SAFEWAY WINE DEPARTMENTS COLLAR 'CALIFORNIA GROWN' LABEL 2004-02-23 (1)

STEPHANIE FAGNANI

PLEASANTON, Calif. -- Safeway here is one of the first retailers attempting to steer consumers toward wine varietals grown in the state by displaying "California Grown" signs on select vintages.

Bottles of Gallo/Frei Brothers Redwood Creek Merlot and Cabernet and Meridian Santa Barbara Chardonnay wines in all Safeway stores throughout California have been outfitted with new point-of-sale materials that fit over the neck of the bottle, i.e. "bottleneckers." The tags are the product of the year-and-a-half-old California Grown campaign, which encourages shoppers to buy locally produced foods to help the state's economy.

"At Safeway, we sell a lot of wine. It's a very important part of our business," said Alexander Winslow, public relations director for the retailer's Northern California division. While Winslow would not release proprietary sales information, he told SN the chain carries an average of more than 1,000 different wines from all over the world.

"[The bottleneckers] attract attention, and the response from consumers to date has been positive," he said.

Safeway has been involved with the California Grown campaign since its inception, featuring POS materials in its produce section, Winslow added. Wine, he said, seemed an obvious next step.

"The California wine-growing region is one of the best in the world. It's got an outstanding reputation, deservedly so, for wine growing and wine making and for top-quality wines and lots of varietals."

The wine industry as a whole is rife with financial potential, and has been one of the fastest-growing, profitable consumer product groups for supermarkets and other retailers over the last few years, according to Karen Ross, president of the California Association of Winegrape Growers, Sacramento, Calif. To that end, it makes sense for the wine and grocery industries to pair up whenever possible on promotions, she said.

"The retailers like the wine shopper because of the other things that he or she tends to put into their grocery basket. So, it's a demographic worth paying attention to," Ross said.

Scott Horsfall, chief operating officer of the California Grown program, said the new bottlenecker program can be applied to categories in different departments within the supermarket, and eventually might be used on other types of bottled products like fruit drinks and even salad dressings.

"As part of an overall campaign, what we're trying to do is really surround the consumer as they're moving through a shopping environment with images of the campaign to remind them that it is important to look for California Grown," said Horsfall.

Retailers, like Safeway and Albertsons, use the California Grown logo regularly in store circulars and allow Horsfall and his team to conduct research in stores to test the effectiveness of the campaign.

"We can demonstrate to the retailers that by doing nothing beyond putting point-of-purchase materials up in their stores, they can increase department sales by 3% to 4%, which doesn't sound like a huge amount. But over the course of a year, that could be $140 million just in produce, just in California," Horsfall said.