California Chain Raley’s Aims To Burnish Beverage Alcohol Credentials
With 119 stores in California and Nevada—all of which sell beer, wine, and spirits—supermarket chain Raley’s has a well-developed reputation for showcasing beverage alcohol and educating customers on its selection and food-pairing options. Privately owned, Raley’s doesn’t release sales figures, but beverage alcohol accounts for 7.5% of annual sales, and ranks among the chain’s top five product categories.
According to Cody Thornhill, senior category manager of alcohol at Raley’s, wine comprises 36.5% of category sales, beer 31.5%, spirits 27%, and RTDs 5%. While still the largest subcategory, “wine is losing share,” he notes, “and beer is trending down. Instead, people are switching to spirits, particularly RTDs.” Indeed, combined share of spirits and RTDs at Raley’s—which also encompasses the Bel Air and Nob Hill Foods banners—has recently surpassed beer.
Raley’s offers approximately 1,300 wine SKUs, priced from $2 for a single can to $170 for a 1-liter bottle of Caymus Napa Valley Cabernet Sauvignon, according to Thornhill. The sweet spot for wines at the stores is between $14-$24 a 750-ml., but he concedes, “it’s trending down as consumers trade down,” amidst inflation.
Chardonnay is the most popular varietal, accounting for nearly a quarter of the chain’s wine sales. Cabernet Sauvignon comprises 14%, Thornhill says, and Sauvignon Blanc is gaining share. While most wine segments are in decline, he notes, “non-alcoholic wine is the only thing that’s trending positive.” Alternative packaging is another bright spot, with 5-liter, 187-ml., and 500-ml. packages on the rise. To merchandise the non-traditional packages, Raley’s stores feature 5-liter box sections and “picnic wines,” such as single-serve cans and wine-based cocktails.
About 1,200 beer SKUs are offered at Raley’s, ranging from $2 for singles to $30 for multi-packs. Thornhill notes that the chain benefitted greatly from the craft beer boom, but with category sales now on the decline, overall beer sales at its stores have been impacted.
Spirits have become a bigger focus at Raley’s. The stores offer about 600 spirits SKUs, priced from $1 for some 50-ml. bottles to $200 for a 750-ml. of Crown Royal XR Canadian whisky. “But we do receive many higher-dollar allocated items,” Thornhill notes. “Recently, we carried Weller Millennium, which retailed at $5,500. We also sold a 25-year-old Eagle Rare for $10,000.” Tito’s Handmade vodka ($38 a 1-liter) is the No. 1 spirits brand at the chain, with whiskies like Jameson ($27 a 750-ml.) and Buffalo Trace ($28) also top performers.
“In general, with spirits, we’re seeing a lot of trading down,” largely to $30 a bottle and below, Thornhill notes. “People are just looking for value right now.” RTDs offer that value and have performed very well at Raley’s. High Noon ($21 an 8-pack of 12-ounce cans) remains its top-selling RTD, but Cutwater ($14 a 4-pack) and Long Drink ($14 a 6-pack) are on the rise. “High-abv RTDs are driving the category as people want bang for their buck,” the retailer says.
Single-barrel offerings are quickly distinguishing Raley’s from other grocery chains. Raley’s partners on about 50 different single barrels a year, Thornhill notes, including the likes of Buffalo Trace and Elijah Craig, and more obscure offerings like Holladay Distillery.
A self-described whisk(e)y nerd, Thornhill is proud that Raley’s is receiving increasing access to allocated spirits and is known to mark the products up fairly. “We’re showing our customers that you don’t have to pay secondary market prices to get these products,” he says. Raley’s receives monthly allocations of products like Blanton’s and Eagle Rare, and the supply often runs out in about four days. “We have a lot of whisk(e)y nerds in our stores,” the retailer says. “Our goal is to attract more.”
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