Narayan Baddam believes wine can be a profitable convenience offering, even in a small town in Alabama. He’s sure his customers’ tastes will mature and he’s willing to wait, keeping his prices competitive and watching for signs that beverage sophistication has evolved.A former software specialist living in Ohio, Baddam made a career switch in 2004 when his cousin (and now business partner), Karunakar Sindireddy, offered him a job at his convenience store in Decatur, Ala. Together they purchased an old car repair center in 2007 and remodeled everything. Today, the Danville Park Shell and their original unbranded Fuel Zone store are filled with traditional convenience items and a growing wine selection.
“I want to be a little different,” Baddam says. “In Decatur, particularly, there aren’t gas stations selling wine collections.”
Personal Touch
He introduced wine to the stores in 2005 with roughly 200 SKUs, but after a couple of years he wasn’t finding much success with it. So he developed a new strategy, writing down customer requests for different wines and imported beers and stocking up on them. He started making sure customers were aware when he stocked their requests and offered them discounts on cases for parties and events. His selection has grown to 250 SKUs.
“I do pretty well on imported beer in the summertime, and wine sales typically pick up in the winter, especially around the holidays,” Baddam says. He still wants to put more effort into achieving sales numbers that defy the weather. He began chilling wine in his stores, tempting his clientele in the miserable Alabama summer heat with cool wine they can take home and drink right away.
“In any convenience store, if you have a relationship with the customers and you know what they want exactly, it’s going to bring more customers,” Baddam says. But because 75% to 80% of customers at his Danville Park Shell store are “regular and repeated,” drawn in from large subdivisions, townhomes and apartments in the neighborhood, customer service is especially vital.
Competitive Nature
Baddam has his competitors in his sights, pricing his wines as low or lower than the nearby Publix grocery store, well known for its impressive wine section, and mimicking its accessible displays. The wine is by the counter, all within reach, and price tags are visible on everything.
“I always bargain with my vendors, so I can give my customers a good price,” he says. “If a vendor won’t budge on a high price, don’t be afraid to discontinue with them.”
Baddam orders primarily through three area vendors, such as Alabama Crown, United-Johnson and International Wines & Craft Beer. He focuses on wines that go for less than $10, but he has a small but consistent clientele who purchase $15 to $20 bottles as well. To stay competitive, he often offers two-for-$8 or two-for-$10 promotions and pairs wines with crackers and imported cheeses.
“It’s challenging in Decatur,” Baddam says. “It’s a very small town, but there are tons of gas stations. We have more competition than is normal and we have to be on top of it.”
The Waiting Game
These changes have incited modest growth in the wine category’s profits for the stores. Even though Baddam is looking for bigger numbers, he now sells 10 to 15 cases per week and is content to carry on, sure that his customers will eventually become more tempted by it.
“Here in Decatur, they mostly pay for beer, but wine is good for your health,” he says. “It’s a very small town, but it’s growing up. It might take a few more years for wine sales to take off.”
Baddam can feel the potential in his unbranded Fuel Zone store particularly, which draws in more white-collar workers from local businesses. When he completely resets his entire store every year, a housekeeping tradition he’s found useful for keeping everything updated, he makes adjustments to his product offering. He has expanded his energy drink selection in recent years and has grown his electronic-cigarette offering to almost 20 varieties, but wine is always there, always ready to take off when the customer winds change.
Baddam thinks back to the early days of the Danville Park store, when he and Sindireddy were sometimes not able to pay the bills. Things certainly have changed since then.
“You have to keep going in this business,” Baddam says. “Work hard. Learn to wait. Things will pick up.”.
Meet Narayan R. Baddam
Originally from: Hyderabad, India
Educational background: Master’s in computer science from Alabama A&M
Family: Wife Kavitha Baddam and 6-year-old daughter Ria
Hobbies: Reading books, watching TV, jogging and swimming
Favorite wine: Napa Valley Merlot Cabernet
Favorite thing about Decatur: Easy to get to know more people, less traffic
Favorite thing about your job: Seeing people and interacting with customers,vendors and employees
Most challenging thing about your job: Finding good employees and keeping track of inventory
Hero or mentor: Mahatma Gandhi and Steve Jobs
Biggest dream: Owning multiple stores that all do a high volume
Other interesting stuff: I love to be with people. I’m goal-oriented and very organized. I love planning and reading successful people’s stories.
Danville Park Shell’s Top-Selling Wines
- Sutter Home
- Barefoot
- Yellow Tail
- Foxhorn
- Kendall Jackson
- Black Swan
- Vendange
- E. & J. Gallo
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