Mike Fisk

Operating two well-established retail brands across the Bluegrass State, the employee-owned company has built a business that serves both local customers and the growing number of whiskey enthusiasts making pilgrimages along the Kentucky Bourbon Trail. Altogether, the business has 26 stores.

While each banner has its own identity and customer base, both are united by a focus on knowledgeable service, diverse selections and a commitment to adapting to changing consumer preferences.

The two stores operate as separate brands under the same family-owned business.

That flexibility has become increasingly important as beverage alcohol retailers navigate a challenging environment marked by softer spirits sales, moderation trends and economic uncertainty. Even amid those headwinds, Cox ' s Spirit Shoppe & Evergreen Liquors has continued to expand its business by capitalizing on Kentucky ' s position as one of the world ' s premier whiskey destinations, while also embracing new categories and shopping behaviors that resonate with today ' s consumers. Diversification has been key.

As an employee-owned company, the retailer also benefits from a culture that encourages long-term thinking and personal investment in the business ' success. That ownership mindset has helped shape everything from customer service to merchandising strategies, creating an organization that remains focused on sustainable growth while staying closely connected to the communities it serves.

COX’ S BEGINNINGS IN TOBACCO The company began 31 years ago when it was founded by Billy Grantz, the father-in-law of current CEO, Mike Fisk.

“ He grew up in the pharmacy; his father owned a chain of pharmacy stores in Louisville, and he worked for his father from day one all the way up,” Fisk explains.“ He saw opportunity in the early‘ 90s, as the world of tobacco shops, cigarette shops really were exploding. He saw an opportunity to start a store in Louisville.”

And that ' s where Grantz opened Cox ' s Smoker ' s outlet in 1995. Success soon followed, as did impressive growth.

“ He got some profit, took the profit from the first store, and opened the second store,” Fisk says.“ And he kept doing that path until he was up to 15, 16 stores. He never borrowed money, never took loans out.”

Grantz’ s third tobacco shop launched in Saint Matthew ' s, a neighborhood in Louisville. This location became the bridge into beverage alcohol retail.

“ His smoke shop was right next door to a liquor store, and he ended up buying out that liquor store,” Fisk says.“ Took down the wall in the middle. And that was the first combo store. From that moment on, every store that he opened was a combination tobacco and alcohol store.” Today, the family business retains a single dedicated tobacco store.“ We ' re actually hoping to move that by the end of this year into a bigger space and make that into a full-size liquor store,” Fisk says.

Tobacco remains a profit center within many of the company’ s liquor stores. They feature large dedicated spaces for this category, including walk-in humidors for high-end cigars.

INTEGRATING EVERGREEN Around 2016, as Cox’ s operated 15 locations, growth remained much on the mind of family ownership. An opportunity soon emerged.

Evergreen Liquors was a Louisville liquor store with a history that dates to before Prohibition.

“ The owner at that time had owned it for about 50 years,” Fisk says.“ He had expanded it and it was a very well known store for wine, liquor and that type of world. He was looking to get out of the business and then retire. He contacted, Billy, my father-in-law, and they got they got to talking.” Discussions led to a deal. Cox’ s acquired Evergreen in 2017. Naturally, the new ownership faced a decision about branding. Cox’ s was the family business, but Evergreen had its own positive reputation that traced back many decades, to say nothing of its current-day status.

“ There was a neighborhood right behind Evergreen Liquors called Anchorage, which was a very high-end neighborhood, a wine-heavy neighborhood,” Fisk says.“ We were concerned that if we put our Cox ' s branding on that store, and made it feel more of like a smoke shop type of store at that time, that we may run off some of that wine business.”

“ So that ' s where we decided to keep Evergreen Liquors, just because of the name brand that that had in that neighborhood,” he adds.“ It was a very wellknown, established brand in Louisville. So we kept Evergreen Liquors on that location. And we started that business as our second brand.”

As the company continued expanding, it purchased a few more stores. One of which was Beverage Warehouse, which was down in Saint Matthew ' s, about a mile away from one of the main Cox ' s locations.

“ Again, that was a very alcohol-driven business, and we didn ' t really want to do another Cox ' s a mile away from our other Cox ' s,” Fisk recalls.“ So we came up with the plan of,‘ Why don’ t we rebrand that as Evergreen Liquors?’ And that kind of started up Evergreen Liquors as a chain, and really moved move the needle in that world.”

“ So now we had two stores a mile and a half apart from each other, but it ' s a Cox ' s and Evergreen,” he adds.“ And they both are very successful stores to this day. So we ' ve been in growth mode for 30 years. We ' ve never stopped growing. We ' ve always looked for the next opportunity, the next new placement of a store.”

Today, both brands combined count 26 stores. This includes a new spot in

Hillview, KY, opened earlier this year.“ We expect to open a couple of stores a year moving forward,” Fisk says. As both chains expand, what are the challenges of managing two district brands under one company roof?

“ Evergreen was our originally our big box liquor store. That ' s the store that competed with the big box in Louisville,” says Fisk.“ And then Cox ' s was a much more about the convenient space, in and out and that type of alcohol, that type of tobacco, those type of things, which is still somewhat true today.”

“ The Evergreen branding, however, has kind of morphed a little bit with the new store and with our Bardstown store,” he adds.“ We saw an opportunity, with NuLu [ Louisville’ s trendy East Market District ] to take a hold of the convenience, or take ahold of not only the neighborhood liquor store feel, but also really get the destination feel, and really get this tourism market into our stores. That Louisville store has really boomed over the last five, ten years.”

TASTING BARS The modern bourbon boom has brought countless tourists into the Louisville / Bardstown area. Many of these travelers( including this author) first learn about Evergreen Liquors through word of the store’ s impressive tasting bar.

Like other beverage alcohol retailers, Evergreen has handled the headache of allocated whiskeys by simply placing them on an in-store backbar for all customers to try. This eliminates the sense of unfairness some customers feel when they cannot access rare products. Instead, everyone has a chance to buy a pour of in-demand spirits.

“ The tasting bar concept has really blown up on us, which was somewhat expected,” Fisk says.“ The tasting bar concept started back at the old Evergreen Liquors, the original Evergreen Liquors, where we had a very large national competitor coming into our market. And we were trying to figure out,‘ Okay, how do we how do we keep our customers? How do we get our customers to continue to come in?’”

“ We were just at the early stages of this bourbon boom that we ' re all we ' ve all seen over the last ten years,” he continues.“ And the world of allocated bourbon was this just monster. It was something that everyone was looking for. Everyone wanted to try things. Everyone wanted a bottle. But we would only have two or three bottles for our 20 stores, or 15 stores at that time. So how do I decide you get a bottle and this person doesn ' t? And so the idea was,‘ Hey, let ' s put a bar in Evergreen and let ' s let people try this stuff’.”

As tourists flocked into Louisville and Bardstown, and started posting on social media about which bars had the best whiskeys at the best prices, it did not take long for Evergreen to top the“ must-visit” charts. The tasting bar became a huge win-win for the brand.

Combining a popular tasting bar into an expansive, neighborhood retail concept has worked well for Evergreen Liquors, especially as bourbon tourism booms.

“ So instead of making one person happy with a bottle of Pappy 23 year, we ' re going to make 25 people happy, because they ' re going to come into our store and be able to taste that 23 for the first time for a relatively normal price,” Fisk says.“ It ' s not going to be the steakhouse pricing and bar pricing. But at the same time, we ' re making pretty good money on it because it ' s higher margin than a normal retail margin.”

EMPLOYEE OWNED Another aspect that differentiates Cox’ s Spirit Shoppe & Evergreen Liquors is its employee-owned structure, a transition that allowed the family-run retailer to plan for the future while giving its workforce a stake in the company.

“ The idea began taking shape several years before the Covid-19 pandemic,” Fisk says.“ My father-in-law was really trying to figure out how to how to back out of the business and retire. He was one of those guys that worked until 10 p. m. every night. That ' s all he did was work. That ' s all he knew how to do.”

“ He brought me in about 11 years ago, and his brother ' s involved, too,” he adds.“ We have multiple cousins and such throughout the company. It ' s always been a family-run company. So he was not comfortable just selling the company to the highest bidder and walking away from it, because there was a lot of people that he cared about that were involved.”

The family considered several possibilities, including an internal purchase. However, the financial structure required to make that happen did not make sense for either side. Working with financial advisors, the owner began researching an Employee Stock Ownership Plan, or ESOP, as an alternative.

The structure offered a way for the owner to exit the business while keeping the company in the hands of the people who worked there. It also provided a path for employees to benefit financially from the company’ s future growth.

Cox’ s Spirit Shoppe & Evergreen Liquors officially became employee owned in June 2020, during an unusual period for both the company and the beverage alcohol industry. Covid prevented the retailer from gathering its workforce indoors for the announcement. Instead, the company erected a large tent in one of its parking lots, spaced out chairs and told employees that the owner had sold the company to them.

Since then, eligible employees who meet the company’ s work requirements receive shares in the business. Employees do not have to purchase those shares or contribute money to the program. Instead, the ESOP functions as a retirement benefit tied to the value and growth of the company.“ Their equity is their work,” Fisk says. The ownership structure has also changed how employees view their roles within the organization. As the company grows and its share price increases, employees can see a financial connection between the work they perform and the value of the business they collectively own.

Each year, the company meets with employees to announce its share price and provide certificates showing their individual balances. Employee ownership ultimately provided an answer to a succession question that confronts many family-owned retailers: how to allow one generation to exit while preserving the business for the people who helped build it.

“ It really gives us an opportunity to grow the business and make an impact,” Fisk says.“ And for a lot of people, that’ s fantastic.”

GROWTH IN A PULLBACK Like much of beverage alcohol retail, Cox’ s and Evergreen have navigated a changing marketplace following the pandemic. Fisk views the current industry pullback as part of a broader cycle rather than a permanent shift.

“ I think everything in this business is pretty cyclical,” he says.“ We obviously saw a huge boom during Covid. That was a massive revenue boom for us.”

The challenge came afterward. Expenses increased during the period of higher sales, while consumer demand eventually began returning toward pre-pandemic patterns. Rather than relying on beverage alcohol alone to drive continued growth, Cox’ s and Evergreen have built their business around a mix of categories that can offset one another as consumer demand changes.

“ The beauty of our business, and this is how our business has always been set up, is we are not in one industry,” Fisk says.“ We are not in one category.”

That diversification has become increasingly important as beverage alcohol faces softer demand. While some alcohol categories have remained flat or declined, other parts of the retailer’ s business have grown, including tobacco, premium cigars and hemp products.

“ We try and keep enough things on our shelves that we can move forward,” Fisk says.“ And we always try and keep on trends.”

The strategy is designed to limit the company’ s exposure to swings within any individual category. Fisk says that Cox’ s and Evergreen typically operate within a relatively narrow range of annual performance, rather than experiencing the double-digit increases or decreases that can occur elsewhere in retail.

Even during a difficult prior year, the company says revenue declined only about 2 % to 3 %. That performance has since reversed, with revenue running approximately 7 % to 8 % ahead early this year.

The results underscore a strategy that Cox’ s and Evergreen have followed for years: maintain a broad product mix, identify emerging consumer trends and use growth in one segment to compensate for weakness in another. At a time when beverage alcohol retailers face changing consumption patterns and pressure on sales, that diversification provides the company with additional ways to generate revenue beyond traditional beer, wine and spirits.•