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Business: As liquor store owners compete for hard-to-find bottles, some turn to robots

Strange times call for strange measures.

In the world created by the pandemic, business owners face a myriad of issues: tangled supply chains, tight labor pools, shortages of almost everything. This is as true in the liquor industry as it is anywhere else, and like anyone else, liquor store owners think outside the box.

Shortages of certain alcohols have led to the emergence of software bots – or “bots” – that order hard-to-obtain cases of drinks, finding and ordering them immediately.

While they are a solution to a problem for some stores, others see their use as unfair.

But, in the long run, will this software support matter?

Tangled chains
In Mississippi, liquor stores are required to order their inventory from Alcohol Beverage Control, which is a division of the Department of Revenue.

The heart of the operation is a warehouse in Gluckstadt that is more than 200,000 square feet and contains more than a mile and a half of conveyor belts, according to ABC assistant manager Chip Jones. Store owners use a web portal to place orders.

As soon as a truck is unloaded, those cases of liquor appear on the state’s website and are available to order, Jones said.

“If a truck arrives with Crown Royal, the crates are unloaded, processed and put into inventory,” Jones said. “Any holder can see it and place an order at that time.”

Getting that case of Crown (in a store) was a matter of days, Jones said.

“Before COVID, you would wait a day or two to get an order,” he said. “If they placed an order before about 11 a.m. that morning, it would go in the truck that night and they would get it the next day.”

The pandemic has brought this delivery time to a screeching halt, quite literally.

Mike’s Liquor Store owner James Ervin stands behind the counter at his store in Columbus last week. Liquor store owners have faced multiple hurdles since the pandemic, including delivery delays and low availability of some spirits. Brian Jones/Dispatch Team

James Ervin owns Mike’s Liquor Store on Highway 45 North. His frustration at trying to fill his shelves is palpable.

“During COVID, it took up to four weeks to fill an order,” Ervin said. “I had a (liquor rep) tell me that at one point the state was 200,000 cases back on orders. I ordered some stuff I wanted to have for Christmas and received it four months later.

That delay has decreased, according to Jason Sims, owner of The Jug in East Columbus.

Jason Sims

“We’re still looking at a delivery delay of about two weeks,” Sims said. “It’s still a drastic change from what it was before the pandemic.”

Ervin agreed that the situation had changed since the nadir of the pandemic, but was still much slower than before.

“The order I receive tomorrow was placed two weeks ago,” he said. “The supply chain isn’t as bad as it used to be, but it’s still bad.”

The delays are due to several cross-cutting issues, Jones said. The first is the early pandemic peak in demand, which fuels the resulting entanglements in the supply chain.

“Demand has just increased dramatically, some months up to 40%,” he said. “Our normal growth rate was around 5% per year, over the past two years it has been more like 20%.

While demand isn’t “stable,” Jones said it’s still high compared to pre-pandemic numbers.

Then there were the other delays, caused by shipping and shortages.

“There was a shortage of glass at one point,” Jones said. “(The distilleries) may have had the juice, but they didn’t have the bottles. There was a strike at Heaven Hill Distillery for two months. When California ports have a backlog of ships, we expect this product. It’s all kinds of things outside of Mississippi that affect what happens here.

As this backlog began to clear, ABC faced a new challenge: finding workers. Warehouse workers left, applications dried up. Jones said ABC’s warehouse was only about 70% staffed.

“We would ship around 65,000 cases a week before COVID,” he said. “It was generally higher at the start and end of the week. There was a lull in the middle where we could catch up on paperwork, cleaning, things like that. Now we ship at full capacity every night, and it’s stressful on labor and equipment.

This stress manifests itself in a high turnover rate, he said.

“We’re probably 90% staffed, but about 10% of those you can’t rely on will stay,” he said. “The turnover rate is just ridiculous, so you spend a lot of time training and interviewing and that doesn’t leave you a lot of time to deal with other issues.”

In the absence of a Hennessy
All of these tweaks and start-ups in the supply chain and ABC warehouse leave store owners struggling, especially when it comes to something that’s already hard to come by. Take Hennessy, for example. Cognac popped up in virtually every thread The Dispatch had reporting on this story as something in high demand, but difficult for ABC or store owners to grasp.

“Demand has always exceeded supply,” Jones said. “As soon as it arrives, it sells out.”

Stores that usually ordered two or three cases ordered 20 to 30 at a time, Jones said. In an attempt to reduce demand among the state’s more than 700 stores, ABC limited the number of cases a store could order during a certain period.

This didn’t sit well with some store owners who already felt they weren’t getting their fair share, so they turned to technology as a force multiplier. The idea was that a bot could monitor stock in ABC’s warehouse, and as soon as something hard to find like Hennessy became available, the bot could place an order almost instantly.

A liquor store owner who uses such a bot agreed to speak to The Dispatch on condition of anonymity.

“What it does is it searches for a specific product,” they said. “If it’s in there, it tells me it’s in stock, and how many cases. Right now (the bot) isn’t ordering for me, but I’m programming it to do that too.

They said they turned to robots after becoming frustrated with their inability to obtain certain products, including Hennessy.

“You can sit online and see a thousand cases (of Hennessy) come up,” they said. “The state will only let you order 10 cases at a time. By the time I see it’s arrived and I hop on the computer and place my order, those thousands of cases may already be gone. I couldn’t get the products I needed because I had to search and order manually.

They said they suspected rival stores were using bots and called ABC to complain.

“The (ABC) guy told me to get my own program,” they said. “So I said, ‘Okay, thank you.'”

They hired a student from East Mississippi Community College who was in a tech program to create the bot. Thirteen pages of code were enough.

“Someone who is computer-savvy could write one themselves,” they said.

Other liquor store owners who don’t use robots feel the practice is unfair. None of the anti-bot store owners contacted by The Dispatch would officially speak about this story, but all said they were at an increasing disadvantage when it came to obtaining in-demand or scarcer products. They also wondered how hundreds of cases of Hennessy — or anything else — could disappear in minutes.

“How did everyone know it was going to be there and then it was gone, all in less than a minute?” we wondered.

Jones – who works on the warehouse, not the app, end of ABC – said the bots are not illegal.

“We’ve spoken to the legal department and law enforcement, and the position is that there’s nothing illegal about it,” he said. “It’s not that different from stores that already hire a college student to sit at a computer all day and check, just like a bot would. The only thing that could cause a problem is if (the bots) consume a ton of bandwidth. It would slow down the whole system.

The light at the end of the tunnel
All of this – the bots, the backlogs, the order queues – may soon be irrelevant due to a bill passed last session that privatizes warehouse operations and allows construction of warehouses. a new warehouse.

“Inbound and outbound operations will be outsourced to a third-party company,” he said. “The big deal is that (workers) won’t be tied to the state staff council on wages, so there will be more flexibility to respond to market and wage expectations. .”

The warehouse also typically operates on a four-day work week, and private ownership could extend these hours to better meet needs.

The majority of liquor store owners who spoke to The Dispatch said they believed it would solve many of the issues that drove store owners to bots in the first place.

“We expect quite a drastic change in the future,” Sims said.

Brian Jones is the local government reporter for Columbus and Lowndes County.