DRY COUNTY BY RYAN PITKIN

from Queen City Nerve - November 3, 2021

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NEWS & OPINION FEATURE DRY COUNTY

ABC struggles to keep up with liquor demand in Mecklenburg County

BY RYAN PITKIN

In a public Facebook post on Oct. 20, the owner of a popular cocktail bar in Charlotte posted a screenshot of a North Carolina Alcoholic Beverage Control (NC ABC) liquor order he was attempting to fill out online. In the picture, 15 of the 16 available brands in the frame came with a warning: “Item has low stock.” This means a bar owner can order that brand, but they may not get the order filled.

“How do I run a business like this? No I am really asking…” read the caption.

Among the 146 responses were not many answers to the question at hand, but dozens of confirmations and commiserations from fellow bar owners and managers in Mecklenburg County.

“Just ordered like $1,500 worth and they filled less than $300,” wrote the owner of a popular music venue.

“Weekly 12-15k order gets dwindled down to 3k-5k max if we are lucky,” added the owner of a new South End restaurant.

Another said their $4,000 order resulted in just $2,100 worth of product.

In July, the North Carolina Spirits Association (NCSA) and Mecklenburg County Alcoholic Beverage Control Board addressed the shortage, blaming it on consumer consumption trends coupled with disruptions in logistics.

In the time since, local bar and restaurant owners say things have only gotten worse. While shortage are not uncommon in a wide range of industries thanks to supply-chain issues across the globe, service industry folks in surrounding counties and South Carolina say they aren’t experiencing the same issues. So what’s going on in Mecklenburg County?

The shortage begins

For Jackie DeLoach, owner of Hattie’s Tap & Tavern, the problems began in early 2021 with a tequila shortage. After that, sales reps with the popular Kentucky whiskey brand Bulleit informed her the company had run out of glass bottles, leading to supply shortages there.

“Then it kind of just snowballed from there,” she said.

As time progressed, DeLoach found that her weekly orders for liquor from Mecklenburg ABC were becoming less reliable.

According to laws enforced by the state’s Alcoholic Beverage Control Commission, DeLoach must order from an assigned ABC store in her county. Hattie’s is assigned to Store 19 on North Tryon Street.

Since that specific store serves as the warehouse for the county, one would expect it to be one of the more reliably stocked locations. However, as time has gone on, it’s become more rare for her to receive the things she orders.

“If I wanted to place my regular order, I would only get 10% of it,” she told Queen City Nerve.

While orders used to be filled on the day they were placed, DeLoach now finds herself waiting three to five days to see what they can sell to her.

If ABC is short on a cheaper brand, known in bars and restaurants as a “well” brand, they’ll replace it with another cheap brand, but if a name brand is short in supply, ABC simply leaves it out of the order.

It’s only when DeLoach finally receives her order that she can she go looking for whatever was not included.

Lately, she’s had to go to five or six stores each week just to find the different brands she needs to run her business. The max amount of locations she’s had to hit in one day has been eight.

What’s worse, she said there is no communication from Mecklenburg ABC about what’s being done to fix it.

“They didn’t say anything,” DeLoach said, looking back to the beginning of the shortage issue. “It was basically, ‘Figure it out.’ My liquor reps, they would kind of give us heads up on certain things, but we’re fed to the wolves. ‘Go figure it out and go run a business with only 20% of liquor coming from your actual store.’”

Addressing the liquor shortage

On July 15, the NCSA and Mecklenburg County ABC Board issued a joint statement addressing product availability and industry challenges.

“Challenges in logistics as well as availability of raw materials across multiple categories and industries impacted by the results of the COVID-19 pandemic are prevalent,” the statement read. “For the spirituous liquor industry, glass and key raw material ingredients for plastic closures are the main drivers of constraint. Multiple suppliers are escalating alternative options as quickly as possible to address this challenge. Compounding conditions, the industry has experienced a significant decline in number of drivers.”

The release also pointed to a skyrocketing demand for liquor in Mecklenburg County and statewide as one reason for the shortage.

“Easing COVID-19 restrictions has resulted in an explosive comeback in the on-premise industry,” the statement read. “This is a positive for our on-premise customers/businesses. Consumer retail sales in Mecklenburg County ABC stores continue to outpace prior year sales. The increased demand on both sides contribute to the current conditions.”

According to the July release, on-premise businesses (bars, restaurants and other places where alcohol can be consumed on the property) in Mecklenburg County in the second quarter of 2021 alone sold about 65% of the amount of bottles sold in all of 2020, while retail sales — bought for private use at local ABC stores — that quarter were more than 50% of the bottles sold in 2020.

Queen City Nerve was able to view the Mecklenburg County ABC sales data over the last four years, ending in August 2021, and found that off- and on-premise sales have indeed increased in 2021.

The total dollar amount through August, which sits just above $132 million including on- and offpremise sales, is about a 17% increase compared to the same time frame in 2020, and a 16% increase from 2019.

While liquor sales are up across the state, the increase isn’t as dramatic as it is in Mecklenburg County. A LOOK AT THE SHELVES AT A MECKLENBURG ABC STORE ON OCT. 28. PHOTO BY DION BEARY

What’s being done?

A Mecklenburg ABC spokesperson refused Queen City Nerve’s request for comment, telling us, “Our staff is not providing interviews at this time as they are focused on solutions in meeting customer demands around the current supply chain disruptions that are resulting in low product availability and staffing.”

The spokesperson did provide a flyer that lists ways Mecklenburg ABC is working to address the shortage. These include receiving direct shipments from distillers and spirit brokers, developing a new online ordering system and planning a curbside pickup pilot program for early 2022.

Mecklenburg ABC has also acknowledged they are dealing with their own worker shortage and staff burnout. The board says it has hired a third district manager and three assistant district managers to support operations while also developing an “employee bonus referral program” to help with hiring. Mecklenburg ABC offers a $15-per-hour starting wage for full-time associates.

Queen City Nerve was able to speak over email with Meredith McCormack, president of the NCSA, an organization of retail, brokers and suppliers that represent 96% of total spirits sales in North Carolina.

“As we stand at the end of October, there have been some improvements to address the current supply challenges mainly through improved deliveries from the state warehouse to Mecklenburg ABC, as well as suppliers coordinating direct

shipments to the Mecklenburg ABC warehouse,” McCormack wrote.

She downplayed claims among many in the industry that the problem is worse in Mecklenburg County than elsewhere.

“I know there is much discussion about South Carolina not having the issues North Carolina is experiencing and, while multiple South Carolina retailers along the border have heavily advertised no issue in securing product, their buyers were also quoted in articles on this subject of having items cut on their orders from distributors,” she stated. “The challenges with suppliers delivering inventory to meet consumer demand is not unique to North Carolina or Mecklenburg ABC.”

Queen City Nerve heard from multiple owners, managers and workers in surrounding counties and South Carolina who reported some issues related to national shortages, but nothing like what is being experienced in Mecklenburg County.

McCormack emphasized that Mecklenburg continues to do the most on-premise business of any county in the state, while it also is seeing a continued increase in retail sales. She said NCSA has recommended to the ABC Board that the organization prioritize addressing its challenges with state warehouse space and other logistics in order to increase the on-hand inventory there, which could potentially trickle down to help meet demand in counties like Mecklenburg.

Meanwhile, DeLoach and other bar owners across the county are stuck waiting to see how that works.

“You’re totally left on your own,” DeLoach said. “We literally are just out here like chickens with their heads cut off just trying to figure this out. Nobody’s really saying anything. Every once in a while someone will say, ‘Oh it’s just going to get worse,’ which is not helpful.”

According to McCormack, the issues could very well extend another six months or more.

“With the consumer trends as they are, the projection is these challenges will continue potentially until mid-2022 as supply chain works to increase production to meet current consumer demand,” she told Queen City Nerve.

Until then, it’s likely DeLoach and others will be stuck hunting for specific products at ABC stores around the county, while customers can expect to be let down if they’re searching for a certain brand.