To keep pace with consumers’ evolving demands, off-premise retailers continue to tinker with marketing strategies for organic and sustainable wine, spirits and beer.
As many stores are grappling with whether to bump up consumer-education efforts or leave it to the brands, suppliers are considering whether they should be more vocal about their eco-friendly efforts.
By definition, distilleries produce huge amounts of wastewater — up to 92 percent of what they use, says Roberto Serralles, a distiller and sixth-generation rum maker at Destilería Serralles. While he won’t label his company — “I have never seen a distillery that is 100 percent sustainable, including my own,” he says — it focuses heavily on turning its wastewater, a staggering 350,000 gallons a day, into fuel to run its boiler. Eventually, it can become irrigation-grade water, he says.
“It’s not a destination, but a process,” Serralles says. “We have invested almost $20 million, so it makes our rum more expensive to do the right thing. We don’t have any sustainable certifications, but we have invested a lot of money in making sure we do the best thing for our community and our business.”
Indeed, what makes a product or company sustainable, or its products organic or biodynamic, has been difficult to lock down. The U.S. Department of Agriculture sets standards for what can be classified organic, but things can quickly get murky: A wine might be produced in a sustainable manner but not be technically organic because it contains added preservatives or sulfites. And when it comes to pesticide use, elements like copper can be used as an additive -but it is considered an organic one, and thus sustainable.
Biodynamic is a close cousin of organic (farming without chemical fertilizers or pesticides), and also often uses lunar cycles and dry farming techniques. Sustainability is broader, generally referring to farming practices and packaging, and often including details about a product’s ecological footprint on the label.
Such confusing standards, however, have made some retailers scratch their heads when it comes to introducing their shoppers to store signage and separate sections for products using these methods of production.
Sandra Spalding, director of marketing for the 80-store Twin Liquors in central Texas, remembers the early 2000s when, as she puts it, “labeling something organic was also the kiss of death.”
“People thought organic wine was not that great, and it was a stigma,” she says. “Yet at the same time, some of the Italian and French wines were just naturally organic.” The Austin consumer is incredibly savvy, she says, and they do a lot of research on their own, but Twin Liquors still values its place in educating the shopper, Spalding says. “In our neighborhood stores, where we have classrooms and tasting bars (11 in all) we have a lot more of those conversations.”
Separate Sections and Signage
Patrón global CMO Lee Applbaum agrees the standards for labeling organic, biodynamic and sustainable products can be overwhelming for consumers, and that brands need to be the ones to articulate where they are doing things above, beyond or outside of the norm.
“If you’re gonna create a section, be damn sure those products adhere to a measurable set of standards,” he says, adding that Patrón has a companywide focus on educating trade mixologists about its environmentally conscious ways, which includes a state-of-the-art reverse-osmosis system of water treatment.
“We could take that water in pour it back into the water system—especially in Mexico,” Applbaum says, “but we treat that waste water and make it reusable.” Applbaum says he plans next year to make a major push for the company to be more vocal about the ways it tries to lessen its environmental impact. That would please Spalding, who says “It’s easier for suppliers to start talking about those things, than for us as a retailer to try to take that on ourselves and start running with it.”
At Happy Harry’s Bottle Shops in Fargo and Grand Forks, North Dakota, General Manager Dustin Mitzel has enlarged sections for organic products at all five of his stores. He started the rollout in just one store—the newest and largest to date—to see if it was “as easy to shop as we thought it was going to be,” he says. “Once we did that one, we took off our blinders for each store and found a place we could put that section.”
By July, all his stores had one. Mitzel says he was “very nervous” about putting some products solely in the organic section, thus “having them lose traction where they were originally.”
To solve that, “Everything we put in the organic section is essentially a double-up now,” he explains. “It’s a separate shelved area in each store that has a sign that says ‘organic.’” Mitzel says the signage is the same color and size as the ones that call out wine varietals.
Sean Kelly is a spokesman for ABC Fine Wine & Spirits, which sells more than 100 organic items in its 125 Florida stores and has sections for organic wine (but not spirits or beer). “We do this because the term ‘organic’ is highly identifiable to our guests,” he says, “and the ones who value that standard in their purchases ask for them specifically.”
He identifies these products using end-cap displays with organic wines, or—if they are mixed in with other products—a tag that includes a green shelf enhancer.
Spalding says some of Twin Liquors’ stores have “a few dozen” organic wines, but that the smaller marketplace stores often don’t have the square footage to segment out a special section. “Those wines will exist in their own categories in the French or Italian section,” she says. The chain doesn’t use shelf-talkers that say sustainable, “because we don’t know how to define that,” she says, adding that biodynamic is so close to organic that the store does not label anything with that less-recognizable distinction.
The Eco-Seeking Demographic
Mitzel says he believes the beverage industry is slower to adjust to labeling callouts than the food industry, and that he feels most customers “still don’t necessarily understand the differences between organic, biodynamic, or something made with a portion of organic products. Our industry needs to be better at teaching consumers what those differences are.”
It used to be people in their 40s coming in looking for so-called sustainable products—“and now it’s 21 to 60-plus,” Mitzel says. “Our access point for these products isn’t the same as the East or West Coast, but it’s starting to reach the Midwest.”
In Texas, Spalding says the 25- to 35-year-old female consumer is interested in supporting companies that have a “good eco-footprint.” They might not come in asking for something sustainable, she says, but they come in asking for something well-made. “Then I’ll show them Tito’s or Patrón, for example, and talk about how they give back. I see eyes light up with those conversations.”
Applbaum says he feels like the customer seeking these products make up a continuum, with most consumers somewhere in the middle—“but badge value matters,” he says. “These efforts are not about eliminating waste, but reducing it.” Patrón also composts 5.5 tons of fertilizer a year from its agave harvests—and does the same for 10 other distilleries at no cost. “If we can give the trade another reason to feel good about choosing Patrón, we need to talk about those things,” he says. “I would love it if these things weren’t a point of differentiation, but right now they are.”
While it’s increasingly important to the super-premium consumer to buy well-made, environmentally friendly beer, wine and spirits, it still seems far from a mandate—so some retailers are cautious about trying to charge more due solely to different production methods.
“I think organic products should be in range of what they would sell for if they weren’t organic,” Mitzel says. “People on the fence will say it’s not worth it. If you’re going to have an organic chardonnay, for example, the quality has to be there obviously, but it should be in range with its other peers in that particular varietal. People will pay a little bit more, but if it’s outlandish, they won’t purchase it unless they have a really particular need.”
Kelly says ABC fully understands the additional expense required to produce organic products, “and knows there are times this affects the price the maker sets for their wine or spirit.”
Applbaum says it’s fine to charge more for organic spirits—but that his company has elected not to take that approach. “We absorb it,” he says, “and consumers reward us with their business.” By contrast, he says, “Many companies either make the choice—or shareholders make the choice for them, that the lowest-cost path is the best path.”
Sarah Protzman Howlett is a freelance writer and editor based in Boulder, Colo. A veteran of Condé Nast Publications in New York City, her work has appeared in O, The Oprah Magazine; Prevention; Denver’s 5280; and trade magazines across various industries.