John Boyle

jboyle@citizen-times.com

With more than two dozen breweries in town, everybody knows Asheville is "Beer City USA."

But the mountain oasis also is no slouch when it comes to liquor sales, which have steadily climbed at the Asheville ABC Board's 10 stores, jumping from $22.1 million in 2012 to $30.4 million in fiscal year 2016, a 37 percent increase. The strong sales come from increased tourism and more restaurants and bars, not to mention locals who on occasion enjoy something a little stronger than suds.

Cradling a hefty bottle of Jack Daniels whiskey in his arm at the Hendersonville Road ABC store in South Asheville, Mike Taylor said those figures do not come as a surprise.

"What else are you going to do?" Taylor, a 59-year-old grading business owner, said with a laugh. "You got to have something to relax. Everybody loves to come here to visit, and when they do they've got to enjoy themselves."

Shearon Lee, an assistant manager at the store and a 20-year veteran of the Asheville ABC, said they've seen increases every year in mixed beverage sales to local restaurants they serve, as well as to individual customers, including newcomers who have to restock their home bars.

"We had a 91-year-old lady in here yesterday who was restocking her bar," Lee said. "She said she takes two drinks a night for her health."

The local sales, which over the past five fiscal years have averaged an increase of 8.3 percent a year, outpace statewide numbers. Across North Carolina, total sales have increased from $795.4 million in the 2011-12 fiscal year to just over $1 billion in the 2015-16 fiscal year, which ended June 30. That's a 25.7 percent increase, averaging 6.3 percent growth annually.

As a state-run system, the growth is good news for counties, cities and the state's General Fund, which receive profits from North Carolina's 166 individual ABC Boards. Those boards own 425 stores. In Asheville, the board's profits go back to the city and Buncombe County, a total of $2.3 million for the current fiscal year, according to Mark Combs, general manager of the Asheville ABC Board.

High-end sales up

The Asheville board has over 200 permit holders, or establishments that sell liquor. In North Carolina's system, they must buy their liquor from the local ABC Boards. Combs noted that the Asheville board is eighth in the state in overall sales, and fourth in the sales of "mixed beverages," which means sales to restaurants and bars.

With the holiday season here, business will continue to thrive, as November and December purchases constitute about 25 percent of the Asheville board's total annual sales, Combs said.

Those sales figures have risen in part because consumers are opting for more expensive liquors, reflective of a national trend. In noting that supplier sales were up 4.1 percent last year and volume was up 2.3 percent, the Distilled Spirits Council of the United States stated 2015 was the "sixth straight year of increasing their market share relative to beer..."

“The positive performance of distilled spirits is the result of many factors, including market modernization, product innovation, consumer premiumization and hospitality tax restraint,” Distilled Spirits Council President and CEO Kraig R. Naasz said in a news release.

"Premiumization" describes consumers' penchant for buying more expensive, or premium, liquors. Whiskey sales were up for the second straight year, the council reported, with revenues rising 8 percent.

In short, when times are good, people buy better booze.

"My optimistic theory is the economy is improving and people have more disposable income to spend on things like alcohol," said Angela Dills, the Gimelstob-Landry distinguished professor of regional economic development at Western Carolina University. "I think it's clear that people are drinking better booze, and more people are switching toward liquor. So in terms of total expenditures, even if you're drinking the same quantity, you would see higher expenditures."

"Most of the literature and the economic studies suggest that alcohol consumption and economic well-being go hand I hand," Dills said. "When the economy is strong, people drink more. When the economy is going down, people drink less. It seems to be driven mostly by disposable income."

The Distilled Spirits Council notes that millennials, in particular, have discovered the higher-end brands and are a little more adventurous in their choices.

Systemwide in Asheville, Combs said Tito's vodka, which sells for about $22 a fifth, is a perennial top seller. In October, the system sold 257 cases, No. 1 among all liquors and their most profitable item. No. 2 was a old classic, Jameson Irish whiskey, with sales of 160 cases, followed by Smirnoff vodka.

Asheville resident Jon Abbotts, a business developer, said the big sales are no mystery to him.

"People on vacation drink more," he said, "and a lot of people don't drink beer."

Stocking up for the holidays at the Hendersonville Road ABC store, Abbotts was going totally high end, buying a bottle of Bulleit Rye whiskey, which goes for about $100, and Jefferson's Ocean Bourbon, which is aged at sea and can fetch $80 or more.

Tourism pushes sales

While pricier liquor sales are helping with the overall bottom line locally, Combs said the real driver is more tourists and more places that sell liquor, even including some of those microbreweries, which offer liquor to quench the thirst of those who don't like the brew.

Visitation to the Asheville area hovers around 10 million people a year, and the tourists open their wallets. In 2014, 9.8 million tourists spent $1.7 billion, up from $1.3 billion in 2009, when visitation topped 8 million people.

A report conducted for the Asheville Convention & Visitors Bureau found that in 2014 food and beverage buys accounted for most visitor spending, at $449 million, outpacing retail shopping, lodging and transportation.

"Folks come here and they drink," Combs said with a laugh. "I think the Grove Park Inn is the No. 3 single biggest alcohol seller in the state. Sometimes they’ll do $38,000, $40,000 month, sometimes $15,000 a week in the summer. We jokingly call it 'store No. 11.'"

The Biltmore Estate, which has opened a new hotel and a shopping area in Antler Hill Village, is another "huge customer," Combs said.

"Both of them buy premium liquor," Combs said, adding that even their well drinks are "B" brands, or just a notch below the really expensive stuff.

At the Biltmore Estate, Village Hotel General Manager Beth Poslusny said liquor sales at the newest restaurant, Village Social, are better than projected in this first year of operation.

Michael Files is brand director of the Chai Pani Restaurant Group, which operates Chai Pani, MG Road, and Buxton Hall Barbecue, and Botiwalla restaurant in Atlanta. Opening Chai Pani in 2009, they noticed "from the get-go" that they were "part of a trend of restaurants doing more cocktail and therefore liquor sales," Files said, adding that liquor sales increased there by about 10 percent annually on average.

In talking to the general managers at their restaurants, Files said, "they all concurred that liquor sales have been way up from when we opened seven years ago but have tapered off slightly in the recent years, or at least, their growth has tapered off to where it settled in to be more even with beer." Buxton Hall's sales ratios are 47 percent beer, 41 percent liquor and 11 percent wine, "and that has held steady since they opened 15 months ago. At Chai Pani Asheville, beer and wine sales started off the strongest seven years ago, but in 2010 they "punched up the bar program."

"Then after opening MG Road, we punched it up even further and liquor sales have risen dramatically each time," Files said. "Now Chai Pani has roughly the same percentages as Buxton, with beer and liquor being the clear winners. "

"We have always attributed it to a shift toward a resurgence in cocktail culture and interest in cocktails in general," Files said. "I think this trend actually started a couple years before we opened, specifically with places like the bar PDT in New York, which opened in 2007, but I think we were on the forefront in Asheville of this movement toward the same craft and care that was going on with food going into cocktails."

While high-end cocktail bars are still doing well, Files said, "There has been a nationwide movement now in recent years for the 'haute dive' — which is basically a bar with all the DNA of a smart cocktail lounge that knows its stuff, but with a fun and relaxed atmosphere — like a dive."

Anecdotally, he said, their liquor sales have been "growing every year that we have been open," and he expects that trend to continue with the opening of new hotels downtown and the ever-growing numbers of tourists.

That's no surprise to Kathy Brady, who's been the store manager at the ABC store on Hendersonville Road for four years and with the Asheville ABC Board for 18. She said their store sales have increased each month, and mixed beverage sales also are strong

In September, total sales jumped 12.9 percent, mostly driven by mixed beverage sales to restaurants, including those on the Biltmore Estate. A thriving local economy means higher dollar sales, but Brady points out liquor sales are practically bulletproof.

"When the economy is booming, people step up and buy better stuff," she said. "When times are harder, they just drink cheaper stuff."

Jan Davis, a former Asheville City Council member who will begin a term on the Asheville ABC Board this month, spent years as the council's liaison to the board. He remembers times, more than a decade ago, when the local board's profits — and its financial contribution to the city and county — were weak.

He attributes the steadily increasing sales to the taste that millennials and Gen X'ers have for expensive cocktails, coupled with the local board's commitment to building new stores and remodeling older ones. In the past decade, the Asheville board opened new stores on Sweeten Creek Road, Hendersonville Road, Leicester Highway, Tunnel Road and Long Shoals Road.

"We pretty well cleaned house over there and made a lot of changes with the board and the director," Davis said.

Combs points out that the ABC Boards do not operate on tax money. Sales provide their operational expenses, and Combs, who formerly served as director of Public Works for the city of Asheville, said since taking the ABC job in 2011 he's been all about finding efficiencies and cost savings.

Combs' predecessor, Curtis Canty, began the shift to better looking, more open stores and a renewed emphasis on customer service, trends that Combs continued. Combine that with a city surging with high-end restaurants that serve $14 cocktails, and a half-dozen new hotels coming online in the downtown alone, and Davis said he sees liquor sales remaining strong.

"I think with the number of outlets we've got, the amount of mixed beverage being sold, all that will be increasing," he said. "All the good restaurants have good top shelf liquor, and that's going to continue on."

And no matter your political stripe, Davis said he expects the tenure of President-elect Donald Trump to spur more sales. Those who like him feel comfortable with his easing of regulations and stimulation of the stock market, while those who dislike him will be looking to salve their emotional wounds, Davis said with a laugh.

Dills said it's not so much who's in the White House but more what the economy does.

"As long as the economy remains strong, I think alcohol consumption will continue to grow," she said.

What is Asheville drinking?

Top 10 brands in liquor sales for September 2016

1. Tito's vodka (.750 liter)

2. Smirnoff vodka

3. Burnett's vodka

4. Jack Daniels Tennessee whiskey

5. Aristocrat vodka

6. Fireball whiskey

7. Montezuma tequila

8. Jameson Irish whiskey

9. Tito's vodka (1.75 liter)

10 Jim Beam bourbon

Source: Asheville ABC Board

Fiscal year, sales, percentage increase and income from operations

2016 — $30.4 million, 8.6 percent increase, 3.3 M in income.

2015 — $28M, 10.2 percent, $3.1M

2014 — $25.4M, 7.2 percent, $2.4M

2013 — $23.7M, 7.3 percent, $2.1M

2012 — $22.1M, $1.8M

Source: Asheville ABC Board

North Carolina alcohol sales, by fiscal year

2015-16: Liquor: $810.5M. Mixed Beverage: $191.3M, Total: $1B. Total percent increase: 7.31 percent.

2014-15: Liquor: $757.5M, Mixed Beverage: $176M. Total: $933.5M, Total percent increase: 7.6 percent

2013-14: Liquor: $701.7M, Mixed Beverage: $165.8M, Total: $867.6M, Total percent increase: 4.8 percent.

2012-13: Liquor: $667.5M, Mixed Beverage: $160.1M, Total: $827.7M, Total percent increase: 4.1 percent.

2011-12: Liquor: $640M, Mixed Beverage: $155.4M, Total: $795.4M, Total percent increase: 6.5 percent.

Source: North Carolina ABC Commission