There’s been a buzz around town, whispers that the Asheville Alcoholic Beverage Control Board’s warehouse has been expanded. To the average person that might not be a very big deal, but to bartenders and restaurateurs, it could mean increased availability of and dependable access to some spirits that can be hard to acquire.
North Carolina is a control state, which means the sale of alcohol is state-regulated. The entire supply flows through a central warehouse in Raleigh before being distributed throughout the Tar Heel State, and that pipeline often leaves bartenders wondering what happened to specific brands and labels they requested when their orders arrive. There have been months of drought for brands like Buffalo Trace bourbon, for example. So rumors of the warehouse expansion have triggered hopes that help is on the way.
But as Jason Thacker, the board’s operations manager, points out, it’s best not to count those chickens before they hatch.
“Over the years, we’ve just outgrown the warehouse that we are in,” he explains. “When I first started here back in 2002, we were probably doing $14 million in sales, but we’re planning on doing $30 million this year.”
An increasingly diverse line of available products and a massive spike in by-the-drink sales at bars and restaurants have combined to force the local board’s hand in meeting that demand. In February, the board began renting a 7,800-square-foot building owned by Moog Music, substantially increasing the 18,000 square feet of capacity that’s served the Asheville area for a couple of decades. But the motivation wasn’t simply so the board could stock more of the trendy brands bartenders want. The real cause is a strategy that’s much foxier and thriftier than that.
Beefing up the bottom line
In 2015, the Asheville ABC Board grossed over $28 million in sales, ranking it among the highest-grossing in the state. A significant amount of that money, however, went to pay for things like purchasing the product and paying employee salaries. And once the expenses are covered, the profits flow to various entities, including local governments. Between July 1, 2014, and June 30, 2015, the ABC board gave $2.4 million to the city and Buncombe County, and in the first two months of 2016, it’s paid them almost $1.5 million more. That money goes directly into those governments’ general funds. Another $155,000 funded grants for alcohol education and rehabilitation.
If you make your money selling alcohol, then it stands to reason that selling more of it at a more favorable price will generate greater profits. As Thacker explains it, “Getting this extra warehouse space is allowing us to do some buy-in.” The ABC Commission in Raleigh controls the price of spirits — and, in conjunction with national distributors, mandates periodic statewide sales on certain brands. To take advantage of this, the Asheville board has started buying those brands en masse when they’re on sale, so it can sell them at the regular price after the sale ends. “The half-gallon bottle of Burnett’s [Vodka] goes on sale for three months and then goes off sale for three months, and it does that year-round,” Thacker explains. “Well, if we can forecast that correctly, to where we can buy a three-month supply at the sale price, then every bottle we sell for three months when it’s back at a higher price, we’re making two more dollars a bottle.”
Those kinds of thrifty decisions and business savvy have already caused significant growth in the nonprofit’s revenue. “In the first month, we made an extra $14,000 just by doing the buy-ins,” Thacker reports. “So if you average that out over the course of the year, you’re looking at over $200,000 just by getting some extra warehouse space.”
Good news, bad news
But while that’s good news for the city, it still doesn’t guarantee access to the kinds of booze the region’s bartenders and cocktail mavens have been asking for.
“It’s still going to be hard to get the high-demand products and stockpile them, because Raleigh allocates how much of it we can get when it comes to items like Buffalo Trace,” notes Thacker. “But we shouldn’t have the problems we’ve had in the past, like running out of Maker’s Mark or Jameson or Absolut. I just don’t want the bars to think we’re going to have 100 cases of Buffalo Trace down there.”
At the end of the day, putting money into city and county coffers is a key part of the ABC Board’s mission, Thacker stresses. “The more we make on these buy-ins, the more money we get to give the city and county. That’s the main thing.”