WI:  State’s first Total Wine & More faces license dilemma

Journal Sentinel

By Paul Gores, Milwaukee Journal Sentinel

October 15, 2016

Total Wine & More executives say it would be wrong to think of their business as just another liquor store.

With 8,000 different wines, 2,500 beers, 3,000 spirits and an attractive in-store education center where visitors can learn about and taste alcoholic beverages, Total Wine & More makes the case that it’s an “experiential” business —  and worthy of something more than a typical retail liquor license that strictly limits the amount of samples it can offer patrons .

But so far, the company hasn’t convinced Brookfield city officials of that.

Although Total Wine & More has invested nearly $2 million getting its first Wisconsin location ready to open in November, the company hasn’t been able to obtain the kind of less-restrictive liquor license it wants — one that would allow for the level of wine, beer and spirits tasting it normally conducts.

On Oct. 4, the Brookfield Common Council turned down the retailer’s request  for the Class B liquor license it says it needs to optimally run the new 28,000-square-foot store at W. Blue Mound and N. Calhoun roads.

At the request of an alderman, the council plans to reconsider the issue Tuesday.

It might be difficult, however, to persuade the council to grant Total Wine & More the Class B license it’s seeking. That kind of Class B license usually is reserved for restaurants and taverns and is accommodating about how much alcohol can be served on site. But municipalities are limited in how many such licenses they can issue, and Brookfield has only one regular Class B license left. It wants to save it for a true restaurant.

The alternative is a Class A license, which normally goes to retail liquor merchants but caps in small amounts the number and size of samples it can serve on location. The number of Class A licenses a city can issue isn’t limited by state law, and Total Wine & More could easily get one.

“The question is, ‘What are they, really?’” Brookfield Mayor Steve Ponto said. “They are a liquor store. They may give out more samples than other retail liquor stores in Wisconsin, but they are not a tavern, not a restaurant.”

Total Wine & More doesn’t see the issue that way.

“We’re a destination,” said Edward Cooper, vice president of public affairs and communications for Potomac, Md.-based Total Wine & More. “It’s safe for me to say that we are unlike any other alcohol retailer in Wisconsin.”

The uniqueness of the brightly lit Total Wine & More stores starts with their sheer size and variety. Although they have 8,000 wines across a spectrum of prices, “The wheelhouse really is somewhere between $8 and $20,” Cooper said.

The stores have neatly dressed employees trained to be thoroughly familiar not only with what’s in the store and where to find it, but even to know what sets different beverages and brands apart from others, he said.

Though it won’t sell cigarettes like many liquor stores, it will feature a humidor with pricey cigars.

The stores feature an open classroom area, where visitors or local groups can attend regular courses and seminars that delve deep into alcoholic beverages sessions with titles such as “Best of Bordeaux” or “Taste of Tuscany.” A class usually runs an hour and a half, and might cover details like how the grapes were grown and the impact different soils have on the wine.

The stores have a “Brewery District” where new beers are sampled.

Total Wine & More also conducts educational sessions with its “Maker Series,” in which a wine maker, brewmaster or distiller comes  in — or connects live via video — to talk about a product and how it’s made.

A typical wine class might have eight to 10 wine tastings, Cooper said. Classes on spirits and beer also include samples that participants can taste on site.

That’s the big issue with the type of license Total Wine & More wants.  In Wisconsin, a Class A liquor license allows a retailer to offer very limited samples per customer: two 3-ounce samples of beer; two 3-ounce samples of wine; and one half-ounce of intoxicating liquor. A Class B license wouldn’t have such restrictions.

The classes and tastings are part of the experience that differentiates Total Wine & More, which this year will have revenue of about $2.5 billion, from other adult beverage retailers, Cooper said.  And it’s good for business, he said, because “an educated consumer is our best customer.”

Total Wine & More co-founder David Trone said the retail industry in general is changing, and people want it to be more experiential.

“We think the B license is what’s really important for the customer to learn about these new beers, new wines, new spirits and decide what they like,” Trone said. “We think it’s very important, so we’re just working to explain the reasoning to the city and were very hopeful they’ll agree with us.”

If the retailer ends up with only a Class A license, it still will open next month, but consumers will wonder why the tasting stations aren’t being used, Trone said

“We need to have the ability to taste product. Stores all over America taste product. There’s no reason not to be able to taste wine,” he said.

Ponto said city officials were surprised when Total Wine & More applied for a Class B license instead of Class A. The mayor said the issue is bigger than what’s best for the store. Brookfield has issued 56 Class B licenses and has only one regular license left.  It also has six reserve Class B licenses, which carry a large permit fee. Class B licenses need to be kept for restaurants and taverns, Ponto said.

“I find it difficult to believe that they can’t operate under a Class A,” Ponto said. “It may not be the optimum. I’d be happy to work with them in terms of getting it liberalized at the state government. But I think the answer is in Madison, not in us giving licenses that are designed for restaurants.”

However the license issue turns out in Brookfield, it probably won’t be the last time it arises in Wisconsin. Trone said Total Wine & More, which will have 150 stores in 21 states by the end of the year, is looking at two sites for additional stores in the metro Milwaukee area, and another on the west side of Madison.