SHIP SHAPE

Mark Bodi, chairperson of the New Hampshire Liquor Commission (NHLC), likes to put it this way: he believes that the mission of everyone at the commission should be to serve our customers and make sure to “keep the barnacles of bureaucracy scraped off the ship of state to ensure we can succeed.”

“We like to think of ourselves as very aggressive, from a marketing point-of-view, responsive and innovative,” he explained. “We have conducted an end-to-end review of our operations and we are streamlining governmental bureaucracy. We’ve dramatically decreased the red tape and increased response times in our licensing process. We’re also working on eliminating barriers to listing products more quickly. Our focus is for the commission to become more responsive to our customers at all levels.”

The New Hampshire Liquor Commission is charged with regulating the sale of alcohol within the state. It functions as the state’s sole retailer of distilled spirits. Its 77 state stores, which also sell wine, racked up over $436 million in net sales in 2007. The NHLC is also the state’s sole wholesaler of both spirits and wines. It runs its own 50,000-square-foot warehouse, which generally holds about 200,000 cases of product. Located at its headquarters in Concord, this warehouse, recently upgraded with new racking systems, handles all the distilled spirits coming into the state. 

The commission also contracts with a second warehouse, which mostly handles wine orders going to licensees. The commission, which employs 26 sworn police officers, is also in charge of licensing and enforcement of the state’s liquor laws.
The New Hampshire Liquor Commission is thriving. Its sales, half of which come from out of state, are up 6% over last year.  Some of its largest stores, its “highway stores,” have sales of over $25 million a year each. Meanwhile, in 2007, its Bureau of Enforcement & Licensing won the Liquor Law Enforcement Agency of the Year Award from the National Liquor Law Enforcement Association.

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 “Because of my sales and marketing background, a great emphasis of mine has been on marketing, promotion and quality service,” said Bodi. “I want to broaden our product selection and enter new markets, both new geographical markets, by opening new stores to better serve the state’s population, but also alternative channels.” The commission, for example, is looking into the possibility of providing spirit sales within select grocery stores, on a joint venture basis.

Store Improvements

The state stores themselves are being constantly improved. A commission project, called “Store Design of the Future,” aims to revamp the look of the stores within the next twelve months. “We want to implement all the elements of a modern retail environment, from low-voltage lighting to improved shelving and flooring,” said Bodi. “We want to propel our control state marketing into the 21st century.”

One pilot program, to commence within the next quarter, will unveil a superpremium section, designed in partnership with a major supplier, within at least one state store.

Bodi has already initiated “Operation Clean Sweep.” Using an increased budget, this program has ramped up the stores’ regular maintenance and cleaning routines, such as more frequent window and floor cleaning. “Operation Clean Sweep” targets “both the front and the back of our operations,” said Bodi. “Our aim is to project ourselves to all audiences in the most professional way possible.”

“We have placed a lot of emphasis on upscaling,” said John Bunnell, NHLC’s administrator of marketing & sales. “We have upscaled our fixtures and merchandising programs, and are using a lot of exciting graphics in our POS materials. Our goal is for the stores to look like upscale duty-free shops.”

Though it is not the sole retailer of wines in the state, the NHLC’s stores have gotten into the wine business in a big way. As the state’s wine wholesaler, the NHLC offers 12,000 different wines. In its own stores, it routinely offers over 6,500 stock keeping units (SKUs) of these during the course of a year, with its largest stores having up to 2,000 different wines on their shelves at any one time. This is in comparison to the 1,500 distilled spirit brands the stores routinely carry.

Own Line of Wine

And last January, the NHLC got into the wine business even more, by developing its own line of private-label wines, called Inscription. “We assembled a panel of experts, which included restaurant owners, wine personnel from our specialty stores, Gordon Heins and myself, and commission members,” explained Nicole Brassard, the NHLC’s wine specialist.  The panel blind-tasted 58 wines from the United States and South America and chose the best of three varietals – a chardonnay, a cabernet and a merlot – to be the first three Inscription wines. “They are an outstanding value,” said Brassard of the wines, which are priced at $11.99 for the chardonnay and merlot and $12.99 for the cabernet. “They are front and center in every store and some of our restaurant panelists are so excited about them, they feature them by-the-glass in their restaurants,” said Brassard.

Since early February, the NHLC has sold slightly more than 5,000 cases of Inscription wines, both in its stores and to on-premise licensees, which represents approximately $550,000 in sales. “This is comparable to some of our top-selling wines,” said Brassard. “We are talking about adding other varietals to the line in the next year.”
The NHLC continues to expand its wine education program. “The NHLC started this very early on, well over a decade ago, and has intensified its efforts every year since then,” said Bodi. Currently, the NHLC holds a series of seminars, wine tastings and food & wine events throughout the year, which culminate in the Wine Week Celebration, a festival with events held throughout the state, in January. During that week, vintners from California and Europe visit the commission’s stores and local restaurants, holding wine tastings. The state stores also promote special wine sales.

The NHLC tries to be as open as possible when it comes to listing products, both wines and distilled spirits. All products must be represented by a local broker. “That insures that we have a commitment in addition to ours to market each product in the state, which gives it a greater chance to succeed,” said Brassard.

Product Performance Analysis

And suppliers come to the NHLC’s headquarters to present information about the products they wish to list. “We’re mainly interested in any sales history the brand has and its marketing plan,” said Bunnell. “It must generate a certain gross profit level, depending on its category. For example, a 1.75 liter size vodka brand must generate at least $52,000 annually in profits.”

The NHLC then puts the new product through a six-month test period. “We test roughly 200 to 300 new items a year,” said Rick Gerrish, spirits marketing specialist for the commission. “About 80% of them stay and about 20% of them are discontinued.”

At the end of every calendar year, the NHLC analyzes all its listed products and their performances. Of those that fall below their minimum sales requirements, the ones that are within 85% of that goal receive a three-month warning. The ones performing more poorly than that are discontinued.

In Control

The NHLC’s Bureau of Enforcement & Licensing employs 26 sworn law enforcement officers as its investigators, as well as two training specialists and a support staff of 13 full-timers and 10 part-timers. The bureau has been headed by Eddie Edwards, chief, since June of 2005. Edwards has worked at the bureau for the last 14 years, has 19 years of law enforcement experience and is a graduate of the FBI Academy.

For a brief time, before Edwards was chief, the NHLC’s enforcement and licensing task were viewed separately.  Both functions were always in the bureau, but the need for greater enforcement resource allocation drove the creation of the non-sworn staff to handle licensing paperwork.

Since Edwards became chief, however, the function has been moved back to the bureau. “Enforcement is really about regulating,” explained Edwards. “Licensing is really the entry point. If you’re licensing well, you’re going to have fewer enforcement problems. Any study of alcohol control will bring you back to licensing as the enforcement prevent tool.”
Edwards feels very strongly that enforcement is a key component in maintaining proper control of alcohol.  He doesn’t think it should be the primary focus in a regulatory agency. “There are some problems you don’t want to – and can’t – arrest your way out of,” he said. For example, it is far preferable to focus on preventing underage drinking than to wait to arrest minors who do.

Edwards’s focus, therefore, has been on public policy, licensee relations and education as well as on education efforts for the general public. “If we’re writing up a significant number of [licensee] violations, that’s not a good sign,” he explained. “In 2007, we had 662 violations, and nearly 9,000 calls for services.  In 2008, we handled 463 violations, and over 13,000 calls for services of our 3,800 licensees. Call services include complaints, premise checks and follow-up requests. We have increased our presence and that has decreased the number of violations. What is being watched – and what people know is being watched – will get done.”

The bureau has set up a help desk for licensees, manned by experienced licensing specialists. “Many licensees don’t intentionally violate the law,” said Edwards. “If they have a question, the goal of the help desk is to give them an immediate response – and a written response, for their records (within 3 days); that is our task performance objective.”
The NHLC has been improving its licensing process. “With the availability of technology, there are ways to make it a more cost-effective process for both the investigators and the licensees,” said Edwards. He hopes to have much of the process online by the end of the month.

The bureau has instituted some timing benchmarks for the process. “The investigator has a certain amount of time to process the information they’ve been given, 24 to 48 hours,” Edwards explained. “If the investigator does not, then it gets passed along to the supervisor. This way, the system does not get clogged.”

The bureau is also beginning to require licensees to provide email addresses. “Having this database makes it much easier to communicate efficiently,” Edwards said. “We can send out an email about a change in policy, for example, or about a trend we’re seeing in fake IDs or the schedule of our server classes.”

Those server classes may also soon be available online. “It can be a way for licensees to refresh their employees’ knowledge every 90 days,” said Edwards, who also hopes to have a licensee message board on the commission’s website soon.
After 18 months of research and planning with a law enforcement committee comprised of State Police, Chiefs of Police Association, Sheriff’s Association and the Governor Highway Safety Agency, the New Hampshire Liquor Commission has recently become the first control state to have its own DWI Mobile Center. This is a Winnebago outfitted with breathalyzer equipment, a Drug Recognition Expert (DRE) room, where specially trained police officers can determine what substances a suspect might have ingested, and a jail cell. The center will be used at sobriety checkpoints, but in keeping with the bureau’s emphasis on education, awareness and community relationships, it will also be used as an educational center for programs at New Hampshire schools. “And it’s a moving billboard. That thing is 41 feet long and it travels the state,” said Edwards. “My focus is partnering. This unit is an example of working together beyond the traditional solutions and narrow view of responsibility.”

Advertising & Marketing

The New Hampshire Liquor Commission has an annual advertising budget of $1.5 million dollars for out-of-store campaigns. Because more than 50% of its business comes from outside the state, “a fair amount of our advertising occurs out of state,” said Bunnell. The NHLC has done a lot of research into what makes its out-of-state customers tick, in the form of telephone surveys and personal interviews in the stores. “We’ve found they need to perceive a 15% savings to get them to come off the highway and visit one of our stores,” said Bunnell. The NHLC has four large stores located right on interstate highways, two of which do more than $25 million a year in sales.

The NHLC produces its own in-store advertising and marketing campaigns. For two years, the NHLC has been running gift card promotions. Customers who spend $200 receive a free $25 gift card with their purchase. “That’s been really successful,” said Bunnell. “It gets people back into the retail stores.” During the last promotion, the NHLC gave away more than 16,000 gift cards. “When we analyze their two sales together, we find we’re giving these customers a 5% to 6% total discount,” Bunnell said.

Bodi is proud of the commission and its people. “New Hampshire has always been considered a leader among the control states,” he said. “We aim to maintain and burnish that reputation for innovation, and it’s our great employees that really make the difference.”

Alcohol Education for Everyone

Current NHLC educational programs for the general public include:

• Buyer Beware, a program that focuses on educating adults on why it is so damaging to provide alcohol to a minor.
“Studies show that 60 to 65% of the time, underage drinkers are getting their alcohol from an adult provider,” said Eddie Edwards, chief of the NHLC’s Bureau of Enforcement & Licensing.

“It is a common belief that providing alcohol is not a big deal,” Edwards continued. “People usually think, ‘It wasn’t a problem for me,’ but studies – data and science – show that a young person who has their first alcohol before the age of 15 is four times more likely to end up with an alcohol problem as an adult and is also more likely to commit suicide. We’re trying to change mindsets and shift attitudes.”

• Ripple Effect, a program whose spokesperson, Ryan Murphy, killed a man while driving drunk.
Murphy gives talks at New Hampshire high schools. In 2001, he was driving drunk – his BAC level was later found to be nearly three times the legal limit – when he caused an accident that killed one man and injured another. He is currently serving a prison sentence of 71/2 to 15 years for negligent homicide and assault and arrives at the high schools in handcuffs and a prison uniform.

• Fatal Choices, a program in which participants try to drive the DWI simulator, a golf cart, while wearing what Edwards calls “the beer goggles,” goggles that simulate the difference in visual perception that occurs at a BAC level of .08.
“And we tell them, ‘You haven’t been drinking. This is only affecting your vision. If you had been drinking, your motor skills and your judgment would also be impaired,'” said Edwards. “This program has gained a lot of support. It gives people practical experience.”

Meet the Commission

Mark Bodi, Chairperson
Mark Bodi was appointed chairperson of the New Hampshire Liquor Commission by Governor John Lynch in May 2007. Prior to that, Bodi had been president and partner of Griffin, Bodi & Krause, an advertising and marketing agency that had the commission as one of its clients. “I’ve been involved in wine and spirits marketing for over 15 years, but I have much to learn in this challenging position,” said Bodi.

Patricia Russell, Commissioner
With nine years of experience, Patricia Russell is currently the longest serving commissioner, having been appointed to the post once by Governor Jeanne Shaheen and once by Governor John Lynch. Prior to that, Russell was the mayor of Keene serving two terms. “I loved being the mayor of my hometown,” she said. “I was running for my third term when the governor called.” She had served on the city council for six years before that. Commissioner Russell and her husband owned two clothing stores, which gives the liquor commission the retail experience needed in that position.

Richard Simard, Commissioner
Brand-new Commissioner Richard Simard started in mid-August. He has owned and operated several businesses in New Hampshire since he started his first, Granite State Office Systems, an office equipment dealership, in 1969. At one time, he owned 24 apartment buildings in the state. He sold his last business, Alpha Business Systems, a company that helps people sell their businesses, in 2006. “I have a lot of experience managing businesses, people and finances,” he said. “When I heard about this position, I felt that the opportunity would be an excellent fit for my background and experience and allow me to make the best use of my capabilities. This is a great time to be a part of the NH State Liquor Commission and be a part of the team to streamline the distribution network, to develop state-of-the-art liquor stores and to produce record profits for the State of New Hampshire.”

The Granite State Goes Green

Beginning in 2002, the New Hampshire Liquor Commission started efforts to make its operations more environmentally friendly. “We’re the first control state in the country to make the full commitment to go green across all aspects of our operation,” said Mark Bodi, chairperson.

Back in 2002, the commission upgraded its lighting and heating/cooling systems to reduce energy consumption.
The commission continues to launch programs to reduce its use of materials and energy. It adopted a “no-idle” policy for its delivery trucks and for the common carriers, who deliver product to its warehouse. It has been working with suppliers to reduce excessive packaging. It has launched several programs to reduce the use of shopping bags. One was called “Save a Bag, Save a Buck.” Customers who brought their own recyclable shopping bag to a state store got a dollar off their purchase. The stores sell their own reusable bags, which are sometimes given away for free at NHLC events.

The commission has eliminated the use of paper receipts for its licensees. “It used to be a three-part form,” said John Bunnell, NHLC administrator of sales and marketing. “Now, they can get their receipt online if they need it.”

The commission is looking into a similar system for the general public in its stores. “Paperless receipts” are not printed out, unless requested, at the point-of-sale, but customers can access receipts online later if they find they need to.
The NHLC is using more environmentally friendly materials and processes to build and renovate stores.

The commission is even looking to stock more organic wines and spirits.

And in doing good, the NHLC finds itself doing well. “While, in some areas, we needed to make investments [in order to be more environmentally friendly,] we’ve already seen very significant savings, several million dollars’ worth of savings, in the first phase,” said Bodi. “And we think we are going to see much more significant savings going forward.”

The NHLC, Version 20.09

The New Hampshire Liquor Commission is constantly upgrading and honing its information technology.

The commission’s Department of Information Technologies (or DoIT, for short) is comprised of a staff of 13: a development staff of four and a help-desk and technological support team of eight, led by Deb Milewski, information technology manager, who started with the commission in July, after 12 years in retail IT with BI-LO, a chain of over 220 supermarkets in the Carolinas, Georgia and Tennessee.

In May 2008, prior to Milewski’s arrival, the commission’s DoIT team completed a major upgrade of the hardware and software used in its 77 stores.  Within the stores, a total of 240 point-of sale (POS) stations and 77 back office servers and work stations were replaced. The new POS hardware includes touch screen monitors and touch screen PIN pads with signature capture. At the same time, the stores’ POS software was upgraded from ACR 2000 to ACR 5000. In October, DoIT upgraded its abilities to monitor the stores’ systems remotely from headquarters.

In September 2008, DoIT upgraded all desktop personal computers and server hardware and software at the NHLC’s headquarters. The upgraded server hardware and software provides performance improvements and greater reliability for the commission’s core systems, utilized by store and headquarters personnel. One such example is the increased speed with which the warehouse in Concord is able to produce and print product-selection labels for warehouse orders. “That has led to a drastic increase in performance,” said Milewski.

The department is currently planning an upgrade of the commission’s disaster recovery systems. It is also in the investigation stage of enhancing the commission’s network infrastructure, which has been in place since 1999. “Technology has changed and we want to improve our ability to get more information into everybody’s hands as quickly as possible,” said Milewski. The enhanced network will provide the framework for the commission to take advantage in the future of technology that will provide more real time and remote communications between headquarters and the stores (such as video conferencing, remote training and video and graphics at the POS stations). 

“Of course, we are always actively working on our plans for the next generation of systems, for both headquarters and the stores, down the road,” Milewski said. “We are always looking for technology that allows us to better serve our customers.”

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