LA JOLLA, Calif. - Supermarkets are in a unique position to sell wine, yet their failure to capitalize on it is costing them share to other channels, according to a wine consultant.
Supermarkets sell food and other products, which makes them more convenient than other retailers selling wine, said Eddie Osterland, a sommelier who runs Supermarket Sommelier Online here, a consulting firm.
"[Supermarkets] have a captive audience that is more than willing to buy wine," he said.
With the number of retailers selling wine on the rise, supermarkets need to beef up their wine business now more than ever, he said.
"Supermarkets dominated for so long with little competition," Osterland said during a recent conference presentation. "But all that's changed."
Big-box stores like Costco can buy in bulk and pass on their savings in the form of lower prices. Specialty wine shops, meanwhile, attract shoppers with customer service and breadth of offerings.
Osterland suggested the following ways to improve wine profits:
Proper storage. High-end wine should not be stored upright, but laid down to prevent the cork from drying.
Trained staff. Store associates should be educated about which wines go with which food.
"Wine itself can be extremely intimidating. All it takes is a small amount of guidance to get the customer confident enough to make a purchase," he said.
Variety. While chardonnay and merlot are key for many wine buyers, don't neglect other styles, like sangiovese and shiraz.
Variety applies to pricing, too. Represent wines not only in the $5-$12 range, but also $13-$35, and even $36 and up.
Forget wine ratings. Wines scores appeal mostly to men, yet most supermarket sales are made by women, who often just want to know how to pair wine with food.
Cross-merchandise. Supermarkets are in a unique position to cross-sell wine, placing a wine kiosk in the meat department or having a butcher recommend a wine that goes with a customer's order.
Discounts. Offer 10% off when a customer buys six or more bottles.
This couldn't be a better time for supermarkets to pump up their wine efforts, as the market has yet to peak, Osterland said. By 2010, there will be more than 212 million Americans of legal drinking age, and at the current growth rate, U.S. wine sales will top 300 million cases by 2010, he said.
Osterland said the two key demographic groups to target are boomers and millennials: boomers because they're interested in wine's health benefits of wine and have more free time and disposable income, millennials because they were raised in wine-drinking households.
"They grew up with baby boomer parents and see wine as a status symbol," said Mike Gibson, another sommelier at Supermarket Sommelier Online.