important in Alberta, where the unemployment rate hovers around 4 percent and competition for employees is stiff because of the opportunities related to the oil and gas markets.
“We are trying to create job enrichment for folks at the store level,” Morrow explains. “We still have to be competitive in salary and how we enrich people’s roles.”
In fact, Morrow says Liquor Stores N.A. invests more in training of its field staff than its competition does of its own employees. “We spend a lot more with agents and suppliers on training, as well, In addition, we have online industry training in beer, wine and spirits and selling skill,” he says. “By getting product knowledge to our staff, we’re better able to sell product and talk to customers and engage better.”
In fact, the company gets many of its ideas from surveying its field staff, Morrow says. Many of the ideas revolve around product selection and displays.
Young and Nimble
Morrow says Liquor Stores N.A. has grown as quickly as it has by nurturing an entrepreneurial spirit at all levels of operations. This starts at the top with Kipnes and Berezinicki, who still sit on the board of directors and keep a culture of open communication with employees.
“This allows us to look at issues and challenges from a lot of different angles,” Morrow says. “We don’t have a lot of layers. I’m out in the streets myself a fair amount, and I learn a great deal about the business from talking to our front line employees. I’m out in the field talking to people because the best ideas come from store folks.”
In the future, the company will focus on its Wine and Beyond concept. These large-format liquor stores will range in size between 20,000 and 25,000 square feet with a strong focus on wine. The stores will have 6,000 wine SKUs in stock, and about 50 percent will be either private label items or exclusives to Wine and Beyond locations. They also will carry 2,000 spirits and beers, 20 percent of which will be private label or exclusive items.
So far, Liquor Stores N.A. has opened two Wine and Beyond locations in Alberta and has opened one each in Danville and Bowling Green, Ky., in addition to its 250 stores in Canada and the United States.
“This is the format we will utilize for future expansion in the United States and select markets in Canada,” Morrow says.