It's easy to get caught up in the excitement over the Northeast Brew District, the many new beers on the market, and the wonderful festivals across the state. However, the beer business isn't just taking off in taprooms and at festivals; the booming business is affecting all sectors, notably retail.
In 2011, the Four Firkins opened a craft beer specialty shop in St. Louis Park. The store focuses on providing detailed knowledge of the craft, superior customer service, and, of course, a larger range of tasty and smaller batch beers than most liquor stores about town.
The store recently announced plans to expand from its single storefront to upwards of five locations. They're currently on step one of that plan, raising funds for a second store in Woodbury, and to help them on their journey, they have started an Indiegogo crowd funding site. The Hot Dish talked with owner Jason Alvey about the expansion plans and the challenges they foresee in the market.
Hot Dish: You're planning more than just a second store; you've got a new business plan that will change the company significantly. Tell us more about that.
Jason Alvey: We have always liked the idea of having other store locations. There are three main reasons that multiple locations will help. One, with increased buying power we will be able to offer more competitive prices. Two, we have an amazing team and we want to keep them challenged and compensate them properly so they can grow with the business. Three, we will be able to increase our charitable efforts for the local communities that support us. The more beer we sell, the more we can help our neighborhoods.
HD: What is the primary threat that large companies present to Four Firkins? Is it in price or distribution?
The "walmartization" of liquor stores will not directly affect the Four Firkins. We offer a completely different experience and service and we plan to continue as usual. Large stores like this will be a major threat to other small stores who already compete on only the "discount" model. We figured out a long time ago that devaluing product was not the business model for us. We sell our products for a fair and competitive price and we offer education and customer service to go with it.
HD: Is the fact that the corporate liquor stores are getting more interested in craft beers a good thing for the industry in general?
Not necessarily. If large corporate stores are buying huge quantities of craft beer at a time they may experience product turnover issues. The beer may sit on the shelf so long that it will expire and go bad. Because we operate as a destination store our inventory turns on average 2.5 times per month. Our beer is always fresh! Stale, expired beer is already a huge problem in this industry. Large stores buying giant quantities to get a wholesale discount or just to soak up regional inventory is not going to help the situation. They need to know how to turn it over.
HD: What is your vision of the changing beer market in terms of your expansion, increased corporate competition, etc.?
We will see quite a lot of change over the next few years if these giant outstate big box stores open as many stores as they plan to. There is no doubt that many small liquor stores will sadly go out of business. But there are certainly a number of stores in the area other than The Four Firkins that are offering better shopping experiences through genuine customer service or "experience" and those stores will be just fine.
They better be ready for Sunday sales, though, because you can be sure these outstate liquor stores are going to push for that in a big way. Sunday is the second busiest shopping day of the week and with people so busy I understand and support their desire for the convenience of Sunday alcohol sales. I predict we'll see that law repealed very soon.
HD: Woodbury is your next stop, with five stores in the works. Are either of the core cities in your long-term plans?
Opening in Minneapolis or St. Paul is pretty much impossible at this point. Both of those cities have a rule that a new off-sale liquor store cannot open within 2,000 feet of an existing one, with the exception of a small part of both downtown areas. This distance requirement has been in place for decades and is one of the reasons that beer and wine in grocery stores is just not going to happen. Our next locations will be in surrounding cities and even further out, maybe Duluth for example.
HD: Will your inventory be the same at all the stores or will it vary based on the community?
There will be slight differences. In Woodbury we will be required to purchase from different distributors than the ones that cater to the St. Louis Park area. Retailers are always at the mercy of the distributors. If the distributors don't carry it we can't get it! You will see differences with small self-distributing breweries, too. Some may not have the volume of product or the desire to go that far. For the most part though the stores will have the same great feel and very similar products.
HD: Has the early response to the Indiegogo project gone over as expected?
The response so far has been simply amazing. Everyone who works here is humbled and overwhelmed by the generosity of everyone who has pledged. We talked about crowd sourcing for a long time before we decided to try it. We needed a certain amount of cash for an SBA loan down payment and, being a small business, we just didn't have it.
Our options were either to acquire private investors, which would have meant giving up some ownership, or try crowd sourcing with a platform like Indiegogo. It's an amazing opportunity that even five years ago didn't exist. It allows our friends and customers to really be a part of something special and show their support for something they believe in.
Four Firkins offers weekly samplings from select breweries on Fridays and Saturdays after 6 p.m. This Friday the staff will host a beer release for Ommegang's Game of Thrones themed beers, including staff costumes.