A Chat with Jonathan H. Newman, Chairman PLCB

[mrbigjas]

The LCB is the exclusive retailer and wholesaler of wine and spirits in the Commonwealth.  Beer is sold by private industry in Pa.

how about that--i thought y'all controlled the whole shebang. you learn something new every day!

The Kane Report, which chronicles  alcohol beverage consumption nationally, pointed to Texas and Souteastern Pa. as the two markets where beer sales are dropping most dramatically. I think we are doing a better job marketing and making the PLCB more consumer friendly.

you sure are.

a followup question, which is kind of related to your whole plan to further educate your employees about wine: have you considered going beyond tastings and offering wine education 'classes' of sorts for the public? it would seem that if you're developing a curriculum to give your employees a broad range of knowledge about these sorts of things, that the public could probably benefit from a similar program. and it would seem from the sheer size of the lcb, the economies of scale might make it feasible to do it for a reasonable price.

i know, for instance, that if i had had the opportunity to learn more about these things when i was younger, i wouldn't be in the situation that i am, playing catchup in my 30s.

[Capaneus]

I'll add my thanks to the chorus, if I may, and jump in with a question about the PLCB's future: I have recently heard that you plan to retire from your position (presumably to begin drinking up your cellar - let us know if you require help), and I was wondering, given how much of the last few years' improvements seem to be a result of your dedication to the process, whether there are now institutional safeguards to keep moving the process forward, or whether you expect your successor to share your passion.

[percyn]

Yet again, welcome, Chairman Newman. 

Big thanks for chatting with us here, as well as  for all the improvements we've all been enjoying at the stores, and on-line. I applaud the  staff training program you've already mentioned, and indeed, nothing will beat the personal experience of the salespeople actually tasting the wines. But salespeople are never going to be able to have a good assessment of every wine on the tip of their tongues, nor the time to chat in depth with every customer. So I'd encourage you to add more shelf tags wherever possible, perhaps created by you folks as you make your decisions about what to carry, or in the course of your training tastings.

[..snip]

That is good constructive criticism.

We have to do a better job with point of sale materials to help our consumer. In a few stores like Bryn Mawr and 12th and Chestnut, we have computer kiosks with informational wine links. Our e-commerce website at www.pawineandspirits.com is also a valuable resource. There is a wine of the month club, of which I am a member, that offers great selections from boutique wineries with detailed information on all of the wines. At www.lcb.state.pa.us, you can now check real-time inventory of all products at individual stores. Later this spring, we will have Star Wine racks in our Premium Collection stores to highlight wines selected by the best sommeliers in the World in a top tasting competition conducted in Philly this winter. I will pass your comments on to our marketing team and stress the importance of employee training and point of sale information to allow the consumer to make a more informed decision.

Thank you for all your kind words and thoughts.

The premium store I frequent seems to have 2-3 salespeople who are knowledgeable on wine. Perhaps if we let the individual stores pick a few selections that their staff liked, it may be a good start. Let them make small hand written shelf-tags if they are so inclined.

I may have already seen the star wine racks in Exton and the wine tastings also help the consumer make their own decisions. Just today I sampled 4 PNs at the Exton store and bought 2 (including a Foley) and 3 other chairman's selections...need to expand my cellar now .

Cheers

Percy

Edited April 25, 2005 by percyn (log)

[percyn]

Welcome Mr Newman,

I will echo the sentiments of the previous posts in saying that in the past 2 years I have witnessed a tremendiously positive change in PLCB, which I hope will continue.

While I love the features such as the chairman's selections, wine club of the month, online store (with occassional free shipping), in-store wine tastings, etc, one day I hope to be able to buy fine wine (and beer) at my local Wegmans (as I used to when I lived in Princeton), along with my groceries for the week. Do you see this becoming a reality and if so when?

I have also heard different information on the ability to purchase wine futures; do PA residents have the ability to buy futures or "pre-order" bordeaux? Could you please help clarify? Also, despite PCLB's buying power, it seemed like the amount of 1st growth 2000 Bordeaux we were able to get was pretty low. Were we not able to purchase the desired quantity or was the demand high enough that I did not see it hit the store shelves?

Cheers

Percy

P.S: Keep up the good work

[Behemoth]

Thanks for doing a Q&A Mr. Newman! I am a longtime Philadelphia resident who recently (for career reasons) moved to Urbana, IL. I really appreciated the new Sunday hours (alas right as I was leaving!) and the pricing advantage you can get as a large buyer. But my experience with wine stores in my new state has highlighted one serious disadvantage you guys have.

My favorite area wine store around here is small and owned by one person. I think they have two branches, the other one in Springfield. They have youngish, adorably wine geeky buyers who specialize in certain regions -- travel to those regions and pick up small stuff they think is interesting. If you go to the store, you just tell them what you like and how much you would like to spend, and chances are they will be able to give you a precise description of several difference bottles, and eventually help you find the perfect match. They often take you in directions you would never have thought of. I have rarely seen any of their bottles at a local supermarket, and some have become all-time favorites that I will definitely miss when I eventually move away from here. Granted there are good mass market wines out there -- and I buy those too -- but a big part of the charm of wine is finding something new and relatively undiscovered, and I think you miss that when every store in the state is carrying the same thing. In Philly I always felt like I got stuck buying the same 5 or 6 things all the time, never any great surprises, and the staff just wasn't that dedicated or deeply familiar with the product.

Again, I really appreciate all you've done for us Philadelphia wine lovers, (I will always consider myself a Philly person) but I don't think we will be a world class wine-drinking city until wine merchants are made completely independent of the state. Would love to hear your thoughts on this.

[Diann]

Dear Chairman Newman,

First, let me echo the appreciation of others on this thread for taking the time to answer our questions. I also wanted to thank you for instituting the Chairman's Selections programs, since they have given me (a college student trying to teach herself about wine) a chance to drink some truly great bottles of wine for under $20 a bottle.

I just have one question for you -- recently, Ristorante Panorama hosted a Chairman's Selection wine dinner that sounded great, although unfortunately, I was unable to attend. Do you plan on having more events of this type, or as was suggested by other posters, other types of wine tasting/education events?

Thanks again!

Diann

[Jonathan Newman]

That is good constructive criticism.

........At www.lcb.state.pa.us, you can now check real-time inventory of all products at individual stores. Later this spring, we will have Star Wine racks in our Premium Collection stores to highlight wines selected by the best sommeliers in the World in a top tasting competition conducted in Philly this winter. .........

←

I must say, Mr Newman, that the online inventory on the ecommerce site was an explosive step forward for the system and is a great tool that I use almost daily. Hooray! I also want to say that the Star Wine idea is very exciting - it would be nice to have some trusted options beyond Parker (and perhaps Wine Spectator) ratings, although I appreciate both of these entities as useful guides.

Are there other ideas or upcoming changes in the works that you can clue us into now?

BTW, Special thanks for your thoughts on my question above!

Evan

←

I really do appreciate all the positive feedback. Thank You.

We do have many exciting changes in store for the next couple of years.

There are many more one stop shops in grocery stores to be opened, including a Clemens in New Britain, Lionville and Malvern, Fresh grocer in west Philly, Fox's supermarket in Hershey, and Giant Eagle in Cranberry,...

Many more Premium Collection stores, including: Sewickley, Robinson Town Center and the Bill Green shopping center in the Pittsburgh area, expanded outlet stores at West Goshen and Franklin Mills, a beautiful store in Quakertown, and Whitehall in Lehigh County, to name a few.

The Chairman Selection Program is expanding and I believe you will be favorably impressed by the deals coming this Spring and Summer.

Next year you will be able to check all the inventory at your local store on-line, purchase it on your credit card and have your order waiting for easy pick-up at the store.

Our upcoming wine festivals and on site stores in Philly, Harrisburg and Pittsburgh will be even better this year. The winemaker dinners on Monday night in Philly can be accessed at the phillymag website.

More samplings at premium Collection stores, better product selection, more diverse accessory offerings, and a priority on even better customer service. We also have a few other surprises.

[Jonathan Newman]

The LCB is the exclusive retailer and wholesaler of wine and spirits in the Commonwealth.  Beer is sold by private industry in Pa.

how about that--i thought y'all controlled the whole shebang. you learn something new every day!

The Kane Report, which chronicles  alcohol beverage consumption nationally, pointed to Texas and Souteastern Pa. as the two markets where beer sales are dropping most dramatically. I think we are doing a better job marketing and making the PLCB more consumer friendly.

you sure are.

a followup question, which is kind of related to your whole plan to further educate your employees about wine: have you considered going beyond tastings and offering wine education 'classes' of sorts for the public? it would seem that if you're developing a curriculum to give your employees a broad range of knowledge about these sorts of things, that the public could probably benefit from a similar program. and it would seem from the sheer size of the lcb, the economies of scale might make it feasible to do it for a reasonable price.

i know, for instance, that if i had had the opportunity to learn more about these things when i was younger, i wouldn't be in the situation that i am, playing catchup in my 30s.

←

This is a good suggestion.

Next week's wine festivals are great events to educate consumers. At the Phila. Convention center, we will have many selections from 150 of the most prominent wineries in the world. We are also getting reknown winemakers to do grand opening events at all the new stores we are opening. At lcb.state.pa.us, we now have a detailed list of all the in-store samplings with the products, store locations and dates. We should be doing more and I will continue to think of creative ways of making wine education for our employees AND customers a top priority.

Thank You.

[Jonathan Newman]

I'll add my thanks to the chorus, if I may, and jump in with a question about the PLCB's future: I have recently heard that you plan to retire from your position (presumably to begin drinking up your cellar - let us know if you require help), and I was wondering, given how much of the last few years' improvements seem to be a result of your dedication to the process, whether there are now institutional safeguards to keep moving the process forward, or whether you expect your successor to share your passion.

←

I have a lot of work to do at the PLCB and I'm planning on sticking around. We have some great folks at the LCB like our Director of Marketing, Jim Short; Dee Costello does a great job on the www.pawineandspitis.com website and the wine club, and Liza Galia, is one of the top wine buyers in the United States. Ultimately, when I do leave one day, I hope the Governor will appoint and the Senate must then confirm a quality individual who is looking out for the consumer and has business saavy.

[Jonathan Newman]

Welcome Mr Newman,

          I will echo the sentiments of the previous posts in saying that in the past 2 years I have witnessed a tremendiously positive change in PLCB, which I hope will continue.

          While I love the features such as the chairman's selections, wine club of the month, online store (with occassional free shipping), in-store wine tastings, etc, one day I hope to be able to buy fine wine (and beer) at my local Wegmans (as I used to when I lived in Princeton), along with my groceries for the week. Do you see this becoming a reality and if so when?

            I have also heard different information on the ability to purchase wine futures; do PA residents have the ability to buy futures or "pre-order" bordeaux? Could you please help clarify? Also, despite PCLB's buying power, it seemed like the amount of 1st growth 2000 Bordeaux we were able to get was pretty low. Were we not able to purchase the desired quantity or was the demand high enough that I did not see it hit the store shelves?

Cheers

Percy

P.S: Keep up the good work

←

Percy,

We have now opened 8 one stop shops and plan to open many more. This has been one of the most exciting PLCB innovations and it has been warmly received by our customers. We are paying $84,00 rent at the Clemens in Blue Bell and the store will do over $4 million in sales this year. The supermarket has also reported that their sales are up dramatically.

I read an interesting article in Decanter magazine that most of the 00 Bordeauxs are now selling below their release prices. There was a run on the 00s as soon as they hit stores because of all the publicity. I also hear mixed reports on the 03s and wonder whether most futures will pan out. It is certainly something we can take a close look out as a courtesy to our consumers who may have interest.

I appreciate your confidence in me. Thanks

[Jonathan Newman]

Thanks for doing a Q&A Mr. Newman! I am a longtime Philadelphia resident who recently (for career reasons) moved to Urbana, IL. I really appreciated the new Sunday hours (alas right as I was leaving!) and the pricing advantage you can get as a large buyer. But my experience with wine stores in my new state has highlighted one serious disadvantage you guys have.

My favorite area wine store around here is small and owned by one person. I think they have two branches, the other one in Springfield. They have youngish, adorably wine geeky buyers who specialize in certain regions -- travel to those regions and pick up small stuff they think is interesting. If you go to the store, you just tell them what you like and how much you would like to spend, and chances are they will be able to give you a precise description of several difference bottles, and eventually help you find the perfect match. They often take you in directions you would never have thought of. I have rarely seen any of their bottles at a local supermarket, and some have become all-time favorites that I will definitely miss when I eventually move away from here. Granted there are good mass market wines out there -- and I buy those too -- but a big part of the charm of wine is finding something new and relatively undiscovered, and I think you miss that when every store in the state is carrying the same thing. In Philly I always felt like I got stuck buying the same 5 or 6 things all the time, never any great surprises, and the staff just wasn't that dedicated or deeply familiar with the product.

Again, I really appreciate all you've done for us Philadelphia wine lovers, (I will always consider myself a Philly person) but I don't think we will be a world class wine-drinking city until wine merchants are made completely independent of the state. Would love to hear your thoughts on this.

←

Thank you for your support and encouragement.

We are trying to stock our stores with more unique offerings. Our listed wines are pretty extensive and compared to the average retail store in the private sector, I believe we have more selections than most. The product selection at our 55 Premium Collection stores is pretty amazing. If you visit stores like Ardmore, Bryn Mawr, West Goshen, Cedar Crest Plaza in Allentown or the Waterworks in Pittsburgh the choices are overwhelming. When winemakers visit our Premium Collection stores they often comment that they are some of the most impressive and well stocked stores they have seen anywhere in the Country. The Chairman Selection program has expanded and there are now well over 20 hot deals of amazing wines in our stores at any given time. I understand that we have a lot of work to do, but I am proud of the turn-around we've made and our numbers show that we are doing something right.

[Capaneus]

One small problem I have with the PLCB system is closely related to the advantages you derive from your size and purchasing power: with so many stores, the quantities of some tightly-allocated wines available to each store can be tiny, and are often not replenishable. So far so good, realities of the business and all. But when doing inventory searches state-wide for a given item I had trouble tracking down, some things become apparent: certain stores in... less urban areas, shall we say... get allocations comparable to the larger Philadelphia outlets; and those allocations frequently remain in stock there for quite some time.

(It's also the case that Harrisburg stores seem to get very generously supplied ;-)

My question then: to what extend is the distribution demand-driven, versus being beholden to unfortunate political realities; can the system be made more responsive to local demand; and is there a way in which I can get my greedy mitts on all that sweet, sweet Harrisburg-bound juice without going through the electoral process?

Edited April 25, 2005 by Capaneus (log)

[Deidre Costello]

Hello Jonathan, Thanks for the note of confidence in an earlier post.

I thought that it might be beneficial to people viewing this forum if you could share some numbers on the amount of monies generated by the PLCB that is turned over to the general fund. You mentioned the 18% earlier but I think it is important for consumers to know the total revenue turned over, and that all revenue generated through the PLCB stays in Pa and benefit Pennsylvanians.

Dee

[Jonathan Newman]

Dear Chairman Newman,

First, let me echo the appreciation of others on this thread for taking the time to answer our questions.  I also wanted to thank you for instituting the Chairman's Selections programs, since they have given me (a college student trying to teach herself about wine) a chance to drink some truly great bottles of wine for under $20 a bottle.

I just have one question for you -- recently, Ristorante Panorama hosted a Chairman's Selection wine dinner that sounded great, although unfortunately, I was unable to attend.  Do you plan on having more events of this type, or as was suggested by other posters, other types of wine tasting/education events?

Thanks again!

Diann

←

Diann,

Thank you so much for your nice comments. In the last couple months, I have done dinners at Le Bec Fin, Savona ,Panorama and other restaurants throughout the Commonwealth. As these events come along I will forward them to katie so she can post them.

[Jonathan Newman]

One small problem I have with the PLCB system is closely related to the advantages you derive from your size and purchasing power: with so many stores, the quantities of some tightly-allocated wines available to each store can be tiny, and are often not replenishable. So far so good, realities of the business and all. But when doing inventory searches state-wide for a given item I had trouble tracking down, some things become apparent: certain stores in... less urban areas, shall we say... get allocations comparable to the larger Philadelphia outlets; and those allocations frequently remain in stock there for quite some time.

(It's also the case that Harrisburg stores seem to get very generously supplied ;-)

My question then: to what extend is the distribution demand-driven, versus being beholden to unfortunate political realities; can the system be made more responsive to local demand; and is there a way in which  I can get my greedy mitts on all that sweet, sweet Harrisburg-bound juice without going through the electoral process?

←

Your information is incorrect.

Allocations are done based on the demographics of the market and historical sales at stores. The two stores that receive the highest allocation because of their sales history are Ardmore in Montgomery County and the Waterworks near Pittsburgh. The store at 333 Market in Harrisburg probably recieves the lowest allocation of any Premium Collection/Specialty store in the Commonwealth. The new store on the east shore in Harrisburg is not one of the top 25 stores in terms of allocated wine.

[Jonathan Newman]

Hello Jonathan, Thanks for the note of confidence in an earlier post. 

I thought that it might be beneficial to people viewing this forum if you could share some numbers on the amount of monies generated by the PLCB that is turned over to the general fund. You mentioned the 18% earlier but I think it is important for consumers to know the total revenue turned over, and that all revenue  generated through the PLCB stays in Pa and benefit Pennsylvanians. 

Dee

←

Hi Dee,

This year the PLCB will have gross sales of $1.45 billion dollars and we expect total contributions to the Commonwealth of more than $363 million including taxes collected, profit transfers, funding of the State Police-LCE and Dept. of Health drug and alcohol programs. We are projecting sales of $1.54 billion in FY 05-06 and generating more than $407 million in revenue for the Commonwealth.

[MarketStEl]

Hi Dee,

  This year the PLCB will have gross sales of $1.45 billion dollars and we expect total contributions to the Commonwealth of more than $363 million including taxes collected, profit transfers, funding of the State Police-LCE and Dept. of Health drug and alcohol programs. We are projecting sales of $1.54 billion in FY 05-06 and generating more than $407 million in revenue for the Commonwealth.

←

This, I assume, includes the infamous Johnstown Flood (1937) Relief Tax.

Since I assume that Johnstown's gotten enough revenue from this tax to repair the damage caused not only by the 1937 flood, but by the 1889 disaster and any floods that have occurred in between or since these, we may expect to see it repealed soon?

Seriously: What are the prospects for the elimination of this tax? (And whose pockets will the General Assembly reach into to replace the lost revenue, which I imagine now goes into the general fund?)

[philadining]

Does the PLCB have an official position on shipping of wines or spirits into PA from small out-of-state producers? I know there are couple of court cases addressing this kind of thing, so I know it's not simply up to your state agency, and I can actually understand some of the arguments for keeping a state institution in-the-loop (although for pure convenience, I'd prefer to have stuff shipped to my house.)

But if I stumble across a tiny winery in Paso Robles and would like to buy a case of wine without trying to cram it into the overhead bin on an airplane, I'd love to be able to ship it home somehow. Even if I had to ship it to a State Store, where I later picked it up and paid tax and some handling fee, and proved I was of age, I might be able to live with that. Of course I'd rather send it right to my house, but I can see how that might not work.

I've had some really good wines made by two guys in a building not much bigger than their garage, and I can see that it would never be worth it to them to go through the hassle of becoming an official vendor, in order to sell a couple of bottles to people in PA.

Is there, could there be, some structure by which i could legally buy a case from some microproducer somewhere out of state, or join their wine club?

[Jonathan Newman]

Hi Dee,

  This year the PLCB will have gross sales of $1.45 billion dollars and we expect total contributions to the Commonwealth of more than $363 million including taxes collected, profit transfers, funding of the State Police-LCE and Dept. of Health drug and alcohol programs. We are projecting sales of $1.54 billion in FY 05-06 and generating more than $407 million in revenue for the Commonwealth.

←

This, I assume, includes the infamous Johnstown Flood (1937) Relief Tax.

Since I assume that Johnstown's gotten enough revenue from this tax to repair the damage caused not only by the 1937 flood, but by the 1889 disaster and any floods that have occurred in between or since these, we may expect to see it repealed soon?

Seriously: What are the prospects for the elimination of this tax? (And whose pockets will the General Assembly reach into to replace the lost revenue, which I imagine now goes into the general fund?)

←

The Johnstown flood tax is certainly a good part of the PLCB revenue stream. I do not see the Flood tax being reversed which is why we have to use our purchasing power to deliver competitive pricing. If the revenues disappeared, taxes would probably go up because the funds go to the general fund and educate children and build roads. The lesson of the Johnstown flood tax is that there is no such thing as a temporary tax.

[Jonathan Newman]

Does the PLCB have an official position on shipping of wines or spirits into PA from small out-of-state producers? I know there are couple of court cases addressing this kind of thing, so I know it's not simply up to your state agency, and I can actually understand some of the arguments for keeping a state institution in-the-loop (although for pure convenience, I'd prefer to have stuff shipped to my house.)

But if I stumble across a tiny winery in Paso Robles and would like to buy a case of wine without trying to cram it into the overhead bin on an airplane, I'd love to be able to ship it home somehow. Even if I had to ship it to a State Store, where I later picked it up and paid tax and some handling fee, and proved I was of age, I might be able to live with that. Of course I'd rather send it right to my house, but I can see how that might not work.

I've had some really good wines made by two guys in a building not much bigger than their garage, and I can see that it would never be worth it to them to go through the hassle of becoming an official vendor, in order to sell a couple of bottles to people in PA.

Is there, could there be, some structure by which i could legally buy a case from some  microproducer somewhere out of state, or join their wine club?

←

My recommendation is that after the Supreme Court hands down its decision, the Legislature schedule hearings to decide how to comply with the Court's opinion that serves the best interests of the residents of the Commonwealth. This should include a diverse cross section of all the interested parties and should be done in a thoughtful manner.

The PLCB does have access to over 11,000 wineries through our SLO system. We cannot realistically stock wine from all wineries. Each store has the SLO list and can tell you if the winery makes its products available and whether it must be the purchase of a full case. Get to know the folks in the stores and I think you'll find that they really do want to help you.

[Jonathan Newman]

I have really enjoyed this forum. I would like to thank Katie and everyone who participated. The questions were very intelligent and interesting. The participants were all very positive and some of the suggestions are quite helpful. I believe that the PLCB has made a lot of progress in the last few years and I am proud of everyone in our organization. There is still much work to be done to make the PLCB even more consumer friendly, but I genuinely believe that the changes have been making a real difference from the way things used to be.

I appreciate all your positive feedback and kind words.

[mrbigjas]

thank you for having this. we really do appreciate it.

[shacke]

thank you for having this.  we really do appreciate it.

←

A genuine thank you from me as well. Stop in and lurk the wine thread when you can.

Much continued success in the future - your accomplishments are a benefit to us all.

Evan

[KatieLoeb]

I'd like to thank Mr. Newman for taking the time out of his busy schedule to accomodate us here at eGullet. It's a rare honor to have the ear of a public official that's so enthusiastic for the feedback. This has been a truly fascinating discussion, with intelligent commentary and excellent constructive criticism. I couldn't be prouder of how well this chat went. I think both the eGullet consumers and the PLCB gained a lot of valuable insights about the "other side" from our exchange. I'm so pleased to have been able to arrange this. Bravo to everyone for their insightful questions and to Chairman Newman for his thoughtful answers. I look forward to a long and mutually beneficial partnership with the PLCB and will keep you all abreast of the news and events I am informed about.

My sincere thanks and gratitude to everyone that participated.