An early mover focusing on fine wine, Bordeaux and California futures, and becoming a dual importer/retailer, Addy Bassin’s MacArthur Beverages has become a wine institution in Washington DC.  Phil Bernstein, General Manager of the brick & mortar wine retail store and importer, tells us about how he thinks about wine pricing, direct importing wines, the changes in consumer buying patterns, and more as we continue to delve into the future of wine retail.  Detailed Show Notes: Phil’s backgroundHe grew up in Long Island, played Trumpet, and pursued a career as a professional trumpet playerHe ended up begging for a part-time job at a retail shop in Ann Arbor, MI, and got his start in wineSaw a job at Calvert Woodley in DC on winejobs.com and moved to DCHe moved to Macarthur Beverages so he could become a wine buyer and became GM in April 2018Macarthur Beverages historyAn institution in DC, in the Palisades suburbsFounded in 1957 by Addy Bassin and his wife, RuthOne of the 1st to offer Bordeaux En PrimeurHe was notable for bidding on one of the Jefferson wine bottlesThey had a focus on fine wine from an early stage Both a national shop (because of fine wine focus) and a neighborhood storePre-pandemic - 50% online / 50% in-store; today - 70% online, 30% in-storeUsed to have tastings every Sat in-store to drive foot trafficPeople now do curbside pick up after ordering onlineDoes a lot of DC area delivery (can only legally deliver in DC, not nearby suburbs in MD or VA)Physical store for wine retail - “nothing beats the human interaction”Pricing for wine retail - “price is everything”Believes that price often trumps customer loyaltyLooks at wine-searcher.com when pricing wine, having the best price on wine-searcher meaningfully drives salesUsed to do a standard markup with a case discount, but believes now having the best price upfront is key“Reliability” for MacArthurs is good customer serviceTake care of the wine (temp control, only ship when weather is good)Never makes vintage substitutionsAlways makes good on promises, even if they end up losing money on the saleBoth an importer and a retailerOnly possibly in DC and CA in the USCan buy Bordeaux direct from negociantsHave access to more fine wine from overseasCan cut out the middle man - improving profitability and reducing the price to the customerFinding their wines to direct import - have exclusivity, mostly locallyImports 6-7 full 50ft containers a yearNot allowed to sell to other distributors or retailers~60% of business from wholesalers, ~40% importedBelieves more importers will sell direct over timeBordeaux Futures/En PrimeurThe value of it can vary a lot by campaignThe only way for it to work is for wines expected to either be sold out or at higher prices when the wines are released for customers to tie up their moneyIn most years, En Primeur only works for the top 50-75 wines, which doesn’t make sense for most Petit Chateau2019 campaign - Bordelais knew people couldn’t taste during En Primeur due to Covid, Pontet Canet and Angelus came out early with low prices and set the tone - lots of interest and buying2020 campaign - “somewhat of a dud,” Bordelais took prices back up to between 2018 and 2019 levelsCalifornia FuturesStarting to go away from this modelIn the early 1980s (pre-internet), set up barrel tasting of CA wine producers, people could taste the wines and order futures at a discountE.g., Randy Dunn, Ridge, Shafer were some producersRobert Parker came and did a private tasting after the eventIt has since been taken over by the internet, mailing lists, and wines have wider distributionNow more of a social event, less about selling wineCustomer demographicsLargest revenue from males 45-54Growing population according to Google Analytics - females 35-44, more younger buyers tend to be femaleBuying habits changingThe old model - buy by the case (based on points and price)The new model (as wine prices have gone up and selection has increased) - lots of 1-2 bottle buying,