Inside the Philadelphia wine market

Philadelphia, Pennsylvania, is the USA’s fifth-largest city and the nucleus of a metro area of 6m people. Rich in arts, culture, education, and a history significant to the founding of the country, the city is vibrant, as are its culinary and wine scenes — despite state control of all liquor sales through the Pennsylvania Liquor Control Board (PLCB). Layers of taxes and fees and near-retail pricing for restaurateurs, among other issues, all provide challenges to wine professionals and consumers. The PLCB has changed procedures in the past for area producers, however, so the outlook citywide is growlingly optimistic. Scott Saunders takes a look.

Jason Malumed, Sean Faeth, Tim Kweeder
Jason Malumed, Sean Faeth, Tim Kweeder

Jason Malumed  

Malumed is a partner at MFW Wine Co., a New York-based importer and distributor of about 150 producers. Overseeing MFW Wine Co.’s business in Pennsylvania, Malumed is charged with the task of selling wine to the state-run PLCB stores.  

All the stores in Pennsylvania are controlled by the state. There are no independent wine retail stores. There are about 600 total stores throughout the state, and of those 600, maybe around 100 of them are what are known as the luxury stores, which generally have an expanded wine selection. That’s the part of the PLCB that I work with. Most of the regular stores are dealing with brands like Yellow Tail and Woodbridge and stuff like that — the big name brands. We’re working with the smaller producers, the small, family wineries.

For consumers, it’s a lot more difficult to find what they want because the stores are not up to the same quality as they are in states with privately run stores. The people who work in the PLCB stores, especially the regular stores — the non-luxury stores — are usually just people who have passed the civil service exam. That’s all you need to work in a wine store; you don’t need to have any wine knowledge whatsoever. There have been a lot of complaints about customer service, people not being helpful, horror stories about misinformation, and more. But I will say that over the last five years or so things have gotten dramatically better. The PLCB has created what they call “wine specialists”. These are people that go above and beyond, they take extra classes that the PLCB puts on, and they have a really solid knowledge of wine. In each of the 100 or so luxury stores they’ll have a wine specialist, and that’s the person who is helpful and knowledgeable. The selection has improved as well. Really, over the last five years the state has gone out and, with the prodding of small distributors such as myself and some other people, has expanded their selection to include a lot of smaller, higher-quality producers and more interesting wines. 


Jerry Forest

Forest is co-founder and owner of Buckingham Valley Vineyards, currently celebrating its 50th anniversary. One of the first three wineries in Pennsylvania — there are now 200 — Forest and family will open a tasting room/restaurant/entertainment space in the Passyunk neighbourhood of Philadelphia this year.

The PLCB has been very friendly toward the local wine industry. When we started it was an adversarial relationship, and then we became friends, and now they’re actually trying as much as they can, within the law, to help Pennsylvania wineries. They’ve started a new programme by which a Pennsylvania winery can put their wine into 10 surrounding liquor stores and deliver it directly to the stores and have special pricing. We personally don’t take advantage of that because we don’t need it — nearly all sales are directly at the winery — but they are doing good things for local wineries.

If you want to go full tilt with the PLCB for the entire state, you’d have to deliver to at least three state-wide locations, use bonded carriers, and go through a number of other regulations, so we don’t do it.

Actually, out of the 200 wineries in Pennsylvania there are probably no more than half a dozen that have wide distribution in the state store system.

We’re noticing a big increase in sparkling wine sales. We first put out sparkling wine about 18 years ago, but we’ve just made a measured commitment to it and we’re now going to produce some 30,000 to 40,000 bottles a year. It’s selling beautifully. There are a lot of things that come and go, and I don’t get involved with them because they’re not long-lasting. I just heard of one the other day where they’re using old bourbon barrels to age their red wines because they like a little bit of bourbon flavour, and that’s going to be a big thing — for the next year or so. We used old bourbon barrels back in 1973 but it was because it was the only thing we could afford, and now today it’s the ‘big thing’. There’s always something coming down the pike. In reality, the wine industry has been around for 2,000 years and there are only so many things you can do. The little gimmicks pass through pretty quickly.


Sean Faeth

Faeth is the Philadelphia wine sales consultant for The Artisan’s Cellar, a wine distributor offering small-production wines that are most often organic or biodynamic. With a kegging programme, they seek to provide wine solutions to Pennsylvania restaurants.

Pennsylvania has a few unusual barriers to building a strong wine culture due to the size and necessary bureaucracy of the PLCB. There is a distinct break between the quality of the wines offered in top restaurants and what is easily and typically found on the state store shelves. Restaurants tend to be up on the recent wine trends and have easier access to smaller producers, where the state stores (in general) have less of a specialised selection.

There are a few reasons for this. Restaurants get a very paltry discount off the retail price of a wine — they are running their beverage programmes without wholesale pricing. They do not want to sell items that are easily available on the store shelves because their guests can see their pricing and it makes the markup very apparent. Nothing ruins the vibe and magic of a restaurant experience like knowing exactly what the markup is. As a result, many restaurants only work with SLO (Special Liquor Order) wines, which are not sold on the store shelves. In other markets, this obvious-to-the-guest-pricing isn’t an issue because the restaurants get wholesale discounts.

In theory, any Pennsylvanian can order an SLO wine to their store, but it’s an arduous process. So, it’s very difficult to get your favorite restaurant wine to enjoy at home. The average consumer isn’t aware of why. Many of them go to New Jersey or Delaware to try and find it.

To me, this variance between restaurant and retail wine experience is one of the most significant barriers to people learning about wine. Most markets have both educational avenues open for wine lovers, whereas in Pennsylvania, the retail educational opportunities are severely limited to a few “Premium Stores”, and the handful of clerks who really know and love wine. Many of the standard stores do not offer smaller production or boutique products. The stores do have a lot of regional and grape variety, but it can be tough if you are looking for a specific producer or importer.

The state requires a good amount of volume to be able to offer the wine to all their stores, so it’s hard to get allocated wines on the shelves. Also, all of the sales are done through the offices in Harrisburg, the distributor’s sales person might not have the ability to form a relationship with the store clerks to educate them about the new products.

Despite all of this, I see a lot of good things happening. Philadelphia has a vibrant food and wine scene and there have been some attempts to modernise by the PLCB. I think if they allowed smaller stores that were run more like specialty stores in other markets (direct access to someone running the store with buying power, rather than selling through the bureaucracy) that would be a big step in the right direction.

Tim Kweeder

Kweeder is general manager at Kensington Quarters, an artisanal restaurant and butcher shop supporting local agriculture and sustainable practices. In addition to GM and occasional wine educator, he manages the wine programme, as he did for Petruce et al., and Fish.

It’s not an easy game to play, by any means, but it’s been cool to watch wine appreciation rise in Philadelphia. The food scene is on fire too, getting a lot of national press. We have some really awesome restaurants at the moment; the past three years especially. Naturally, the wine scene benefits, but it’s still tough because we essentially pay New York retail for a wine here, which is ridiculous. It’s a lot easier to find good wines these days. Five years ago, researching importers and asking them to sell to the state, some distributors were into it, but others wouldn’t give Philly the time of day. And I don’t blame them. They don’t want their wines to seem so expensive.



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