For private label wine, it’s more grape expectations.
In 2020, some 40,000 consumers voted for their top picks in packaged goods for Product of the Year USA. The winner in the wine category was not a recognized-name varietal from a storied vintner, but rather a $10 Quarter Cut Bourbon Barrel-Aged Cabernet Sauvignon sold exclusively at Aldi.
“More retailers are citing private brands as a pillar of their overall corporate growth strategy plans, and the demand is carrying over to the wine category,” said Kate Helm, senior manager of private brands at E. & J. Gallo Winery. She noted that E. & J. Gallo doubled its private brand volume sales between 2014 and 2018 and is on track to repeat that performance through 2022. “We’ve experienced double-digit volume growth in each of the last nine years and forecast similar growth again in 2021.”
Action at the High End
While much of the volume in the private label wine category continues to be driven by the value segment, retailers are increasingly responding to consumer demand for higher-quality products, including premium and super-premium wines. Private wine brands are experiencing a similar shift toward premiumization as that of national brands, although Helm said the price thresholds and levels of success can vary significantly in each segment.
“For those specialty retailers with well-trained staff with the ability to hand sell or interact directly with consumers, the price threshold for a private brand wine increases significantly and can, at times, be on par with national brands,” said Helm. “In other retailers, many consumers have shown a preference to stick with familiar national brands at a super-premium price point versus trying new private brand wine offerings."