I was in the middle of writing a Best-Kept Craft Beer Secrets article when I learned that a subject of a future article had abruptly closed. Star Liquor on Willy Street was always one of my first stops when a rare beer hit the Madison market. I could usually rely on their Twitter to notify me the minute it hit their shelves.
In the recent weeks, however, such drops at Star — and their corresponding tweets — became less frequent. Something was up. When I stopped in last week, the manager was complaining about allocations of the more rare beers, and how unfair it was to the smaller guys that were trying to play the craft beer game.
Star Liquor’s demise happens to coincide with next week’s opening of Total Wine & More. Total Wine is a national chain based out of Maryland with over 170 locations across the United States. The Madison location is set to open its enormous 23,146-square-foot store on April 12 in the former Sears store at West Towne Mall. While the name doesn’t scream craft beer, Total Wine has a reputation for being a destination for beer enthusiasts. The Madison location plans to stock over 2,500 beers.
Total Wine’s most obvious direct competitors will be Woodman’s, Hy-Vee and Steve’s. However, any significant entry into the Madison market is bound to have an effect on beer shelves throughout the city, especially when breweries divvy up their rare offerings. This is due to the practice of allocation, often conducted by the beer distributors.
Breweries typically rely on distributors to get their product on store shelves, giving the distributors the final determination on which stores receive which beers, even going so far as to stock the shelves themselves in the case of large stores like Total Wine. When the brewery drops their rare offering, distributors allocate the amount of the rare beer based on how much of the brewery’s other beers that store sold. So, the more Surly Furious a store sells throughout the year, the more Barrel Aged Darkness bottles that store receives.
While this practice makes financial sense from a supply and demand perspective, it often leaves the smaller bottle shops with little recourse. Star Liquor can’t possibly compete with Woodman’s when it comes to the amount of everyday offerings it sells. As a result, some stores resort to “handcuffing” their limited offerings to the purchase of a “regular” beer. For example, stores offer the opportunity to buy a 4-pack of Founder’s KBS with the purchase of two 6-packs of any other Founder’s product. Unfortunately, handcuffing is largely misunderstood and reviled by consumers as a product of greed rather than necessity.
To avoid handcuffing, stores like Star often need to rely on their relationships with distribution representatives, who may be willing to do them favors to secure extra allocations. Relying on favors, however, is hardly a viable long-term business strategy. And while selling rare beer is not the only way to keep a liquor store’s doors open, it can certainly have a dramatic effect on the store’s reputation for being a craft beer destination.
There are rumors that Star Liquor might not be gone long, but in the meantime, pour a little barrel aged stout out for them next time you crack one. But not too much, because that shit is expensive. And when you are in the market for a 4-pack of Pseudo Sue for the weekend, consider picking it up at your local bottle shop.
Update: Degoba’s Josh Swentzel intends to “reopen an affordable quality neighborhood spirits, wine and beer store” at the Star Liquor location, per the Facebook post below.