Champagne tastings and cheese platters: How bottle shops are competing with online

Bottle shops are offering wine tastings, masterclasses and turning into bars to compete with online alcohol retailers and declining rates of drinking.

Large retailers are also following the lead of independent bottle shops by stocking higher quality wines, beers and spirits and products with no carbs or sugars and alcohol-free or low-alcohol to cater for changing consumer tastes.

The annual champagne tasting at Prince Wine Store in Zetland is the highlight of its events calendar.Credit:Louie Douvis

Vintage Cellars plans to open a bottle shop in Potts Point that will include a wine bar, while Dan Murphy wants to open a premium outlet in 2023 at the site of the Lindt cafe siege in Martin Place.

Vintage Cellars already operates a bottle shop with a bar in inner-city Melbourne where customers can order a cheese platter or charcuterie board while they drink.

“With wines available by the glass, or by the bottle with a small corkage fee, as well as craft beers or flights of gins and whiskies, the concept store offers a great experience for customers,” Vintage Cellars business manager Ed Scully said.

Scully said there was a growing demand for local, boutique and craft wines, beers and spirits.

Dan Murphy’s premium outlet The Cellar in Lane Cove hosts regular wine tastings for its customers.Credit:Louise Kennerley

“While certain customers are drinking less, they are looking to drink better quality drinks, driving a trend in premiumisation,” he said.

Scully said there was also increased demand for products with low and no alcohol and low and no carbs or sugars, convenient on-demand delivery and experiences such as tastings.

Dan Murphy’s premium outlet The Cellar in Lane Cove hosts regular masterclasses and winemaker-hosted tastings. Its staff have been sommeliers or worked in wineries.

Dan Murphy managing director Agi Pfeiffer-Smith said the Lane Cove store is kept at a brisk 17C degrees, which is considered the ideal temperature for storing red wine.

“It also features state-of-the-art wine cabinets for storing other varieties at their ideal temperatures and enomatic machines to enable tastings of premium wines,” she said.

IBISWorld estimates there are about 2270 bottle shops in NSW – up from 2150 in 2017-18 – and 2350 in Victoria, which is similar to five years ago.

Endeavour Drinks, owner of Dan Murphy and BWS, has a market share of 41 per cent compared to 16.5 per cent for Coles, owner of Liquor Land, Vintage Cellars and First Choice Liquor Market.

IBISWorld senior industry analyst Matthew Reeves said liquor retail sales “took off” during COVID-19 lockdowns, increasing 12 per cent in 2019-20 to $13.7 billion and a further 15 per cent the following year.

But Reeves said online alcohol sales have “significantly hampered” growth for bottle shops, rising at an estimated 21 per cent in the past five years compared to 7.5 per cent for the overall liquor retail industry.

An annual champagne tasting is one of the events held at the Prince Wine Store in Zetland.

The store also hosts masterclasses with winemakers showing a selection of wines paired with cheese and charcuterie, weekly tastings and wine dinners showcasing a region or producer.

“We hold events as a way of connecting with our existing customers in person while also welcoming new customers into our business,” store manager Patrick Diggins said.

He said customers were more health conscious, drank less and shopped based on their values: “I often get asked questions about preservative-free, vegan, and alcohol-free or low-alcohol wines, beers and spirits.”

Diggins said the closure of pubs and restaurants during the COVID-19 crisis had changed how many people buy alcohol.

“I’ve seen a trend in customers being more open to supporting local businesses, winemakers and suppliers when they’re consuming alcohol at home,” he said.

P&V Wine + Liquor Merchants in Paddington allows customers to choose a bottle of wine from its shelves to drink in the store’s wine bar and restaurant. Its sister outlet in Newtown includes an “education space”, with classes ranging from Eastern European wines to gin masterclasses.

Co-owner Mike Bennie likens his bottle shops to the experience of shopping in a delicatessen where it’s “quite hands-on and community focused”.

Bennie said the P&V stores had become destinations for customers “crossing the bridge” or travelling from regional areas to enjoy “a tactile, personal experience before they purchase a single thing”.

“Education underpins everything we do and experience is paramount,” he said. “The product range being unique requires explanation and expertise anyway.”

He said customers had become increasingly interested in the provenance and process of what they eat and drink since the COVID-19 crisis and concerned about sustainability and organics.

“I think the decline in alcohol consumption can be keenly matched to people drinking better, but less,” he said.

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