Mecklenburg County. Alcoholic Beverage Control Board. Annual Report Fiscal Year 2014

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1 Mecklenburg County Alcoholic Beverage Control Board Annual Report Fiscal Year North Tryon Street Charlotte, North Carolina (704)

Message from the Chairman & Chief Executive Officer Dear Mecklenburg County Residents Since 1947, we have been a part of the fabric of Mecklenburg County.

2 Message from the Chairman & Chief Executive Officer Dear Mecklenburg County Residents Since 1947, we have been a part of the fabric of Mecklenburg County. However, most only see us as just a distilled spirits retailer. Our job is more than making products available for purchase; we make a difference by returning profits to the State of North Carolina and our community. This report shows you our work and its impact. For fiscal year 2014 (July 1, 2013 to June 30, 2014), sales grew 5.8% from previous year to $119 million. We returned over $34 million to the State and over $13 million back to our community. As we look ahead to 2015, we will focus on running efficiently, improving customer experiences, building relationships with licensed businesses that sell alcohol, and working with community partners to improve public health and safety. We do more than just sell a bottle; we hope you agree. Thank you for allowing us to serve. Cleveland Edwards Chairman Paul A. Stroup, III Chief Executive Officer Mission: The Mecklenburg County Alcoholic Beverage Control (ABC) Board manages the sales of distilled spirits by promoting excellence in customer service, fiscal responsibility, operational effectiveness, and compliance with laws governing the sale and use of alcoholic beverages, while creating community partnerships to improve public health and safety.

3 Financial Highlights For the year, total revenue reached $119.6 million compared to $113.1 million last year, a 5.8% increase. By controlling expenses, net income increased to $16.2 million, an 8% increase over previous year. In addition to an independent financial audit, we completed an external audit of our technology systems; including the point of sale network. FY14 FY13 FY12 FY11 Sales: Retail Liquor $77,998,604 65% $72,989, % $69,098, % $69,098,390 Mixed Beverage 41,467,550 35% 39,897, % 38,094, % 38,094,776 Wine and Mixers 232,428 0% 223, % 254, % 254,731 Gross Sales 119,698, % 113,110, % 107,447, % 98,818,540 Total Taxes 29,120, % 27,583, % 26,232, % 24,174,098 Net Sales 90,577, % 85,526, % 81,215, % 74,644,442 Cost of Sales 60,102, % 56,769, % 54,074, % 49,813,244 Gross Profit on Sales 30,475, % 28,756, % 27,141, % 24,831,198 Operating Expenses: Store 10,604, % 10,191, % 10,027, % 10,204,684 Warehouse and Delivery 495, % 490, % 517, % 541,376 General and Administratve 1,578, % 1,647, % 1,591, % 1,670,834 Depreciation Expense 1,216, % 1,247, % 1,269, % 1,116,249 Other Post Empl Benefits 356, % 302, % 302, % 302,334 Total Operating Expenses 14,250, % 13,879, % 13,707, % 13,835,477 Income from Operations 16,224,506 14,876, % 13,433, % 10,995,721 Distributions: Law Enforcement 1,885,541 1,782,374 1,599,353 1,712,121 Alcohol Education 208, , , ,562 Community Grants 3,997,899 3,821,913 3,565,683 3,428,779 Total Distributions 6,091,824 5,728,288 5,288,241 5,262,462 Distributions to Local Government: City $3,503,235 $3,046,291 $2,901,230 $2,763,076 County 3,503,235 3,046,291 2,901,230 2,763,076 Library 368, , , ,850 Total Distributions $7,375,231 $6,413,244 $6,107,853 $5,817,002

4 Where the Money Goes

Operations The Operations team manages the daily business of

procedures, product knowledge, and customer service.

2 Retail Only 1 Warehouse/Office With our warehouse exceeding

location inventory levels stable between deliveries from the

The space also allows us to manage our expenses as product

5 Operations The Operations team manages the daily business of selling distilled spirits; including locations, warehouse and distribution, and marketing. Associate trainings were delivered in customer identification procedures, product knowledge, and customer service. 21 Retail/ Commercial Sales 1 Commercial Sales Only LOCATIONS: 2 Retail Only 1 Warehouse/Office With our warehouse exceeding 60,000 square feet, we are able store products to keep our location inventory levels stable between deliveries from the central warehouse in Raleigh, North Carolina. The space also allows us to manage our expenses as product prices change. Our warehouse associates unloaded deliveries from Raleigh 251 days and made at least weekly deliveries to each location.

Commercial Sales In addition to selling retail to the public, we also provided 954 businesses licensed to sell distilled spirits by the drink in Mecklenburg County with product.

Marketing Our approach to marketing centers on providing relevant information to make informed choices. We asked for customer feedback via surveys both on-line and in-person.

6 Commercial Sales In addition to selling retail to the public, we also provided 954 businesses licensed to sell distilled spirits by the drink in Mecklenburg County with product. At 35% of our gross sales, entertainment, hospitality, and tourism are a growing market in our area. Bottles are marked with a tax stamp to show taxes were paid properly. Marketing Our approach to marketing centers on providing relevant information to make informed choices. We asked for customer feedback via surveys both on-line and in-person. We made several changes to improve communication with the public through our website and directly with customers. Web traffic: Over 219,000 active uses with an average of over 1 minute 30 seconds spent on the site Over 30% of traffic comes from hand-held devices 25,000 product searches 25 list blasts Our website ( was branded to blend the ABC Spirits location sign with the official seal of the Board. The branding led to greater visibility and understanding of the system s role. Our website was also upgraded to add device-recognizing software to display key features, product search- by- location and a Google map interface to find locations easily. Balancing marketing efforts and customer service, we added an list service to give customers timely information on new products and special releases in categories they select. Our list system reached 983 subscribers with product category information such as new releases, special releases, and periodic sales information. The largest category of subscribers was American Whiskey; at 830.

TOP SELLING PRODUCTS FISCAL YEAR 2014 Description Size Sales GREY GOOSE.75L $3,237,795 CROWN ROYAL.75L $2,740,535 JACK DANIEL S BLACK LABEL.75L $2,591,830 PATRON SILVER.

75L $1,311,823 HENNESSY VS.75L $1,197,823 Tim Smith Bottle Signing December 27, 2013 On December 27, 2013 a bottle signing was held at our University City Blvd.

7 TOP SELLING PRODUCTS FISCAL YEAR 2014 Description Size Sales GREY GOOSE.75L $3,237,795 CROWN ROYAL.75L $2,740,535 JACK DANIEL S BLACK LABEL.75L $2,591,830 PATRON SILVER.75L $2,452,600 FIREBALL CINNAMON WHISKY.75L $2,303,936 ABSOLUT 80.75L $1,762,043 KETEL ONE.75L $1,388,651 JAGERMEISTER.75L $1,357,011 MAKER MARK.75L $1,311,823 HENNESSY VS.75L $1,197,823 Tim Smith Bottle Signing December 27, 2013 On December 27, 2013 a bottle signing was held at our University City Blvd. location. Tim Smith, from the hit show Moonshiners signed bottles of his Tim Smith s Climax Moonshine for fans. Customers lined up early. They were greeted not only by Tim Smith but his family as well.

Law Enforcement With each sale comes responsibility to educate the public and establishments that sell alcohol on alcohol laws, underage alcohol use prevention, and community resources that provide

8 Law Enforcement With each sale comes responsibility to educate the public and establishments that sell alcohol on alcohol laws, underage alcohol use prevention, and community resources that provide substance abuse help. We work to leverage internal resources effectively to improve public health and safety. Our associates, 13 ABC law enforcement officers, and 7 reserve officers last year provided: 221 educational events. Students, parents, and community participated in events focused on substance abuse prevention, responsible use, and proper alcohol service. 1,339 inspections of establishments that hold permits to sell alcohol bythe-drink (permitted establishments). The majority of inspections resulted in opportunities for education; however, 171 reports of law violations were made to the North Carolina ABC Commission for adjudication. 59 classes on responsible alcohol sales reached 1,313 servers at permitted establishments. 209 permitted establishment checks with a minor under the age of 21. Results 86% did not sell alcohol to the minor 21 Driving While Impaired (DWI) checkpoints.

Ed Watson and a student driver wearing goggles that model impairment at Butler High School STAY The STAY (Substance Training Awareness for Youth) partnership with Charlotte-Mecklenburg Schools

Over 11,000 students heard from officers and prevention professionals the dangers involved with possession of alcohol underage, Driving While Impaired criminal charges, and how to make good choices.

) Date: Time: Total Fare: $ # of Passengers: Pick Up Location: Drop off Location: Cab Company: Cab # /Driver Name: ABC Officer: Mecklenburg County ABC Board Establishing Effective Alcohol Education

9 Ed Watson and a student driver wearing goggles that model impairment at Butler High School STAY The STAY (Substance Training Awareness for Youth) partnership with Charlotte-Mecklenburg Schools expanded this year to all 9th grades and added another classroom health lecture by Anuvia Prevention and Recovery Center. Over 11,000 students heard from officers and prevention professionals the dangers involved with possession of alcohol underage, Driving While Impaired criminal charges, and how to make good choices. OPERATION SAFE RIDE PROFESSIONAL TRANSPORTATION VOUCHER Valid Dates: November 7, 2014 November 8, 2014 (Not redeemable for cash. No change given.) Date: Time: Total Fare: $ # of Passengers: Pick Up Location: Drop off Location: Cab Company: Cab # /Driver Name: ABC Officer: Mecklenburg County ABC Board Establishing Effective Alcohol Education Partnerships... Operation Safe Streets Operation Safe Streets, a partnership formed this year with 3 professional cab companies, allowed ABC officers to stop 178 individuals who had consumed alcohol from getting behind the wheel of a car. Officers found safe alternates such as having someone pick them up, using a non-drinker in their party to drive, or using a cab. This proactive approach to community policing reduced tax-payer expense for the criminal justice system for DWI charges, prevented automobile crashes caused by alcohol, and challenged adults to think about their transportation needs before consuming.

10 Community Relations In 1996, we began an annual grant program for local non-profit organizations to address substance abuse issues. This year, we awarded grants ranging from substance abuse prevention in the Charlotte-Mecklenburg Schools to fetal alcohol spectrum disorders prevention and education, to modified 12 Step recovery services for patients recovering from traumatic brain injury. Since 1947, we have returned over $70.4 million to non-profit organizations. This year, we supported 18 non-profit organizations who delivered substance abuse prevention, education, and treatment services Alcohol Education Grant Program $787,552 $35,000 $34,454 $13,942 $12,450 $42,306 $49,400 50,000 Changed Choices, Inc. Charlotte Rescue Mission Children's Theatre of Charlotte Florence Crittenton Services, Inc. InnerVision, Inc. McLeod Addictive Disease Center Men's Shelter of Charlotte Project STAR at Carolinas Rehabilitation Safe Alliance Salvation Army--A Georgia Corporation Urban Ministry Center--SABER Program Urban Ministry Center--Moore Place Charlotte Family Housing Freedom House of Mecklenburg Community Culinary School Crossroads Reentry Ministry The Arc of Mecklenburg County Twelfth Step Service Club

Anuvia Anuvia Prevention and Recovery Center promotes wellness by providing superior quality treatment and prevention services for adults and adolescents to impact the disease of addiction.

11 Anuvia Anuvia Prevention and Recovery Center promotes wellness by providing superior quality treatment and prevention services for adults and adolescents to impact the disease of addiction. As the largest and longest alcohol education partner of the Mecklenburg County ABC Board, this year they received over $3.4 million in funding, as well as use of their facility rent-free. Each week, over 1,000 people attend meetings and/or groups there. Anuvia Prevention and Recovery Center 100 Billingsley Road, Charlotte, NC

12 Looking Ahead Though we had a successful year, there s still more to do. A three year strategic plan began this year with key improvements in operations and customer service, technology that improved efficiency, investments in human capital to ensure the system functioned well, and fiscal responsibility providing greater returns to the community. Our plan will challenge us next year and we are eager to meet the changing needs of our customers. We work for the citizens of Mecklenburg County and will continue to look for ways to serve you and businesses in Mecklenburg County better. We hope you see the difference.

DEAR CITIZENS OF MECKLENBURG COUNTY

MESSAGE FROM THE CHAIRMAN & CHIEF EXECUTIVE OFFICER DEAR CITIZENS OF MECKLENBURG COUNTY 2016 In fiscal 2016 (July 1, 2015-June 30, 2016), the Mecklenburg County Alcoholic Beverage Control (ABC) Board experienced