New Brunswick

NB Liquor finds support for wine in grocery stores

New Brunswickers are thirsty for more wine inside grocery stores, but internal documents show NB Liquor is worried that expanding choice could drive traffic away from its own locations.

Report commissioned for NB Liquor shows fear of driving traffic away from Crown corporation's stores

The Co-op grocery store in Sussex was one of six New Brunswick stores selected to sell wine as part of a pilot project by NB Liquor. (CBC)

New Brunswickers are thirsty for more wine inside grocery stores, but NB Liquor is worried that expanding selection could drive traffic away from its own locations, new documents show.

Internal reports released to CBC News under right to information legislation show that most New Brunswickers — 72 per cent of people surveyed — support having wine inside grocery stores. Only five per cent of the 400 people surveyed said they opposed the idea.

The Crown corporation launched a test run of the sale of wine in six grocery stores in 2014, looking to increase sales and capitalize on "the impulse nature of the wine category."

Expanding the list of grocery stores that offer wine could incrementally boost sales, according to a report written for NB Liquor by Atlantic Canadian research firm MQO Research.

But the report warns this could drive people out of NB Liquor's stores.

"There is also a strong indication that people will buy more of their wine at a grocery store instead of an [NB Liquor] store if it was available," the report says.

"Presumably this is for convenience reasons, but there is a risk of inadvertently reducing visits to [NB Liquor] stores by offering wine more broadly in grocery stores, which in turn reduces opportunities for education, upselling and participation in promotions."

'Minimize negative impact' on liquor stores

The report recommends NB Liquor limit the choice of wine available in grocery stores, so people are driven back to NB Liquor outlets.

"The goal would be to offer convenience and a good range of product at the grocery store, but more selection and knowledge at the [NB Liquor] store."

A survey commissioned by NB Liquor, and obtained by CBC News, shows most New Brunswickers support the sale of wine in grocery stores and want a wide selection of red and white wines. (CBC)

That goes against what people told NB Liquor they wanted, with most of the people surveyed — 53 per cent — saying they want a wide selection of red and white wines in grocery stores.

'Heaven-sent' opportunity for winemaker

David Craw, the owner of Motts Landing Vineyard in Cambridge Narrows, sees wine in grocery stores as a "wonderful thing" for his industry.

In the past, Craw said the cost of having his product placed in NB Liquor stores was prohibitive.

Now, his wine is sold in Atlantic Superstores in Fredericton, Moncton and Saint John.

Dave Craw, owner and operator of Motts Landing Vineyard in Cambridge Narrows, says having his wine in three grocery stores has been a 'heaven-sent' opportunity for his business. (CBC)

That's helped give Craw's business a boost.

"The availability of getting into the grocery stores for us has been quite heaven-sent."

NB Liquor evaluating pilot

According to sales figures obtained by CBC News, more than $1.6 million worth of wine was sold in grocery stores between Jan. 1, 2015 and March 16, 2016. That accounts for 1.63 per cent of NB Liquor's total wine sales during that period.

In launching its pilot project in 2014, NB Liquor chose major grocery stores in Fredericton, Moncton, Saint John, Douglastown, Tracadie and Sussex.

Internal documents show a number of factors were used to choose the stores, including the size of the municipality, the store's operating hours and proximity to an NB Liquor location.

"Preference will be given to locations which have no immediate [NB Liquor] presence nearby," the report says.

NB Liquor is still evaluating the findings of its wine in grocery stores pilot project. Internal documents suggest the Crown corporation is worried about driving traffic away from its own stores. (Cherise Letson/CBC)

The pilot wrapped up on Dec. 31, 2015, and the stores are allowed to continue selling wine if they wished.

Nearly four months later, officials at NB Liquor haven't said whether they will expand wine sales to other grocery stores.

The Crown corporation was supposed to complete an evaluation of the pilot project before December 2015, looking at the profitability of local stores, public feedback, wine sales growth and the "cannibalization impact" on overall wine sales.

NB Liquor spokesman Mark Barbour declined to comment on whether the Crown corporation might expand its wine pilot project.

"We still have at least one more meeting on this to decide what the future of this will be," Barbour said.

No beer in grocery stores

While NB Liquor sorts out the future of wine in grocery stores, the Crown corporation doesn't have any plans to expand access to beer.

CBC News filed a right to information request for documents relating to the sale of beer in grocery or corner stores. NB Liquor didn't retrieve any documents.

"The sale of beer in grocery and/or corner stores in New Brunswick has not been discussed, nor is it being considered," Barbour wrote in the letter.


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