Private label wine is growing at an exponential rate as consumers increasingly become more open to the concept and retailers continue to take cues from the European market, according to a panel of experts at the ongoing PLMA show in Chicago.
The U.S. private label wine market has more than doubled since 2012, reaching 12% of wine sales; it is predicted to reach a value of more than $20 billion by 2021, with private label wine share increasing to as much as 17% within the same time period, according to a Jean-Jacques report distributed at the event. In Europe, private label wine can account for as much as 30% of the market.
During the session, PLMA President Brian Sharoff said U.S. retailers are following Europe’s example of using private label wine as a “traffic driver” and favoring midpriced wines over budget offerings.
Panelist Paul Tincknell, partner with Tincknell & Tincknell Inc., concurred with Sharoff, declaring “three-buck chuck is over” and emphasizing the growing trend toward premiumization and wines that “tell a story.”
This is reflected in recent moves from retailers such as Walmart's new Winemakers Selection, Costco's high-quality Kirkland Signature wine selection and Kroger's focus on the geographical region of its private label wines.
According to panelist Maryrose Rinella, director, own brands product management at Albertsons-Safeway, consumers “don’t want to buy cheap wine; they want to buy value and quality wines. If it tastes as good [as a national brand] and is a little cheaper, it’s an easy decision [for the shopper],” she said.
Rinella also advised that retailers have an opportunity to educate shoppers about the merits of private label wines. She recommends conducting in-store sampling if possible and offering pairing suggestions for in-store meal kits.
She also encouraged retailers to enter their private label wines into consideration for awards and accolades, which will give shoppers increased confidence to choose a store brand over a national brand.
Another theme that was majorly emphasized at the talk was consumers’ increasing openness to different varieties they haven’t tried before and a desire for “experiential” wines.
As such, panelist David Falchek, executive director of the American Wine Society, said retailers have more of an opportunity to explore these options without certain hesitations of the past because, while there are still “bad” wines on the market, there are fewer “flawed” wines entering distribution than in past years.