Private-label wine market shows its strength

A wine’s label is its signature, its calling card and its major branding tool – but vineyards’ sales opportunities may expand when they use that valuable label space to launch a partnership with other brands, such as store chains. Private-label goods have a long history, but their place in retail has been fairly nondescript until recent years. Invigorated by high-quality products and receptive customer bases, companies such as Trader Joe’s have been working hard to make a splash with their self-branded products, wine included.

Wine’s role in the private-label world
What does it take to create an alliance between wine and store? Just-Drinks contributor Richard Siddle noted that the companies taking advantage of private-label sales opportunities are the ones moving quickly, building high capacity and studying customer preferences. He explained that they have seen success where more established brands are fading, and that a lot of the fresh new ideas flooding into winemaking are doing so through these alternative channels rather than the traditional stalwarts.

Certain sectors within the wine industry are particularly susceptible to disruption. For example, Siddle pointed to sparkling drinks. Prosecco and similar beverages don’t have the same kind of established brand-name power players as general wine offerings, and this has introduced opportunities for store-brand interlopers. He added that among the top 10 best-selling sparkling wines in U.K. retailers, five are house brands.

Studying a sector on the rise
A recent Just-Food article by contributor Victor Martino pointed out that Siddle’s examinations of British practices also apply to the U.S. market. For instance, Costco has seen a large degree of success with its house brand Kirkland Signature. That line includes wine, and these bottles have begun to compete with established vineyards’ offerings on Costco store shelves. Martino explained half of annual wine sales at Costco are Kirkland Signature vintages.

He added that there is a “squeeze” going on in today’s retail market. Consumer packaged goods sellers have seen questionable financial results in recent years, and it’s becoming clear that some of their fiercest competition is coming from the store-brand organizations rather than fellow national marks. Martino ex explained that the rise of these private-label sellers is occurring at a rate of 10 percent per year, citing Nielsen reports. Next steps for companies depend on whether they can get into this space or not. If so, they have a new sales avenue. If not, they’ve gained a competitor.

Companies hoping to brand their products for own-brand sales should have high-quality labeling systems. Find out more about in-house label printers at Optimedia’s U.S. site or Canada page.