Doubling Liquor License Allotment In Massachusetts

A 2022 ballot proposal seeks to change the liquor license industry as we know it – but in a staggered, controlled fashion. Although there are a few components to the proposal, the most impactful portion of the ballot question proposes to increase the number of licenses available to retailers from the current allotted nine to 18. This proposal comes on the heels of Cumberland Farms unsuccessfully pursuing an unlimited number of beer and wine licenses for food and convenience stores, which created quite the buzz in the liquor license world. Although similar in nature, this new proposal requests additional, not unlimited, liquor licenses, which may lead to a warmer reception than the one the Cumberland Farms proposal met, as this proposed increase is gradual in nature.   Currently, each corporate entity or individual is limited to a maximum of nine total alcohol licenses, including both wine & malt licenses and all-alcoholic beverage licenses.  All nine of these licenses can be all-alcoholic licenses as of now, a ratio that would change under the proposed plan.

This proposal offers a staggering increase of this allotment, which would be laid out like so, according to a recent State House News Service report:

-Increase to 12 licenses in 2023

-Increase to 15 licenses in 2027

-Increase to 18 licenses in 2031

It is important to note that all-alcoholic beverage licenses would be capped at seven, and the remainder of the licenses would have to be used for wine & malt.

However, any licensee who currently holds nine all-alcoholic beverage licenses would be grandfathered in and allowed to keep all nine all-alcoholic licenses.

Mass Pack Executive Director Robert Mellion describes the proposal as an “olive branch to food and convenience stores who previously sought to uncork an unlimited number of beer and wine licenses”, according to State House News Service. Mellion is also quoted as saying that the proposal “is intended to end some of the constant disruptions in alcohol retail that has been going on since 2006”, in a Boston Business Journal article entitled “Six Proposed 2022 ballot initiatives for businesses to watch”.

Cumberland Farms surprisingly did not file a ballot proposal related to alcohol sales, as expected, and this increase from nine to 18 licenses serves as a compromise between Cumberland Farm’s former proposal and what is currently allowed. The State House News Service article elaborates on the notion of compromise by quoting Mellion as saying that, “because many shoppers want to purchase beer or wine alongside their groceries and because package stores rely on spirits to drive much of their business, the language could serve as a compromise that offers benefits to both camps.”

The ballot question contains a few other components as well, such as banning alcohol sales at self-checkout stations; allowing liquor stores to accept out of state IDs and allowing these IDs to be “reasonable defense” against allegations of selling to a minor; and mandating fines based upon a store’s gross sales, rather than alcohol sales alone, if a store is found selling alcohol to a minor.

Regardless of where you stand on this issue, the liquor license industry is changing, and the Cumberland Farms proposal and this subsequent 2022 ballot proposal are paving the way for this change that some owners don’t want to stick around to see how it ends.

 

For similar articles, read The Advisor Magazine by Liquor License Advisor – Issue #7

Industry Spotlight: Ben Jerrom Advises Buyers How To Get The Upper Hand

Ben Jerrom, Liquor License Advisor Partner & Buyer Specialist

In April of 2018, Liquor License Advisor welcomed Ben Jerrom as a Partner and Buyer Specialist.

Jerrom learned to navigate legalese and politics early in his career after interning at the Massachusetts State Senate, working for a local Boston attorney, doing some liquor license lobbying and working in New York City at Baker & McKenzie LLP.

Jerrom admits those experiences have helped him transition nicely into the liquor license and liquor store industry as he has mastered how to communicate effectively with very high-powered, high-operating professionals.

At Liquor License Advisor, Jerrom works closely matching Buyers with stores and licenses that suit their capacity – he gives them the greatest chance of success by working closely throughout the deal with all key stakeholders involved.

 

Here’s the Q&A with our own Client Concierge, Michelle Hansford, who took to interviewing Jerrom.

Where do you spend your time outside of the office?

I love the outdoors in all sorts of different ways. It’s not limited to the mountains, or flatlands, or the ocean. I love doing outdoor activities. I try to get my dog off-leash somewhere at least every other day. I go out on my boat, both with my wife and alone, and I love to hike and camp and go fishing. I do love video games, as a typical millennial boy, and I like to read a lot of news, as political stuff is what I went to school for and I do enjoy educating myself on it a lot.

 

What’s your favourite part of a transaction for a buyer deal?

My favourite part is when a buyer is clear about what he wants and the pre-offer phase. There’s this dopamine rush when you know you have someone really close and they’re excited about a store and there’s all of this opportunity rushing in– and none of the hurdles have gotten in the way yet. Being able to guide them and make them comfortable for the rest of the way is definitely my favourite part.

 

Would you say that you have a process that you guide buyers through?

Yeah, usually the buyer finds a store through Biz Buy Sell, our website, or an email blast, so step one is calling me. Step two is receiving the basic level information about the store and them checking out the store. Step three is the most crucial stage which is getting them enough information for them to feel comfortable enough to make an offer. You don’t want to flood them with too much information during that first call; you want a certain level of excitement and emotional investment so there’s positive buildup before you get into the nitty gritty of everything.

 

What’s your advice for prepping buyers?

I think this question has to do with the level of experience a buyer has. A first or second time buyer should have all of their finances in order, number one, and number two is to trust the advice of your advisor, especially if you’re working with us. A good example is when we’re working with attorneys. I refer someone to an attorney because I think that attorney will be ideal at getting that transaction from offer to close as smoothly and as quickly as possible. Liquor stores and licenses is all I do, so trusting us along the way is the best thing you can do. As far as other preparation goes, know ahead of time what’s important to you. Think about storage space, parking needs, neighborhood preference, what type of store do you want, and if you are prepared for the amount of time that you will have to spend there? Do you have someone in your family that you can partner with who will help guide you along? I would rather know your questions ahead of time.

 

You’ve worked with different experience levels, backgrounds, and cultures. Can you give some insight?

We have experience of working with people of all different backgrounds, thankfully. It’s interesting because sometimes it’s a bit of a study in anthropology because you get to see what’s consistently important to people of different cultures. What the business community is like in the culture where they came from a lot of times reflects how they do business here and how they want to be marketed to. I definitely think that there’s a changing demographic.

 

When you’re working with a buyer for the first time, what’s the biggest priority in advising them and building a relationship?

Number one, find out what’s important to them, and number two, be honest with them. You don’t want to paint everything in a negative light, but you don’t want to lie to them. I have inquiries come in every day – there’s no shortage of buyers. The buyers I have the best relationships with are the ones I have been the most straightforward with. Honesty is definitely the best policy.

 

How do you match buyers with stores?

If you’re new to the market, a huge store with a lot of cash flow, commercial tenants, and a big price tag isn’t going to be the right opportunity for you. Don’t bite off more than you can chew, and be honest with what your capacity is. If you need to surround yourself with people who have the experience, do that.

 

Are there hot markets that are doing really well right now?

At the beginning of the pandemic, stores that operate 30-45 minutes outside of Boston were very attractive to people because they have people who commute in and out, are middle-class, and are very desirable – and who wouldn’t want a store in a nice neighborhood. With working from home continuing for some, this has tipped the scale a bit – I don’t know if there’s a market that doesn’t have people going after it right now.

Delivery companies are by far the hottest market sector we’re seeing right now because they don’t have to deal with the same constraints of the competition like walk-in stores do. It makes no difference to them if there’s a walk-in store down the street. They are making a change in the industry and are accomplishing what most cannot. The pandemic has certainly accelerated that.

 

Do you have a big win or favourite story so far?

Yes, I do. My friend Ike was a first-time liquor store owner. He is a Nigerian immigrant trying to build a life and is a very fair and honest guy. He was someone from the start who I was honest about how he could get the deal done and what he was capable of, and where we could be lenient and where we had to be firm. I got him a decent volume store, and he’s on his way to building his business. I was originally reluctant to tell him about this store because I wasn’t, at the time, confident that he’d be able to close something like that, but it’s a great example of building a relationship with someone and a great story of putting trust in one another. Thanks to an attorney who did a great job, and his trusting that the people he was working with were the best, led him to something he really wanted.

 

 

Questions about buying? Contact Ben Jerrom directly for further details on all of our current listings.

Ben Jerrom

Partner & Buyer Specialist

Cell: 413.544.4960

If you enjoyed this article, you’ll love our monthly publication, The Advisor Magazine – click to view more articles like this in The Advisor Magazine – Issue #6.

 

Gen Z’s Impact On Post-Pandemic Alcohol Consumption

Where & how they spend their money is changing the industry.

There is a defined line between “pre-pandemic” and “pandemic” life. Everything as we knew it came to a screeching stop, as businesses shut their doors and people sought at-home entertainment options instead. However, the lines are becoming blurred as we move into “post-pandemic” life, especially when it comes to consumerism and the ways in which we purchase and consume adult beverages – – and no one is more influential in setting and keeping these trends than Gen Z. Because the pandemic set in during what would typically be the most social years of their lives, they quickly made being “socially distant” as social as possible. Rather than spending their prime locked in isolation, they influenced the market in new ways – ways so impactful that they don’t seem to be going anywhere any time soon.

Drizly, North America’s largest e-commerce alcohol marketplace, recently released their 2021 Consumer Report, in which they revealed many interesting findings regarding how people plan to purchase and consume adult beverages post-pandemic. Gen Z, fresh to the legal drinking scene, is making a distinctive mark on this industry, paving the way for post-pandemic alcohol consumption and deciphering which pandemic trends will carry on. 

The Consumer Report highlights a survey of “over 1,000 Americans of legal drinking age, independent of Drizly’s customer base, in late June 2021 on a range of topics, from their beverage choice inclinations for this summer and fall (and what influences those choices), to how newfound interests at home stand to impact consumption occasions and locations longer term, and how they are purchasing alcohol.”

The findings show that although the younger drinking population plans to return to restaurants and bars, they also plan to continue drinking at home, especially while cooking and while watching TV and movies, one of the reasons why being because it is less expensive to drink at home. And with the ease of online ordering, a result of the pandemic with which many became comfortable, the ability to enjoy beverages at home is even more stress-free.

Gen Z’ers are not only changing where they will spend a majority of their time drinking, but also what they will be drinking. The current drink of choice is hard seltzers, with Ready-to-Drink (RTD) cocktails and other canned beverages also gaining popularity and stealing a bit of the seltzer’s thunder.

But this generation doesn’t only care about convenience and cost; they are also considered “conscious alcohol consumers”, and they pay attention to their drink ingredients, how they’re made, and by whom. This younger generation focuses on health in most aspects of their lives, which translates into them also wanting to choose the most healthful option when it comes to adult beverages. Factors such as minority ownership, sustainable practices, and “healthy” ingredients are all important to Gen Z, as well as family ownership, size, and local ownership.

As a generation known for stating their beliefs and living by them, Gen Z is combining the best of the pandemic drinking scene with the more traditional one, and the market is hearing them – and responding.

 

If you enjoyed this article, you’ll love our monthly publication, The Advisor Magazine – click to view more articles like this in The Advisor Magazine – Issue #6.

 

Balance & Stability

Looking forward to 2022 with the budget signed July 16, 2021, the Commonwealth is positioned for support and stability, focusing on the communities which were hardest hit during the pandemic.

In some areas of the State, a unique barrier has appeared – specifically in the service industry with some restaurants choosing to close as a result of a lack of qualified staff to support the level of service their patrons are used to receiving during the busiest weekend of the Summer, the Fourth of July.

It’s a unique time, as some are choosing to accept support payments from the government rather than return to work at this time.

If you enjoyed this article, you’ll love our monthly publication, The Advisor Magazine – click to view more articles like this in The Advisor Magazine – Issue #6.

 

Fun in the Sun: Hot Summer Trends & Updates

With summer in full swing, it appears nearly the entire country was open with little to no restrictions on the Fourth of July. The majority of states have lifted restrictions fully, while others such as Washington DC, California, and New York still require masks for unvaccinated people indoors, and Hawaii is the last state left with masks inside for all.

The conversation has flipped to the discussion around which laws to lift or continue to enforce, especially when it comes to the liquor world. A quarantine staple for much of the nation that’s been bored in the house, a distribution that did not require leaving the house was critical. That’s where e-commerce stepped in. Several platforms gave the ability to order alcohol from the comfort of your home or get it delivered.

Another exception to pre-pandemic liquor laws was the allowance of restaurants to offer takeout or delivery of beer, wine and, in some cases, spirits or pre-made cocktails.

While some fight for these changes to stick around long term, others find too many risk factors. These bills remain up for continuous debate as states weigh the pros and cons amidst navigating the new post-pandemic world. One bill that has been making its way through legislation is the ban on nips in Massachusetts. Mashpee on Cape Cod has officially set the precedent in banning them, with Falmouth following behind in October 2021, and Framingham brings forth a policy to ban the use of styrofoam, nips, and any other plastic resin.

In regards to new liquor policies around alcohol delivery, WCVB reports on several incidents involving a popular Boston beach. “Along the South Boston coast, lifeguards and Massachusetts State Police are also keeping a watchful eye on alcohol consumption, and trying to crack down on a new issue: alcohol deliveries.

Boston city councilor Ed Flynn said there have been numerous complaints of people ordering liquor deliveries to addresses along M Street or Carson Beach, and then bringing the alcohol onto the beach.”

These new era liquor policies are expected to experience several kinks, and while the battle is still being fought and bills continue to be passed, safety regulation and enforcement of the fine print remains priority.

 

If you enjoyed this article, you’ll love our monthly publication, The Advisor Magazine – click to view more articles like this in The Advisor Magazine – Issue #5.

 

Planning Past The Pandemic For The Liquor License Industry

Date With Destiny

It seems as though the scales have officially flipped where business restrictions are fewer and far between, while news of phase progression is becoming constant. The country reopens, history is being made, and a new air of hopefulness is stretched across the nation as we retreat from our long hibernation. And what better to do than head straight to your local bar, restaurant, concert, or sports game, any and all things we’ve held out on for over a year now. And many of which -for some of us- means having a drink and letting loose!

Business and market analysts are honing in to see where this new era takes the trends of e-commerce, delivery, wellness, small businesses, and altered mindsets of their consumers. There is an entirely fresh layer to the new normal and hopefully, this one provides a well-rounded, stimulating boom to the world of commerce & consumerism.

SevenFifty [an online marketplace and communications platform that helps importers, producers, distributors, and retail buyers connect with each other and do business in a modern world] did a recent piece on the transformation of alcohol distribution, how e-commerce is becoming a key player, and how wholesalers are responding. One of the most significant periods of modernization since the three-tier system was created in 1933, the article states.

Us vs Them

This transformative era has made niche businesses a foot into direct-to-consumer as well, providing artisanal, craft brands where they hadn’t originally fit in at wholesalers. Speakeasy Co. is just one example of a modern niche platform that enables producers to customize order pages right on their own website that are then provided by Speakeasy via local retailers. As CEO Josh Jacobs puts it, “‘This provides a seamless front-end experience for consumers while handling the backend for brands,’ explains Jacobs. By managing warehousing, fulfillment, and technology for suppliers, they are freed up to ‘focus on growth by owning the data and building customer relationships.’”

Similar to this case, Spirit Hub, independent distillery-focused e-commerce that allows customers to order and have curbside pick-up at one of many national retailers that CEO Michael Weiss is working with. And for all the vinos, Wine must not be forgotten, as it poses as another niche that Vivino hopped into as a marketplace partnering with wineries directly that then fulfills the consumer’s order through a local retailer.

These companies rave that the ability to get into this business while it is a standout need in the market has given them free reign to do what they’re best at, “finding the producers and marketing and getting out there in the world and building these brands. It allows us to be a more nimble and focused company.” An importer of Elenteny Imports explains. (Elenteny provides distribution services in some states which allow importers and producers to sell directly to accounts; in other states, they provide logistics and freight-forwarding services and work with a licensed distributor.)

On the opposite end of the spectrum, wholesalers are pressured to create more value for their buyers and for their consumers. What used to be free cookies and a slice of cheese at the deli, or the newest product offering a tasting, is now at the tips of consumer’s fingers right from their own home! It’s social media marketing, instant gratification, engagement and stimulation.

The wholesalers still have the leg up when it comes to well-developed quality + quantity of mass distribution, communication, the vitality of sales, and suppliers, all factors critical and essential to the growth and longevity of any business.

On-Demand In High Demand

“These are the resources to really help a smaller brand grow and be successful.” Besides, he [Michael Epstein, COO of the Massachusetts-based Horizon Beverage] adds, wholesalers, need emerging brands: “You never know when a brand is going to pop and become a big brand. You need these developmental brands in your portfolio because it’s a dynamic marketplace.”

Eventually, to survive, any platform is always going to be looking for the next better, faster, and cheaper system to rely on. It seems as though it will soon be a meeting of the minds, as online platforms have the upper hand on the customer-facing side when it comes to marketing, ease of access, and modern innovation. “When a product is promoted on Drizly, Breakthru could quickly see a 150 percent increase in sales at its local retail customers; he predicts that 20 percent of alcohol in the U.S. will soon shift online.” Like many online platforms are partnering with retailers to get the best of both worlds, it will be exciting to see which businesses come together to create a master machine of transformative alcohol supply and distribution.

 

If you enjoyed this article, you’ll love our monthly publication, The Advisor Magazine – click to view more articles like this in The Advisor Magazine – Issue #3.

 

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