Quality Controls

Incoming NABCA president George F. Griffin, Director of the Department of Liquor Control for Montgomery County, MD, pledges to continue the pursuit of quality at the National Alcohol Beverage Control Association.

By Cheryl Ursin

Each president of the National Alcohol Beverage Control Association (NABCA) starts off the one-year term by choosing a theme. In 2003, James “Dyke” Nally, superintendent of the Idaho State Liquor Dispensary, chose “Progress Through Partnerships.” Last year, Lynn Walding, administrator of the Alcoholic Beverages Division of the State of Iowa, chose “Embrace Change, Honor Tradition.”

This year, incoming NABCA president George Griffin has chosen “Quality Controls.”

“Over the last several years, members of the association [NABCA] seem to take their role at the association — and the business they conduct there — more seriously than ever before.”
–  GEORGE GRIFFIN,
Incoming NABCA President

“There are two parts to this equation,” explained Griffin, who is the director of the Department of Liquor Control (DLC) for Montgomery County, MD. “First, it is important that the association help members improve the quality of service they provide to their citizens. And second, we also want to demonstrate to the private sector the real, tangible benefits our control systems provide. We have a good story to tell.”

Griffin pointed out that his theme and his goals for his presidency are a continuation of what the NABCA has been doing over the last several years. “The association is in good shape and is on the right track,” he said. “For the last several years, there has been consistent leadership, with presidents building on what previous presidents had done.” Griffin plans to do the same.

For example, the NABCA has been carefully examining the implications of becoming a national voice on alcohol-related issues. “We all think it’s the right thing to do,” reported Griffin. “Now, we’re having discussions about how to do it.”

Facing National Issues

Griffin explained that, more than ever before, control systems are facing issues that are national in scope, such as direct shipment, national advertising campaigns for spirits, large national retail chains, such as Costco and Wal-Mart, looking to buy products directly rather than through the three-tier system. “These are big issues, national issues, and we know they’re going to impact us back home,” said Griffin. “NABCA members need to be prepared and that is better done collectively than individually.”

Not only can the NABCA help its members learn about these national issues, it can also affect the outcome of them. “We represent 19 states, about 25% of the U.S. market,” said Griffin. “We are naturally positioned to have a national voice.”

The NABCA is also a unique player. “We’re not industry and we’re not a public-health group,” Griffin pointed out, “though we have regular interactions with both. And we also have a built-in credibility, as government agencies.”

Jim Sgueo, the NABCA’s longtime executive director, agreed. “The NABCA members are both regulators and providers of alcohol, which puts them in a very unique position,” he explained. “They don’t have an axe to grind. They can provide an unbiased view of how alcohol can be and should be controlled. Industry trade groups represent their members, whether they are distributors or retailers or suppliers. They have a vested interest, as do public-health groups, even if it is only the wish of a scientist to have his or her study accepted. In contrast, we feel we can be a true arbiter.”

The task before the NABCA and its members is how to take on such a role, while allowing its members to carry out the policies of the governors and other officials who appointed them back in their home jurisdictions.

“We can control what our role will be,” said Griffin, even on an issue-by-issue basis. “If there is an issue members are not comfortable commenting on or if there are differences of opinion between our members about it, we don’t have to take a position.”

Continuing Recent Efforts

One of Griffin’s projects, a continuation of Lynn Walding’s efforts from last year, is to form a committee of board members to help identify national issues of importance to NABCA members and determine how best to handle them. “I’m hoping to have several past presidents [of the NABCA] as members,” said Griffin. “Because of their experience, they have a long-standing perspective on national issues.”

“The NABCA members are both regulators and providers of alcohol, which puts them in a very unique position.”
–  JIM SGUEO,
NABCA Executive Director

According to Sgueo, “One of our hopes is that this policy committee will be able to deal with issues as they arise rather than wait until the full board meets.”

The formation of this committee will also formalize how the NABCA approaches issues. “Having consistent, formalized procedures will help make all our members more comfortable,” said Sgueo.

Lynn Walding, the current NABCA president, explained, “The question before us is: can the association take a position that is out of sync with an individual member’s? I was appointed by my governor and my vote is always going to match what my governor wants, but there is an overall benefit to having the association involved in these issues.” Walding, who described the NABCA as “in the infancy of this process, gingerly easing into a more active role,” says the association can impact these national issues, such as spirits advertising, in a way that is beneficial to all members. “If we don’t take the role, some other voice will — and it might not have as favorable an impact,” he said.

“If we [NABCA] don’t take the role [an active voice on national beverage alcohol issues], some other voice will — and it might not have as favorable an impact.”
–  LYNN WALDING,
NABCA President

Recently, for instance, the NABCA sent a letter to a spirits supplier asking it to pull a sexually provocative ad campaign for its product. The voluntary advertising code developed by the Distilled Spirits Council of the United States (DISCUS) for its supplier members stipulates that ads should not show overt sexual activity or promiscuity and should not degrade women.

The NABCA made its move after its board convened via teleconferencing to discuss this specific advertising campaign. “We made sure we were all on the same page,” said Walding, “and the most significant development for us was that the board, as a whole, got involved. It was a collaborative effort.”

Griffin plans to continue the use of teleconferencing to keep board members up-to-date and involved in issues as they arise.

He also appreciates the unique position of the NABCA. “We have regular interaction with top industry leaders,” he pointed out. “We also have regular interaction with public-health advocates and alcohol policy-makers. Some groups that aim to prevent alcohol abuse don’t or won’t or can’t meet directly with suppliers and vice versa. We, having good communication with both, are a meeting place for them — and nobody else fits that bill.”

Practice Makes Perfect

Griffin hopes to make the NABCA even more effective at helping its members achieve quality operations at home. The NABCA, he explained, is unique also in that it allows its members to learn from one another, to “cross-pollinate.”

One of the ways to improve this capability is to continue and to expand a project that grew under several NABCA presidencies and blossomed during Lynn Walding’s: Best Practices. The NABCA just published its first Best Practices Handbook.

The NABCA’s Best Practices Task Force, made up of industry members of the NABCA and of members of the association’s Products & Procedures Committee, looked at how different jurisdictions handled various operational issues, such as listing and delisting products. They recommended several to present at “The Best Practices Summit,” a meeting held last November. Those presentations have now been published as a book. The idea, of course, is to help NABCA members learn from one another.

Griffin, along with Walding, recently attended a meeting with other board members to examine which issues the Best Practices project should tackle next. “I know George wants to keep Best Practices moving forward and expanding,” said Sgueo. “While right now, it has been primarily concerned with operational issues, it may expand to tackle licensing and educational issues next.”

The Best Practices Summit Meeting will likely become part of the annual Administrators Conference, rather than remain a separate meeting. “We’ve got the right people there already,” Sgueo pointed out.

In connection with this effort, the NABCA has also added a new committee to the Administrators Conference, which is held in October. There is now a Warehouse & Logistics Committee. “There are now five committees at the conference,” said Griffin, “so at least five people from each jurisdiction are attending.”

Room to Improve

Griffin plans to work on quality control at the association itself as well.

“Lynn had an ad hoc committee, which had a sit-down meeting in Chicago, [in August of 2004] right at the beginning of his presidency — and that was a great idea,” said Griffin. Walding, whose theme was “Embrace Change, Honor Tradition,” wanted to look for ways to improve the association, specifically its meetings and conferences. The six directors who attended — “We called ourselves ‘The Chicago Six,'” said Walding — reviewed how the association’s meetings and conferences were planned and organized, all with an eye toward improvements. Griffin was one of the participants.

 Outside and inside views of the Fallsgrove store in Rockville,
MD, one of the upscale retail outlets in Montgomery County.

“Sometimes you get so busy, it’s great to take a step back and look at what you’re doing,” he explained. “What are we concentrating on? What do we do well? What should be scrapped? If it’s going well and you don’t want to touch it, fine.”

Griffin plans to have such a meeting of his own. “This year, I am going to do something similar, with mine focusing on membership categories, the dues structure and data sales,” he reported.

Another change at the association, meant to further hone its national voice, is the addition of staff. A longtime NABCA staffer, Tina Schultz, was given a new title, Policy Administrator, and new responsibilities in January. Her job is to facilitate the association’s communication with a range of groups, from governmental entities to public-health advocacy groups, to research groups, community groups and the media. Additional staff members have been hired to aid her in her tasks.

“This is not just to tell our stories and not just to remind people of the benefits of control systems,” explained Sgueo, “but it is also to encourage collaborative efforts between our association and other groups on policy issues, such as upcoming alcohol beverage legislation.”

Currently, the NABCA has a staff of 27 and an annual budget of $5.5 million.

Another project that might commence during Griffin’s presidency is the hunt for a new headquarters for the association. “We’ve become the victims of our own success,” he said. “The national headquarters has run out of space.”

NABCA Evolving

Griffin sees the association as continuing to evolve. “Over the last several years, members of the association seem to take their role at the association — and the business they conduct there — more seriously than ever before,” he said. “When I first started attending conferences, members would leave when their committees were not meeting. Now, almost every director stays for every committee meeting — and it’s really elevated the quality of discussion and made the full board meetings more fruitful, because everyone’s up to speed. That’s a good sign — and a tribute to our members.”

Griffin’s own involvement with the NABCA started even before he was directly involved with the control system in Montgomery County. Before becoming acting director of the county’s DLC in February of 2001, Griffin was one of three assistant chief administrative officers for the county. “The Chief Administrative Officer is similar to a city manager and runs the county on a day-to-day basis, while the county executive is an elected official, like a governor or mayor,” he explained. As an assistant chief administrator, Griffin was the chairperson of a liquor-policy commission for the county and, as such, attended a number of NABCA meetings.

Since becoming the DLC director, Griffin has been active in the NABCA, serving on a number of committees and chairing two, Governance and Finance. “I tell people that serving on the Finance Committee is a great way to learn about the association,” he said. “As you go through the process of crafting the association’s budget, you gain an appreciation for all that we do.” Griffin has also represented the association during meetings with industry and government representatives.

Griffin’s experience with the unique system of Montgomery County will also come in handy during his presidency. Though its jurisdiction is a county and not a state, “in many ways, [the Montgomery County DLC] is the full package,” said Sgueo.

Quality Control in Montgomery County

Montgomery County, Maryland’s most populous jurisdiction — with 942,000 residents in 2005 — is an affluent (median yearly income of over $70,000), urbane (located right outside of Washington, DC) region that has been ably served by its own control system since the end of Prohibition.

While Repeal put the control of alcohol back into the hands of the states, Maryland went one step further. “Maryland, in turn, left the issue up to each county,” explained Griffin, “Some counties stayed dry for a considerable amount of time.”

And two of them — Montgomery and Worcester Counties — became control jurisdictions in their own right. “We’re not the smallest [control jurisdiction] in terms of population,” Griffin pointed out. “We have almost a million people, making us larger than a couple of members.” And when sized by sales, Montgomery County is right in the middle of the pack, with annual sales of approximately $170 million.

The Montgomery County DLC is the only wholesaler in the county to handle alcohol products of any sort: spirits, wine and beer. “Montgomery County always said, ‘Alcohol is alcohol is alcohol,'” said Griffin. The DLC is the only control jurisdiction in the U.S. to handle all three, distributing them to approximately 900 licensees. “And when we’re dealing with issues like advertising and underage drinking,” Griffin said, “it makes sense that we should be talking to more than just spirit suppliers. It is important that brewers be involved.”

It also runs its own retail stores for spirits. There are currently 25 of them throughout the county. “And we recognize — in the face of growing population — that 25 is not the right number,” said Griffin. The DLC is in the midst of relocating, renovating and opening new stores. One new store was opened a few months ago. Another is under construction, due to open next year.

Other stores have been or are in the process of being moved to “bigger, more visible, more accessible locations that will provide better shopping experiences,” said Griffin. “In the past, there might have been some mixed emotions about how aggressively the DLC should be in its retail business. The emphasis was more on control than on service — with the customers being the ones who suffered.”

That thinking has changed. “When your mandate is you are the only one who can distribute alcohol, you owe it to your citizenry to do a good job,” said Griffin.

Improving Operations

And the DLC continually strives to improve its operations. In addition to improvements to its store locations, the DLC has also outfitted all of them with the latest ID-checking technology. “A study a few years ago showed that underage sales in our county were below both state and national averages,” reported Griffin, “and we feel very good about that. At the same time, however, we believe it is important to demonstrate leadership on this issue — and we can always get better.”

Now that the 25 county stores have demonstrated the effectiveness of the technology, some county licensees are also investing in the ID scanners. “We are a metro area, with a lot of colleges and universities nearby,” explained Griffin. “We see IDs from all over the world. And, frankly, just having the device on the counter serves as a deterrent to some degree.”

The ID scanners are only the tip of the technology-improvement iceberg at the DLC. In a department-wide project called Enterprise Resource Planning (ERP), the DLC is upgrading its systems in all areas, with an emphasis on integration. “POS (point of sale), inventory control, accounting, the warehouse, licensee ordering, buyers: they’ll all be tied together,” said Griffin, “from the retail stores, which will have running inventories, to our drivers, who will be equipped with handhelds.”

Sales Increases for Four Years

The DLC has seen sales increases for the past four years. Last year, proved to be the most profitable year in the DLC’s history. The wholesale operation grossed over $97 million, an increase of over 6% from the previous year, while the retail stores grossed over $71 million, an 8.4% increase. The DLC transferred over $20 million to the General Fund.

“We’ve made a larger contribution. We’ve also done a lot of community outreach and education. We’ve built credibility and the county executive and council see the value in letting us invest in further improving our operations,” said Griffin.

The warehouse itself is being expanded, with a 52,000-square-foot addition. As part of the project, the entire warehouse will be equipped with air conditioning. Digital security cameras have also recently been installed around the warehouse.

Employee training has recently been upgraded. Store managers and assistant managers now both have monthly meetings at headquarters. “They not only learn about store procedures,” said Griffin, “but also learn about products.” All retail-store employees are now certified, having completed a state-approved responsible-server training program. In addition, new four-hour training programs, on a variety of topics, have been developed. And all retail-store employees are now given product-knowledge binders that they can add to — such as adding their own tasting notes from training sessions — as they learn.

Community Outreach

The DLC’s Community Outreach division has been working both on educating the public and bringing different groups in the county together to work on alcohol-related issues. “One of the most valuable things Kathie Durbin [the DLC’s community outreach manager] has done is pulling together many different resources and getting them to work together,” said Griffin. For example, Durbin helped to create a Special Events Alliance, made up of representatives from the Department of Economic Development, the Conference and Visitors’ Bureau, the Department of Recreation, the Highway Safety Office, the Board of License Commissioners [the five-person board that issues licenses and holds violation hearings], the Montgomery County Police Department’s Alcohol Unit and the DLC. The goal of this group is to gather all the information a person or organization would need to plan a special event in the county and include it in a resource guide to be available in print and on the web.

Two communities have, with the help of the DLC, created business alliances. These organizations, in the Long Branch section of Silver Spring and in Wheaton, count, as their members, associations, coalition groups, enforcement agencies and local business owners, managers, servers and the local restaurant association. A $5,000 matching grant from Miller Brewing was used to establish the newer alliance, in Wheaton. Business-owner members sign a code of conduct and gain access to state-approved responsible-server training, The Cops in Shops program (for off-premise establishments) and Operation Fakeout, an on-premise program created by the Alcohol Unit of the Montgomery County Police.

“We’re uniquely positioned — not unlike the NABCA,” Griffin pointed out. “We have direct access to licensees —we’re their supplier and we talk to them every week — and to enforcement folks. We’re getting them together.”

Setting Goals

Griffin realizes that his presidency will go by fast. “In the next twelve months, I want to help the association come to grips with how — and how deeply — to become involved in public policy. I also want to work hard and have the association continue to help members improve — such as with the ‘Best Practices’ effort,” he said.

He’s reminded of how a friend joked with him when he first took his DLC job. “He said, ‘Oh, that job should be easy; you only have two goals: increase sales and promote temperance,” said Griffin. “Finding the appropriate balance to best serve our communities is really what each control state official