With wine sales declining, there’s buzz in private label

Private-label wine is a rare bright spot in an alcohol category that’s seeing significant declines, so now is a prime time for retailers to capitalize on consumer interest.

That’s according to an expert panel that discussed the topic this week during a session at the Private Label Manufacturers Association (PLMA) Trade Show in Chicago.

“There’s no better time to find private-label wine,” said Darryl Brooker, CEO of importer Latitude Wines. “All those wineries around the world that used to only make their brand and never wanted to get into private label, they all want to be in private label now because it’s growing.”

Private-label alcohol sales are up 12% for the latest 52 weeks, 15% year to date, and 23% compared to two years ago, according to Simon Cutts, senior director of retail partners at Chicago-based research firm SPINS.

And when you drill down into those numbers, an interesting trend emerges, Cutts said: Consumers aren’t just seeking out the lowest-end private-label wines, they’re looking for more of a premium product.

“Private labels are growing and growing strong,” he said. “The second bright spot within the whole wine business in general is that the $15 to $20 range of wine is growing strong … not just dollars but units, too. Maybe it’s, I’m drinking less wine, but I’m going to drink better wine. And so we’re seeing that trading up happen.”

Related:The 5 keys to Aldi’s private label success

Retailers have taken notice of the growing interest in private-label wine in the last 18 months or so, with Gelson’s Markets in Southern California adding four bottles to its Napa Valley collection and Albertsons introducing its Vinafore and Bee Lightly private-label wine collections. Even convenience-store chain Circle K debuted a line of private-label wines in 3,000 stores in May 2023.

For a grocery retailer with limited shelf space, there are both advantages and disadvantages when it comes to pursuing private-label wine sales, noted Taylor Rausch, wine and spirits category manager for Albertsons.

“Some of the biggest advantages are that you are more in control of the branding. You’re in control of the positioning on the shelf,” Rausch said. “You control things like price point, the adjusted margin that you have, the gross profit that you make.”

But it can also be a challenge to figure out where your brand fits in among well-known national brands. It’s a process that involves lots of trial and error, tastings and understanding of your consumers and their various need states, he said.

At a previous job, Rausch said, he created a fake retail shelf in his office, with bottles of every alcoholic option one could find in the store. He would ask coworkers, What would you grab if you’re home with your spouse, ordering takeout? What would you buy if you were going tubing down the river with friends? How about Thanksgiving dinner or the Fourth of July?

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“The merchandising piece is going to be critical,” he said. “Because the national brands are doing it. If you’re working with a company that also does national brands, you can leverage or work with their national brand to also raise the tide of your private label. This is something that I’ve found is beyond critical to the success of private labels.”

National-label wines have long generated consumer enthusiasm through storytelling. Think advertising and labels featuring romantic, picturesque vineyards. How can a relatively faceless store brand compete with that emotional appeal?

“That’s actually been one of the biggest problems with private-label wine,” said Jeff Siegel, the panel’s moderator, who is a wine writer and industry expert known as The Wine Curmudgeon. “Know who your audience is and do that label for that audience. That’s the beginning of that storytelling business.”