Empire State Cellars, once located in the huge Tanger Mall in Riverhead, Long Island, closed its doors on December 27, 2014. It was unique as the only retail outlet to sell wine, brews, and spirits from all of New York State. Not really a store, it was a satellite tasting room of Peconic Bay Winery, in Cutchogue, on the North Fork of Long Island, whose owners, Paul and Ursula Lowerre, fully financed ESC’s creation. However, Peconic Bay closed the winery doors last year, and closing ESC is another cost-cutting move on the part of the Lowerres, who were unwilling to continue to pay the very high and profit-robbing rent.
The story of how ESC came to be, however, is worth preserving.
Jim Silver, who was the general manager of Peconic Bay Winery until it closed its doors in 2013, first conceived of the idea of a satellite tasting room in 2010, when it became clear that the large number of visitors to the tasting room at Peconic Bay Winery was regularly pressing its capacity.
It was not possible to expand the tasting room given current conditions, so Jim pitched his idea to the winery’s owners that a satellite tasting room in the area could draw yet more people and at the same time provide for exposure not only of Peconic Bay’s own wines, but those of other wineries from all the viticultural regions of New York State, include the American Viticultural Areas (AVAs) of the North Fork, the Hamptons, all of Long Island (which includes Queens and Brooklyn), the Hudson Valley, the Finger Lakes, Lake Erie and the Niagara Escarpment. They liked the idea and gave Jim the go-ahead to follow up on it.
Jim negotiated with the Tanger Outlets Mall in Riverhead for a store location and worked with the State Liquor Authority on the licensing of the premise. The lease was dependent on the license. The cooperation from the SLA could not have been better, given that a mandate of the agency is to help promote New York State wine. When the SLA chairman, Dennis Rosen and his counsel came to talk to Jim, Jim told them, “This is what we’re going to do.” Withal, he explained that, as a NY winery, Peconic Bay Winery was allowed by law to open an off-premise retail outlet.
In this case the outlet would offer not only PBW’s own wines, but those of any and all wineries in NY State, provided that they’d be willing to sell their wines to a competing winery at a fair discount from their on-premise retail prices. (One must understand that most of NY State’s wineries have a very small production, so it behooves them to sale from the winery tasting room, where they can sell at full price with no discount for retailers. On the other hand, a presence at other outlets, including restaurants, gets them a broader exposure to the public.) Furthermore, as a retail outlet of a winery, ESC could also sell wine to restaurants at wholesale prices. The SLA counsel immediately grasped the scope of the idea and observed that this was the three-tier distribution system rolled into one. Indeed, across the United States, wine is typically distributed as follows:
- Wineries can sell to customers directly at their premises or distribute them to retailers by selling at a considerable discount to wholesalers or distributors.
- Wholesalers provide the wine to duly-licensed retailers and restaurants at a price that allows them to sell the wine profitably.
- Retailers then sell the wine to the public with whatever markup they choose to make.
New York, as a leading producer of table wine, has enacted fairly liberal laws on behalf of its wineries, so its laws permitted exactly the kind of retail outlet that Jim had conceived. Ergo, Empire State Cellars. Roughly a third to a half of the wines offered come from Long Island, with the balance coming from the rest of the state. ESC then broadened its offerings to include New York State craft brews and spirits. There are NY Vermouth and Absinthe makers, Bourbon and Single Malt Whiskeys, liqueurs, rums, vodkas, and so on. All craft and all of high quality. Craft brews of all manner are made in New York as well, garnering a great deal of attention and respect. One could have it all by confining oneself to just the products of our State.