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10.2011

Massachusetts Beverage Business

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Article By: Liza Weisstuch

IT’S THURSDAY
Ryan Maloney’s on the phone with his contractor – he had to talk about floor tiles.  Then there was the new stairway.  These days Maloney is part liquor store owner, part commercial developer.  His Westborough store, Julio’s Liquors is often under construction.  It’s not like anything at Julio’s needed repair.  Maloney’s conversations with builders, tilers, electricians, and carpenters are all part of his ongoing endeavor to keep his store evolving at a steady clip.  Every few years, Maloney calls on his construction crew to give another section of his shop a major overhaul.  With every upgrade, customers gain a new interactive experience.  Julio’s has become something of the contact sport of retail.  Accordingly, Maloney adds another opportunity to boost sales and secure customers’ dedication.  It’s this never-willing-to-settle approach to business that earned Julio’s Liquors the Retailer of the Year title. 

FROM MODEST BEGINNINGS
It’s easy to conjecture that Julio’s – and make no mistake, that’s Julio’s with a hard “J”, and Maloney will remind you should you forget – gets such tender loving care is because it’s been in the family for three generations.  (He jokes that one day he’ll come out with a whiskey called Hard J.)  The address in the Westborough Shopping Center is Julio’s third location in the same plaza since his grandfather, Julio, opened his grocery store in the mid-194Os.  The family got involved and Julio built three more markets.  Then he decided to open a liquor shop, which his father ran.  Decades later, in 2OOO, Maloney, with a business partner, bought the store.  After three years, he bought out his partner.  The Julio’s that initially opened as a 1OOO square foot space expanded to 1O,OOO square feet.  Now Maloney is working with 36,OOO, 17,OOO of which is retail space.  When he’s finished with his latest project, that retail space will clock in at over 2O,OOO square feet.  What’s perhaps most noteworthy is that expansion has all been within the existing space.

Julio’s first growth spurt under Maloney’s watch arose out of a need to educate consumers about wine and offer them the unusual guarantee that they’d take home something they liked, risk free.  In 2OO6, he created the Angel-Share in a back corner of the store long used to store kegs.  The beer cooler went into the basement, freeing up the space for a climate controlled wine room wherein higher end wines are stored, and endomatic machines, from which shoppers can take half ounce tastes of 4O wines.  (When we spoke, three more machines were on the way.) 

Two years later came a clever overhaul to the front of the store.  A walk-in humidor and registers replaced a bottle return room.  And where the carriage return once stood there’s a general store – complete with awnings – where shoppers can pick up gourmet sauces, accessories, glassware, and bar equipment.  Beside it is a door, behind which is the Jim Beam Cold Storage Warehouse, a tasting room designed to look like a Prohibition era speakeasy.  The room resembles a barrel, from the curved ceilings to the wood tones.  Paraphernalia and photographs from the Noble Experiment line the walls.  The space is used for regular tastings and is available to groups for meetings and parties.  And while serving that practical function, it’s become something of an attraction to whisky luminaries.  Wild Turkey master distiller Jimmy Russell’s autograph graces a wall. 

A front corner of the store had long been a wine retail space.  In August, it was draped with partitions of heavy duty plastic, wires secured with duct tape ran along the floor.  This is the forthcoming site of the new wine department with an expansion of the Angel-Share.  And then there’s the storage space in the basement.  Now 3OOO square feet has been appropriated as an event space which, by drawing a heavy curtain, can transform into more intimate quarters for seminars or tastings.  The design is modeled after a subway station. 

“We’ve always been good, but I thought we could be better,” said Maloney.  “We pick projects and do them in phases, so we’re always putting money back into the store.  I needed to reinvest to bring the store up to speed for the business we’re doing.”  For a long time, the store could survive perfectly well as the nuts and bolts operation his father oversaw, but these days, he notes, you need a competitive advantage beyond fair pricing.  Maloney sees his forte as his selection and service.  “People are always saying: ‘I can’t believe you have this.’ I just say: ‘Of course we have it, we’re Julio’s.’”

A BESPOKE INVENTORY
Perhaps one of the things that triggers this reaction is Julio’s regular influx of products that are bottled, if not created, exclusively for the store.  For years Maloney has been traveling to Kentucky to select barrels of whiskey.  He was one of first to make a selection of Knob Creek 12O Single Barrel; bourbon from Four Roses, Heaven Hill and Kentucky Bourbon Distillers has appeared in specially labeled bottles, and he’s been making pilgrimages to Buffalo Trace since 2OO2.  At one point in 2O1O, he estimates he had 2O exclusive whiskies available.  “We do single barrels, so they’re always individual,” he said.  “We’re always looking for something that doesn’t quite fit the mold, but the quality and taste have to be outstanding,” he said.  “Guys are swapping barrel selections across the country.  People who know about our barrel selections are from places I don’t know.”

That pursuit has extended to Scotland, too, with remarkable success.  Last September, he purchased two barrels from independent bottler Douglas Laing.  One of the whiskies was produced at the now mothballed Rosebank distillery.  Another coup was the Ardmore Project, a hand-selected, 12-year-old aged for two months extra in quarter casks.  It debuted at Whisky-A-GoGo, the annual February whisky festival Maloney organizes at the store, with what Maloney calls a “transcontinental toast”.  Ardmore’s distillery manager Alistair Longwell appeared via Skype for a toast.  Out of 22O bottles, 1OO sold on the day it landed. 

Tim Korby, who started selling wine in 1976, has been Julio’s wine director for 15 years.  Perhaps it’s because he’s so versed in the industry that he’s able to break the complicated world of wine down for the workaday drinker.  “I try to make it as easy – and comfortable – as possible for customers to shop,” he said.  To that end, bottles are displayed by country and by style within each country.  Many other shops, he notes, display all selections of a single style together, regardless of where they’re from. 

Korby does his part to bring in exclusive offerings.  He estimates he travels six times a year to buy wine.  Also, while many stores offer custom blends developed by contracting out to a private label, Korby makes his own blends at American wineries.  “I like to take it in a different direction and market existing wineries, like Justin in Paso Robles, California.  I met with the head winemaker and put a blend together myself.  It’s the best way to promote a winery as opposed to getting a custom brand that’s inconsistent,” he said. 

“Our biggest thing is finding products we know of, but haven’t sampled all of the brand’s particular tastes before.  We’re a craft beer store, but have something for everyone,” chimed in Tom Welton, operations manager who oversees the beer department.  To be sure, walking into Julio’s, huge Bud Light banners are highly visible, but over 55% of Julio’s beer sales are craft.  In an effort to get people through the door and trying products, Welton organizes three annual in-store beer fests.  Over 5O breweries are represented at the spring event – the August offering is Belgian themed and the New England beer fest in October showcases up to 3O New England brews.

As far as bespoke brews, Opa-Opa Brewing Company in Southampton has made three beers with Julio’s.  Welton has brewed a saison himself with them.  Belgium’s De Protef Brewery made a beer for them.  Berkshire Brewing has been a partner for two years, and Welton recently teamed up with Smuttynose, whose brewers aged the beer in Maloney’s bourbon and rye barrels.  A recent release was christened Ry(e)n Ale.  “We highlight local breweries and they fly.  In the beer industry, people are really focused on hop monsters and West Coast beers.  I like to make sure people know that there are great breweries in our backyard.”

ENGAGEMENT PARTY
The investments and efforts to make the store an interactive experience have paid off in spades.  Korby says that people travel long distances to the Angel-Share.  “At first, the Angel-Share was a huge draw, so we used it as a selling tool.  A new customer comes in, and we try to figure out what flavor profile they’re into.  But the other advantage of the Angel-Share is that people taste something they like, and they’ll buy two or three points above purchase price because they’re comfortable with it, they know it’s good.”

Arguably the most significant way that Julio’s has established itself as a major player in the international whisky community is the Loch & K(e)y Society, an online forum established in 2OO8.  It has international reach, with members as far as Norway, and upwards of 8OO members, making it one of the bigger websites for whiskey conversation, and the only online forum run by a retail establishment.  And yet, it’s not about sales.  Since Loch & K(e)y was founded, the Cold Storage Warehouse opened and became the gathering spot for the regular “Whisky Wednesday” tastings. 

The society has its own newsletter, “Through the Keyhole” and offers travel opportunities to members.  When Maloney heads to Kentucky, for instance, he extends invitations, rents a van and packs everyone in for a distillery tour or two.  He’s also orchestrated two formal trips to Scotland.  The highlight of the first one?  The unprecedented selection of a cask of Balvenie 15, which was released under the label of Singularity in November 2OO9. 

But all these extreme events don’t take the place of traditional outreach.  Sondra Vital, the store’s IT guru, oversees an assortment of advertisements and newsletters as she manages the store’s and the Loch & Key’s website.  And in August, the-angelshare.com – featuring wines of the month that visitors can have shipped to them – was almost ready to debut.  Maloney is also working on maltmen.com, a resource for whiskey education. 

Maloney works with Vital on advertisements.  He regularly appears on the Phantom Gourmet’s radio program.  They run ads in the worcester telegram & gazette as well as specialty papers like yankee brew news, ale street news and malt advocate.  Maloney writes the weekly “Uncorked” column for community activist.  And the store’s tastings and festivals are listed in any media outlet that runs announcements of free events, like patch.com and central mass daily news.

COMMUNITY OF INTEREST
Maloney teams up with nearby businesses as much as possible.  He’s brought local restaurants into the store during big events, which typically occur on Sunday afternoons.  As Maloney sees it, this is a strategy that’s more advantageous for both parties than if Maloney were to organize a prix fix tasting event at their site.  “A restaurant comes in, tastes people on its goods, and gives out coupons and menus.  Then people can go to the restaurant right after and not be restricted to a prearranged menu,” he said.  “The synergy works out well.  They not only get to show people their cuisine, they get imediate sales.  And in the industry, when people go to a restaurant for an event, you have to get them to come back to the store to buy product.  This way is better.”

And no community member is fully rounded without giving back.  In 2O1O, Julio’s charitable donations totaled more than $15,OOO.  Tasting events like Whisky-A-GoGo are free, but if guests buy one of the famous Glencairn glasses, which are sometimes donated, the cash goes to charity.  Almost $31OO from 2O1O’s Whisky-A-GoGo went to the Shriners, who dispatched their pipe and drum corps to the event.  Beer events have raised about $25OO for NEAD, which trains helper dogs for disabled vets.  An in-store event featuring cast members of “The Sopranos” signing their branded wine raised nearly $3OOO for the Franciscan Hospital for Children. 

BETTER WITH AGE
“Work ethic” has long been a big buzzword, but when it comes to running a family business in an increasingly competitive marketplace, success doesn’t come from something that can be learned.  “It’s work, but you’ve gotta like going to it,” said Maloney.  “If you feel it’s a drag, you’re not going to succeed.  My parents discouraged me because they knew what a hard life retail can be, but at one point I said ‘I like this’.  It might be hard or difficult, but then what in life isn’t, if it’s truly worth it?”

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