Q and A: Hail to the Chief

In 1978, the North Carolina General Assembly approved liquor-by-the-drink permits for the first time in 70 years. Three years later Mike Herring was hired as a field auditor assigned to monitor bars and restaurants granted permits. Little did he know at the time, but Herring would rise from a field auditor to an audit division supervisor to assistant administrator and for the past 19 years the state’s chief administrator. Gross sales have nearly tripled in North Carolina under Herring’s leadership, and the state’s $867 million in gross sales for Fiscal Year 2014 ranks fourth in the control states. Herring will retire at the end of 2014 after 33 years with the ABC, but we caught up with him for a quick interview before he and his wife, Liz, pack up and begin spending more time in their second home in the North Carolina mountains.

 

StateWays: What did the industry look like when you were starting out, and what were the challenges North Carolina faced at the time?

 

Mike Herring: We were a conservative state, so from right after Prohibition up through the 80s there was a strong opposition to alcohol in general. There were a lot of dry pockets of the state where there was no alcohol whatsoever. In 1980, we had 139 local ABC boards, approximately 1,500 liquor-by-the-drink permits and gross sales coming out of ABC stores around $281 million. We really started to see tremendous growth around 2001 and have been going upwards ever since. Today we have 169 ABC boards, about 5,600 liquor-by-the-drink permits and gross sales over $850 million. The other thing that is interesting is that back then we had one winery, one brewery and no distilleries operating in North Carolina. Today, there are 145 wineries, 90 breweries and 15 distilleries.

 

SW: How did your early days working in the audit department inform your career as an administrator?

 

MH: It helped a lot. Not only was I working with retailers in my early days of field auditing but also the people holding liquor-by-the-drink permits. I also started working with the local ABC boards, learning how their operations worked and what their needs were. I came away not only being able to understand the policy and the laws but also how they affect business.

 

SW: What are the accomplishments in your career that you’re most proud of?

 

MH: One of them would have to be modernization of the ABC system. We were one of the first states to embrace technology. We developed one of the first websites in the control states around 2000. We were the first control state to develop an online price-quote filing system. Some control states to this day still don’t have that capacity. The other thing I’d say is that we handled the growth of the business well. We have an efficient warehouse system run on a private contract. And we have two warehouses now in the state. We’re able to control the cost of receipts, and I think we have a fair distribution system.

 

SW: What were the parts of the job you looked forward to every day?

 

MH: I just enjoyed the people. It’s the relationships I developed along the way and being able to help people that made me enjoy coming to work. You can look at our rules and laws and it’s easy to say, ‘Well, that’s not authorized, therefore it’s prohibited.’ But if you can use a little common sense, you can help people find a way to get things done that are for the betterment of the state and the businesses.

 

SW: Do you have any insights on what you think the next hot product will be?

 

MH: It’s funny, in 1981 when I started we carried 104 SKUs of vodka. We had no flavors, and only two were imported. Today we carry 400 SKUs of vodka with 150 imports. There’s every flavor imaginable plus five locally produced in North Carolina. It’ll be interesting to see what becomes the next hot item out there. In the 80s the brown goods were hot, then the vodkas took over around 2000 and really grew. Now we’re seeing brown goods come back, and brown goods in flavors. The other thing that I’ve seen is the growth in cordials and tequila. Tequila might be the next hot item, or maybe even flavored tequilas will become big.

 

SW: How would you assess the outlook for control states as you step aside after 33 years?

 

MH: I think the outlook is good business-wise. I think you’ll continue to see steady growth in the industry. There’s always the challenge of privatization, but I think as long as North Carolina continues to modernize, embrace change and operate customer friendly stores then I don’t think that will be an issue here. I’ve always believed the control model works well. It provides what the people of North Carolina want and it benefits them.

1 COMMENT

  1. Mike Herring is one the really good guys in this great industry. His professionalism and expertise was extremely helpful in our 2013 launch of Covington Gourmet Vodka in NC…”The Best Yam Vodka On Earth”. We’re going to miss him at the NC ABC.
    Best of luck to you in all your future endeavors Mike!

    Cheers,
    Jimbo

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