Tuesday, March 10, 2009

Scott Osborn Speaks Out about Wine Sales in NY Grocery Stores

I received an email from Scott Osborn, President of Fox Run Vineyards, expressing his support for the proposal that wine sales be allowed in grocery stores in New York, which is in direct opposition to the stance taken by many other New York wineries. This is an important issue for New York wineries. Some may call it copping out, but I have not taken a position in this debate because I just do not get a good sense of what the "real" outcome of the proposal will be. But I do believe the reasons for and against should be aired. Make no mistake, there will be winners and losers when this issue is decided.

I do support the mom and pop liquor stores that are toiling to survive in a challenging economy and I also support the farm wineries that are looking for new markets in which to sell the products. And perhaps most importantly and the group that sometimes gets lost in these debates, I support the wine consumer who deserves both the personal service and knowledgeable advice they get from the smaller liquor stores and the wide range of choice and perhaps lower prices they might get from larger grocery stores. The problem is that no one can know for sure what consequences, intended or unintended, will actually result from enacting this proposal.
We can all speculate and the lobbyists for each group can shout the doomsday scenarios from every side of the issue, but in my small brain, I just wonder why we can't come up with a way where everybody wins. I guess I am naive to think that way. So I am posting Scott Osborn's case for support of wine sales in NY grocery stores today and I will also present the opposing view in another post.

President: Scott Osborn

A Statement to fellow New York winery owners:

Many of you are aware that I have spoken out publicly in support of the Governor’s proposal to allow wine sales in grocery stores in New York State .

During the last month, I have heard from many individuals in the trade who have had a negative reaction to this position and I suspect there are many others who are wondering why I would take this stance publicly and put my business at risk with the liquor stores, so I would like to explain my position to my fellow winery owners because I believe in your heart of hearts, you will agree with me.

Most importantly, I want to be clear that I do not believe I am trying to “put liquor stores out of business” by exercising my right as an American to advocate for what I believe will be helpful to my business. If the liquor store associations have the right to speak their mind, why shouldn’t I? My position does not mean that I do not value the business relationships that I have with liquor stores that sell my wine. I consider the owners of NYS wine shops that have supported the sales of my wines for many years to be business partners and I am deeply appreciative of the sales and support they have provided for Fox Run wines the past few years.

However, we have all been struggling in this industry for several years now. I honestly believe that the Governor’s proposal is a necessary step in the right direction.

Let’s take a look at how the liquor store industry and the NY wine industry have progressed over the past 25 years. Back in the early 90’s there were only about 125+ wineries in the state and almost 5,000 liquor stores! Now we have over 250 wineries and approximately 2600 liquor stores. This trend is continuing and at the current rate in 10 years there will only be 1500 liquor stores in NY. SO let me ask you this…how much shelf space do you think NY wines will have then? We have to look at where we are going to sell our wines not only as individual wineries but as a wine industry made up of small, medium, and large producers. What is good for our industry’s growth?

Here is the way I see it.

If we as an industry allow this proposal to be defeated we will be committing economic suicide and this why.

Here in the Finger Lakes , the amount of new wine visitors to our tasting rooms is flattening out (which started before the recession), but we are seeing about a 10% a year increase in the number of new wineries opening. Our industry cannot sustain these increases in wineries with out a major loss of income to the existing wineries because now we are sharing customers with out attracting enough new ones to our tasting rooms. In the near future when you can’t sell your entire inventory at your own tasting room, what are you going to do? How many liquor stores are going to carry more NYS wines?

The newer wineries who have opened in the last 3 years or so have not had the challenge yet of trying to get a liquor store to carry their wines. It is not easy and one gets far more, not interested, than any that will even consider it. It took me 2 years to get any of my products into a liquor store. All of you folks that have been around a while know exactly what I’m talking about. There simply is not enough interest from the liquor stores to sustain all of us now, let alone a growing industry.

Don’t misunderstand! I want all these new wineries to open because it brings diversity and enhances our regions as wine producing areas. But…We need new outlets! Think about this! Do you want to still be struggling 5 years from now! 10? Those of you who have been in this for longer then 10 years remember when the liquor stores wouldn’t carry your wines because, as the liquor stores always reminded us, there was no demand for New York wines. Remember that? Remember how we spent tons of money marketing our wine trails in order to get visitors to our tasting rooms and create interest in NY wines. The only reason any liquor store carries our product is because the customers we created went into those stores and started asking for our wines. Why? It is called consumer pull through. Our tasting rooms were the driver to get these stores to take our wines and then support us.

The amount of shelf space is not going to increase. With the exception of a few stores the vast majority of liquor stores are not going to expand their New York wines section at the expense of their Australian, Californian or Chilean sections. What I find the most frustrating about the big Liquor Store Lobby is that they claim local wineries will be put out of business because grocers will only carry the popular wines from out of state. What I say to them is; show me a store in NYC that carries my wine or has a good selection of NY wines! I’ve tried they won’t take me. It doesn’t matter how good my product is or that I’m from NY. They have no pride in the wines from their own state and yet they point the finger at others. Shame on them. I know my wines can compete. There are grocery stores that sell my wines outside this state and yet the liquor stores have the audacity to say my wine can’t compete at grocery stores in my own state.

We will never have access to the NYC market; the largest wine market in the world unless we have more outlets and can do business with others that have an interest in supporting NY product. We don’t need to fill every shelf and some of us are still growing and not ready yet. But when you are, you deserve to have options.

For me, the bottom line is simple: We need the Governors proposal to happen so we will have more outlets to sell our wines, so our industry can grow and sustain itself. I know better then anyone the risks of publicly supporting this controversial measure, but I am willing to take those risks in order to build a better future for my family, my beloved winery and our New York wine industry.

I invite and encourage you to join me by contacting your local Assemblyman and Senator. Tell them you support the Governor’s proposal to sell wine in grocery stores. We need you to do this today!


Scott Osborn
Fox Run Vineyards, Inc.

1 comment:

Ron Dougherty said...

A great THANK YOU to Scott Osborn, John Martini (Anthony Road Wine Co.), Doug Miles (Miles Wine Cellars) and their families for their courage in publically taking a stand and fighting for their and OUR(the consumers) right to choose.

The Liquor Lobby is quick to cry "the liquor stores will go out of business!!". This conveniently overlooks the fact that in every state which changed their laws to allow wine sales in food stores there are now more liquor stores than there were prior to the law changing. The liquor stores THRIVE, not die, in these states.

This proposal is good for the state, good for the wineries, good for the consumer and yes ... good for the liquor stores.

To learn more about the facts and support this proposal, go to http://apps.facebook.com/causes/226154 and join the Cause!