Dive Brief:
- Consumer enthusiasm for private label wine sold at grocery stores is growing, according to a recent article on The Shelby Report. Wine sales of all brands in supermarkets have now reached more than $10 billion.
- Trader Joe's is credited with starting the private label wine trend with the success of its Charles Shaw line, aka "Two Buck Chuck," although the price has risen to $3 a bottle in recent years. Now retailers like Whole Foods, Costco, Aldi, and Lidl offer store brand wine.
- Affordable private label wines are winning awards for quality. Lidl recently won more than 100 medals at the International Wine Competition in Los Angeles, and Aldi's $10 Rose was cited as one of the best values for wine at the International Wine Challenges Great Value Awards.
Dive Insight:
Private labels have gotten a makeover, at least in the mind of consumers. No longer viewed as a lesser quality, cheaper product, they now represent 17% market share in the U.S. In addition, Kantar Retail's grocery analysts predict private label growth between now and 2022 will outpace the previous five years.
Its no wonder supermarkets are now parlaying store brand popularity to the wine aisle.
There is currently an upswing in interest in wine and a rise in product launches. Millennials, already fans of private labels, are some of the most enthusiastic wine consumers. According to Wine Spectator, millennials drank 42% of all wine consumed in the U.S. in 2015, a rate higher than any other generation's consumption.
The reasons consumers are picking up bottles of store brand wine highlight what's important to them: quality and value.
The top retailers for private label wine include Trader Joes, Whole Foods, Costco, Aldi, Lidl, and Target. Entering their bottles into wine competitions is helping boost sales, by demonstrating to hesitant customers that they are considered a quality product.
Retailers looking to further increase sales of their store brand offer regular tastings. If seeing is believing, then tasting is telling. In addition, grocers may pair private label wines with meal kits.
One interesting note is that private label wine can only help retailers in states that allow supermarkets to sell wine. California is on one end of the regulatory spectrum, allowing sales of liquor, wine, and beer. Utah is at the other end, requiring consumers to pick up alcohol at a state run store. There are enough states that allow wine sales in grocery stores or we wouldn't see this uptick.