STORE-BRAND BEVERAGES COULD GIVE RETAILERS CHEER

Stephanie Fagnani

Many retailers already have store-brand products to position against the national-brand equivalents in most categories. Lately, however, it seems data points to the beverage category, both alcoholic and nonalcoholic, as being an area in which store brands can truly steal some of the spotlight from their national competition.

A recent report from the New York-based Beverage Marketing Corp. revealed that Cott Corp., a leading private-label soft-drink manufacturer, saw the most substantial growth in volume, 14%, from 2000 to 2001, when compared with national manufacturers the likes of Pepsi and Coca-Cola. This coup was attributed to Cott's increased distribution within the mass and club channels.

"One of the reasons for the increasing popularity of [private-label] carbonated beverages is that the current economic softness is helping to drive trial. And it's the quality/price relationship that is bringing the consumer back for repeat sales," attested Ken Kornita, product manager for cookies/crackers/snacks/car-bonated beverages at the Skokie, Ill.-based cooperative Topco Associates.

Alcoholic beverages are yet another segment that seems primed for private-label excellence.

The fact that sales of wine and spirits in supermarkets are showing moderate growth is one of the reasons the New York-based Private Label Manufacturers Association has deemed the category ripe with private-label possibilities.

In fact, the association will launch a new private-label wine-and-spirits section at its "Legend of Store Brands" annual trade show this November in Chicago.

It's the association's contention that, with so many different brands of wine on supermarket shelves, the consumer is more apt to buy "randomly" rather than stay loyal to a particular brand.

PLMA points to retailers like Wal-Mart, Kroger and Albertson's, offering exclusive wine brands; Safeway, with a range of private-label liquors; Trader Joe's, with its stock of imported wines under its own label; and Whole Foods Market, with its "365" brand private-label wine, as being leaders in the movement.

While Topco doesn't currently offer its members private-label brand wine and beer, Kornita said he expects the company will soon explore that avenue, which would enable several of its members to begin a journey down this promising path.

Data from market research firm ACNielsen, Schaumburg, Ill., shows that, for the 52 weeks ended Feb. 16, total wine sales reached nearly $3.7 billion, a 5.9% increase from the prior year, in food stores that generate at least $2 million in annual revenue.

As for liquor, total sales increased 6.9% to reach $1.7 billion for the same time frame.

For those same food stores, total sales of private-label wine grew by a significantly more impressive 12.8% to $151,043, while total sales of private-label liquor grew 3% to $84.7 million, according to the ACNielsen data.

These numbers, coupled with the increase in at-home dining and entertaining, along with the PLMA's slated push of the segment, seem to suggest that the nectar of the gods may very well become the product of a less heavenly origin in the future.