The outdated liquor store market is about to be disrupted
Our Vision
- We love the neighborhood “bodega” format, and we think it can be great and scalable with the right philosophy and business model. We developed Hi-Lo as a very simple concept: a “liquor market” that we would really want to have in our own neighborhood. Filled with people who know their stuff and have a real working knowledge and interest in the amazing new landscape of craft beer, boutique wines and evolving styles, and craft and small-batch spirits and cocktail culture. We’re well on our way, and have made something we love, and our neighbors really enjoy. There’s a reason Sunset named Hi-Lo “Best of the West”. Cheers to that.
Our vision is to roll out Hi-Lo to neighborhood retail sites in major metro markets nationwide, and offer a best-in-class location pattern and delivery reach that can deliver revenues of $1B+.
Our brand was built to do more than retail. Our sophisticated but fun and approachable brand was built around our core values of being super friendly, offering something new and adventurous and of-the-moment, and hospitality and excited product knowledge that focuses on the experience, not on selling. We’re working to expand our retail footprint first, then expand operations online, and extend the brand to deliver the Hi-Lo brand across several adjacent opportunities.
Total Addressable Market & Retail-Only Capture Potential
We are disrupting the $50B+ liquor store “industry”, which includes only proper liquor stores, but does not include craft beer retail industry sales of $100B+. This market has an extremely low concentration ratio (~3%) meaning it’s dominated by owner-operated entities and small retail chains that act as commodity brokers and deliver nearly the same experience except for a rare few. The market is tilting towards new trends which grocers and other legacy purveyors can’t keep pace with or offer with a quality operation, since it requires buying focus and expertise and modern operations in the store to manage a dynamic, shallow, high-turnover inventory of the latest and greatest beer, wine and spirits. Our technology focus is extending to the web to create an omnichannel ecosystem that embraces the physical stores to connect to our coming online offerings that are as experiential and fun as what we offer in-store.
Why a Scalable “Liquor Store” Now
Timing is everything. We are taking advantage of strong current factors that present an unprecedented path towards high market penetration and sustained rapid, profitable growth of the Hi-Lo brand:
Our ~2500 SF footprint was designed to leverage owner-operator turnover (~95% of industry)
Mixed-use developments, booming in all metro areas, seek refined tenant amenity concepts, and offer reduced capital requirements with strong tenant buildout allowances
The retail lease market has been greatly impacted, leaving a unique opportunity for favorable economics. And scalability is our focus.
Numbers of craft brewers and distillers have increased several-fold since 2010, but retail hasn’t yet adapted
Several paths to investor exit strategy exist due to new acquisition potentials and growing interest
Our Model Solves the Legacy Barriers to Scaling (Entitlements, ABC Permitting):
Our retail unit operations are neighborhood-friendly, meaning we gladly elect to not carry “airplane” size bottles, do not have check cashing, do not offer lottery, sell no tobacco products, and close earlier to eliminate issues. And we’ve had zero complaints at any of our entitlement or ABC hearings, because we genuinely care about our neighbors.
Value to Our Customer Base
We deliver an authentic experience and deliver with our highly curated selection. Our retail unit operations are neighborhood-friendly, so we do not carry “airplane” size bottles, do not have check cashing, do not offer lottery, sell no tobacco products, and close earlier to eliminate issues (we’ve had zero complaints).
Future Ancillary Operations
The Hi-Lo brand was developed to be extensible, and represent the lifestyle of our customers, not a bottle shop. Ancillary operations including online DTC sales, Hi-Lo branded CPG, B2B, hotel licensing, anfd vending present significant realizable upside beyond our $1B retail revenue objective.
Competitive Landscape
The Liquor Store industry is exceptionally low concentration ratio, meaning the top 4 players in the market own less than about 5% of the total market. Market barriers generally require sophisticated operators, and sufficient capital. Technology adoption is incredibly low.
What Differentiates Hi-Lo
Convenience
Distribution of stores across metro areas provides exceptional in-store and 1-hr delivery reach
Brand Association
Millennials and others want to be associated with, and experience an authentic, quality brand
Technology
Modern POS, electronic shelf labels, social media/marketing, and online experience discriminators
Near Term Plans
Our revenues are growing and strong, and anticipated to reach a new level in 2022 after stabilized operations opening in Costa Mesa and Studio City. Our units are profitable with strong unit drivers at all current and future locations. A strategic location plan is being developed with our real estate partners, and we are planning for units 005, 006, 007 now with location options identified and leases in work. Plus our online operation is expanding. Proforma and full investment deck is available on request. We’re excited to share our passion for bringing all that is Hi-Lo to many more neighborhoods.
Contact us
If you’d like to hear more about what we’re up to, and would like to chat about growth and investment opportunities, please reach out. We’re here to grow.
The outdated liquor store market is about to be disrupted
Business summary
Completely re-envisioned business model for an agile (<2500 SF) and scalable “liquor market”. We have 2 existing units, 2 in development (funded), and are growth focused, with 2020 revenues of $3.15M. We offer a highly curated retail selection of beer, wine, spirits, and healthy market goods, and on-premise beer and wine.
• We will replace a fraction of the ~45,000 mom-and-pop liquor stores across the US in the $50B+ retail liquor store market to reach $1B+ revenue, and stand up significant ancillary online operations (Hi-Lo > Harry & David)
Total Addressable Market & Retail-Only Capture Potential
Why a Scalable “Liquor Store” Now
Our ~2500 SF footprint was designed to leverage baby boomer owner-operator turnover (~95% of industry)
Mixed-use developments, booming in all metro areas, seek refined tenant amenity concepts, offer capital
COVID has greatly impacted the retail lease market, leaving a unique opportunity for favorable economics
Numbers of craft brewers and distillers have increased several-fold since 2010, but retail hasn’t yet adapted
Several paths to investor exit strategy exist due to new acquisition potentials and growing interest
We Have Circumvented Barriers to Scaling (Entitlements, ABC Permitting, Neighborhood Councils):
Value to Our Customer Base
Future Ancillary Operations
Competitive Landscape
Competitive Advantages
Convenience
Distribution of stores across metro areas provides exceptional in-store and 1-hr delivery reach
Brand Association
Millennials and others want to be associated with, and experience an authentic, quality brand
Technology
Modern POS, electronic shelf labels, social media/marketing, and online experience discriminators
Revenue Projection & Profit Model
Contact us
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