Private Label Wines

[Craig Camp]

Like Costco, a small but growing number of retailers are cultivating their own brands -- or ``private labels'' -- for wine, thanks to a bumper year of grape production and a growing sophistication in wine marketing. It's a strategy that allows wineries to get rid of surplus wine, gives retailers a chance to draw new audiences and could increase the bargains for consumers.

[Phil Ward]

The private label wine industry has begun to boom because large retailers want a way to counteract the Fetzers, Mondavis, Glen Ellens, etc of the business. They knew if they could control the price and quality, they could then put their own label next to the above labels and have their employees flog their label, hence making more money for the company. To me this has never been about offering better quality to their customers, its all about leading the customer to a wine they make more money on. Now, being a capitalist at heart, I have no problem with this as long as the wine they are selling does offer better bang for the buck.

Many of the large chains, especially in my state, NJ, adopted this practice. My employer (a distributor) currently does very little of this with our customers although we do offer them occasional exclusives on 2nd labels, brands we need to develop, etc.

All of the above, imho, of course.

Phil

[bobferdon]

Private labels can be looked at in several ways. Sometimes they are great deals and a good value. As an importer with a fairly large portfolio I sometimes offer them to someone who can take just about all of what I have to sell. It just makes it easier for me. Rather then beating down doors to sell 1500 cases I get one or two groups to commit.

The bad part of the industry is the larger part. It is seen here in NJ a lot. Tons of virtual winery brands created just to sell of plonk. I know on an out-of-state distributor who buys bottle wine in bulk with a put 6 to 7 different labels on the same wine and the retailer charges a higher price for the better/prettier labels.

It's great that americans are drinking more wine but we are training them to drink some really bad wines and passing them off as good. The best wine shops are not the ones doing this.