The Advisor Magazine - Issue #1 : simplebooklet.com

ADVISOR T H E THE NATION S LEADING LIQUOR STORE LICENSE RESOURCE M A G A Z I N E March 2021 Issue 1 2021 WHAT DOES THE FUTURE HOLD navigating the new norm Pg 12 PLUS Innovate or Die Uber buys Drizly in 1 1 billion deal Pg 4 The rules of the game have changed with the pandemic consumers are not the same Do you know who they are now Pg 3 Preparing For Battle Cumberland Farms vs MPSA Pg 8 When Will The COVID Bump End Pg 6

Article byDan Newcomb  We will forever refer to the worldas "pre-COVID" and "post-COVID". Iwill tell my grandkids about thetime when we were told to stay inour homes and the world sloweddown to a crawl.Liquor stores were deemedessential while restaurants andbars closed their doors to in-personvisits.People found other ways toentertain themselves while drinkingalcohol so when they weren'tstocking up on booze at their localliquor store they were enjoyingtemporary law changes to allowon-premise establishments toprovide alcohol in pick-up orders.Online ordering and delivery forconvenience and as a preferred,safer option for some allowed foran increase in cart value across the boardfor those who welcomed e-commerceoptions.We are seeing insta-cart and other majorbrands warm up to the idea of catering toconsumers who prefer "Amazon-like"service. Order online and within hours, it isdropped on their doorstep.Some retailers are embracing the idea whileothers are lagging behind. The pandemichas forced owners to adapt on the fly toconsumer demand and in conversationswith owners who have been around foryears, some are just not willing to put thetime and effort into making the changesneeded, at the end of their career.With trying to keep stores staffed andstocked, they are choosing to takeadvantage of inflated sales numbers andexit their business for top dollar."Where people drink and how people thinkabout it, has fundamentally shifted.”(Mr. Rellas, WSJ)1 15-minute confidentialcall with our SellerSpecialist will determineyour store value?With all of the ways the world has changed,owners are left with decisions that willimpact the rest of their careers.There is no "right" answer - the question is"which one are you?" If you are interested inconfidently exploring what currentmarketplace value of you liquor store is -we're here for you.Dan Newcomb is the CEO & Founder ofLiquor License Advisor who has grown up inthe industry learning from his Fatherwatching him expand his Mug' N' MuffinFranchise to 23 locations.DID YOU KNOW?THE ADVISOR MAGAZINE  | 3www.LiquorLicenseAdvisor.com

The $1.1 Billion Deal (includes Cash & Stocks) Will Change The Landscape by Glenn Lawler www.LiquorLicenseAdvisor.comTHE ADVISOR MAGAZINE  | 4Glenn Lawler is the BusinessDevelopment Director for Liquor LicenseAdvisor with deep roots in the wholesalemarket.

Article byGlenn Lawler‘The eight-year-old Boston-basedcompany, which has a market-leading footprint in more than 1,400cities across the U.S., offers beer,wine and spirits delivered tocustomers in less than an hour’(Bloomberg Opinion).5With a stuck at home order, avirus plaguing the nation, andmany factors leading to the needto “take the edge off”, Drizly’salcohol delivery serviceapplication skyrocketed with1,600 percent growth.As restaurants pivoted tococktail-to-go service, Uber Eatsand other delivery apps quicklyfound themselves deliveringalcohol, ‘albeit throughsoftware that can verify age for thoseconsumers.U B E R + D R I Z L Y MAKING LIFE EASIER“Wherever you want to go and whatever youneed to get, our goal at Uber is to makepeople’s lives a little bit easier,” Uber CEODara Khosrowshahi said via the release.“That’s why we’ve been branching into newcategories like groceries, prescriptions and,now, alcohol.” (Forbes).3The concept of drinking has transformedover the last year. More casual, morefrequent, more self-sufficient, moreconvenient. Society learned through TikTokand social media that the bartender downthe block at your favorite spot actuallydidn’t have much on you! From“Quarantini’s” to premixed cocktails tobooze delivered right to your doorstep.This is a great opportunity for liquor storesto create more revenue regulated the rightway. Drizly has helped stores set up webpages while managing sales and delivery. Itcan preserve local small businesses andgrow to serve more loyal customers via e-commerce.Liquor store owners will soon be faced withthe decision whether or not to enter therealm of delivery services to stay profitableand competitive with the large retailers.Liquor stores can certainly expand theirreach and the size of the basket in additionto reduce risk on underage deliveries asDrizly has a strict signing policy.In order to prepare for this industrytransition, it’s important to weigh the prosand cons of signing into a partnership withUber/Drizly. This model will be launched inmajor cities first where it will be importantto keep a close eye on the data andanalytics regarding inventory cost,percentage taken by the service, andrevenue accumulated.With Drizly’s help, this seems like a perfectway to bridge the gap between the old andnew generation of legal liquor drinkers, ase-commerce opens a new window ofopportunity for small businesses.A platform filling a niche thatother apps hadn’t previously,BOOMS during the Coronavirus.Drizly is an alcohol e-commerceplatform that facilitates thedelivery of alcohol. Referred toby some as the "Amazon forliquor," Drizly lets users order avariety of beer, wine, and spiritsdirectly from local retailers totheir location through a mobileapp or website.“It takes the 21st Amendment into the 21st century."(Michael Bilello, Wine and Spirits Wholesalers ofAmerica).4AMAZON FOR LIQUORtemporary regulatory changes.Along the way Uber boughtPostmates, further cementing itspush into delivering things otherthan people.’ CNBC2Things came to a head for thetwo apps as Drizly continuednearly monopolizing the deliveryliquor market, and Uber dug theirnails in to keep the #2 spot(after DoorDash) as a fooddelivery platform, while theirtravellers continuously dwindled.Uber acquired Drizly for $1.1billion. 90% stock and 10% cash.Uber’s stock was up more than9% the next morning.Uber loved that Drizly wasalready compliant with localregulations in 1,400 U.S. cities.The company said it wouldeventually integrate Drizly’smarketplace into the Uber Eatsapp.Alcohol delivery hasn’t had thiswindow of opportunity in manystates for legal reasons. Drizly’sapp began bridging consumersto local retailersselling/delivering alcohol, andthen by equipping deliveryworkers with iPhones to utilize aTHE ADVISOR MAGAZINE  | 5

The Liquor Industry Is In NeverBefore Seen TerritoryThere's no doubt 2020 will go down in history asa year that changed history. From now on, we willreference life as "pre-COVID" and "post-COVID". Society has shifted even more towardsconvenience and technology than ever before andit's been accelerated at a rate of adoption that noone could have predicted. The way we live haschanged forever.Specifically, our spending habits, weekendroutines, and social norms. With restaurantsshut down, capacities chopped, and cold weatherupon us; take out has become the new normal.According to Neilsen, key categories in DTC(direct-to-consumer) are seeing 3x bumps ascompared to off-premise sales for wine and thattrend isn't going away any time soon.Since 2019, the volume of liquor sales has had asignificant increase of 15-20%. Call it quarantineboredom, “taking the edge off” of stressful times,or just simply not wanting to go out. This leads us to what we call, “The COVID Bump”. This inflation has shaped our present situationfor premium pricing. The valuation of your storetoday is a multiple of what it would be if therewas no "COVID Bump." THE ADVISOR MAGAZINE  | 6"...the volume of sales hashad a significant increase of 15-20%." by Dan Newcomb

RECESSION PROOFThe pandemic created a stormof fear and the unknown. In hardtimes, investors take theirmoney out of the stock marketand look to industries andbusinesses that they consider"recession-proof".Our phones started ringing. Itwas investors and buyers callingabout our listings. Maybe you have had to scratchand claw your way through 2020with difficulty keeping your storestaffed. We all know that thegovernment's financial supporthas been welcomed with openarms because in some cases it'smore lucrative than going backto work! Maybe you have had to be the onebehind the counter at times to keepthe doors open.Maybe you have had to deal withrestrictions and new protocols thathave caused you to have to invest inadditional safety measures. Maybeyou worked so hard in 2020 that youare feeling "burnt out" today and youhaven't had time to breathe. Maybeyou've been thinking about retiringbut were planning on waiting another2-5 years. Maybe you're tired ofbattling for "territory" with the grocerystore or box store down the street. Maybe it's time NOW.THE "MAGIC NUMBER"We forecast that by the end of Q2 andmoving into Q3 sales will start tolevel off in the off premise industry. We predict this will very much bealigned with the successful roll out ofthe vaccine.Once the world starts to find it's "newnormal" the "bump" will level off. This leaves a small window ofopportunity for owners who arelooking to get the most ROI out oftheir investment. IS NOW THETIME?NOW is the time to capitalize on the uptick in sales volume whileinvestors and buyers are willing to value your store at a premium. Amultiple of what you would normally receive.Maybe you are a brick-and-mortar, independent liquor store. Maybe youown more than one store. Maybe you are a part of a large liquor storechain. The fact of the matter is, when it comes to the impact of the pandemicon the liquor industry, there are long-term and short-term trends that willimpact all of our futures.THE ADVISOR MAGAZINE  | 7"What's available right now?”

Dan worked diligently by our side from the start to the end of avery difficult, emotionally charged, process with many uniqueobstacles to overcome. Throughout the process, Dan wasthoughtful, respectful, and a great sounding board. He helpednegotiate a great deal and had a buyer for our chain of 3 storesvery quickly. At the end of the process, there is no doubt in mymind why he put the word “advisor” in his business's name. Iam very glad we chose Liquor License Advisor to broker oursale and would highly recommend their services to anyonelooking to sell a business.www.LiquorLicenseAdvisor.com

How Do We Do It?We've heard all of your questions, nothing isa surprise to us anymore!Over the decades and 1300+ transactionslater, we've developed systems andprocesses that produce win-win-win resultsfor all parties involved.The Match Method™ is our proprietarysystem executed by our dedicated team ofseven. We are here for you. THE ADVISOR MAGAZINE  | 11Founder, CEOLiquor License AdvisorD A N N E W C O M Bdnewcomb@llausa.com617-306-1551Click To Play Video:

NAVIGATING THE NEW NORMSome are calling it the "COVID Hangover" whileothers are preparing for the "rebound effect"when the majority of the population reaches"herd immunity" after the vaccine rollout.One thing we can all agree on is the past 12months have been a whirlwind and a time-warpall in one. Consumers have changed and thus,the market has shifted for good.As a liquor store owner (or even a keenrestaurant or bar owner looking to piggyback oncurrent trends), there are 4 key areas that we'drecommend focusing on for 2021 according tothe current trends. Premiumization of Brands & Categories. Withconsumers spending so much time close to homethey found ways to entertain while at home via Zoomor simply to "treat" themselves.Some of the categories that benefited fromconsumers levelling up their tastes were Super (+16%growth) and Ultra Premium (20.4% increase) Tequila,and Cognac (+25.5% in 2020).7The affinity for local and craft also grew through 2020especially in the premium craft beer and non-alcoholicand functional drink categories. These segmentsallow owners to cater to specific groups and create acommunity within a community if done correctly.by Dan Newcomb

Some retailers and grocers aretaking it to a whole new level bycreating their own "dark store"similar to a warehouse that theytake online orders for and areable to fulfill them using roboticstorage and retrieval systems.Companies like Instacart arelooking to open as many as 50over the course of the next yearaccording to the FinancialTimes. Premixed & CannedCocktails. For those looking fora particular taste and eitherdon't have the time or thepatience to learn how to bartendthemselves, they look topremium canned cocktails.This segment grew at anincredible amount of 55.2% in2020 according to Sip Source'sAnnual Report for 2020.7 Active Agers & Alcohol. Maybeone of the most under marketedsegments of the liquor industry is the55 plus demographic. The averageage of the country is growing olderand older when traditionallymarketing is focused on the youngergenerations.They are more open than ever totrying new brands and categories andhave the money to do so. Their habitsare consistent drinking at a moremoderate pace whereas the youngerdemographics are more focusedaround celebrations.6LEVERAGING THE NEW NORMWhatever your niche, any time youcan increase the cart size, it's a greatidea. Based on your location andcurrent customer demographics,there may be an obvious choice fromour 4 key areas discussed here.If you are in the 3-5% of owners whoare looking to exit their business inthe next 2-3 years, increasing yourannual sales totals will net you moremoney at the end of the day when youdecide to sell your store.If you'd like to take advantage of theCOVID Bump and be rewarded at thehighest level since prohibition foryour store, let's talk.We expect the window to be closingfor buyers honouring increased salesnumbers to end near the end of Q2 orbeginning of Q3 - not to mention theunknown coming with theCumberland Farms ballot vote. 2021just might be your year.
"Amazon-like" Technology. With consumers being able to accessanything they want at their fingertips, why not alcohol too? The shelterin place efforts forced consumers to get creative with how theypurchased their alcohol. Apps like Drizly exploded as well as stores andrestaurants with delivery services thrived as many people were willing toput a price on convenience and feeling safe.This is no surprise for the younger generations however for the 55 pluscategory, they also moved outside of their comfort zone to order online.Owners who leverage the technology have added another layer to maketheir business recession-proof and safeguard against consumerpreference for more convenient e-commerce options.THE ADVISOR MAGAZINE  | 13

Ben JerromBuyer SpecialistGlenn LawlerSeller SpecialistDan NewcombCEO, FounderMichelle HansfordListing ConciergeJennifer MedicoTransaction SpecialistNatali WilliamsProject SpecialistHOW HAS COVID IMPACTED THE VALUE OF YOUR BUSINESS?I T O N L Y T A K E S 1 5 - M I N U T E S .G I V E O U R T E A M A C A L L T O D A Y :7 8 1 . 3 1 9 . 9 8 0 0FIND OUT WHAT YOURSTORE'S WORTH.Sherri BeauchampMarketing SpecialistW E ' R E H E R E F O R Y O U ,

The Advisor Magazine runs on a monthly basis to keep stakeholders in theliquor store & liquor license industry in the loop.Liquor License AdvisorSuite 1, 2036 Ocean Street Marshfield, MA 02050 781.319.9800www.LiquorLicenseAdvisor.comCome back for Issue #2 which will address the impactof the vaccine roll out and further loosening ofrestrictions on industry trends & numbers.

The Advisor Magazine - Issue #1

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