In the age of supermarket price wars, retailers are searching for new ways to gain competitive advantage and earn higher margins. In the wine category, this often translates to private labels and brand exclusives.
The wine market is heavily saturated with producers, but three-tiered distribution vastly limits how many of these products can make it to store shelves. This results in nearly every retailer offering the same wines. Customers are able to compare pricing at different stores, leading to a highly competitive market, with each retailer fighting to have the lowest prices and slashing their margins. Private label wines are rewriting the rules to the game. Learn more about how to add them to your inventory here.
Why Retailers Love Private Label
When a retailer brings on a private label or brand exclusive wine, they regain control. First and foremost, they're the only retailer in that market selling that wine. This gives them competitive advantage and drives customers to their store specifically. Retailers also take back control with blind pricing. Consumers don't have a ballpark, socialized price for this new wine allowing the retailer to set their own prices while building room for higher profit margins.
So, just how quickly are private label and brand exclusive wines growing? Costco already has 17 private label wines in rotation and Sam's Club is aiming for 25 within the next three years. And it's not just the large wholesalers taking advantage of these products.
This summer Target unveiled a nationwide roll out of California Roots, their new private label wine which retails at $5 a bottle. Whole Foods released Three Wishes which available exclusively at Whole Foods Markets, and Trader Joe's has long paraded their exclusive Charles Shaw wines (more commonly known as 'two buck chuck'). Taking the game to the next level is Total Wine & More, who has an astonishing 2,000 wine brands sold exclusively at their locations!
Even Amazon has gotten on board. They recently launched Proverb, a wine brand from Gallo which can only be purcahsed on Amazon.com. As all the major retailers are turning more towards private label and brand exclusives, the smaller stores are quickly following suit.
Every Retailer Should Add Private Label/Brand Exclusive Wines
With all the wine being produced, there has never been more opportunity for any retailer to be adding private label and brand exclusive wines. With web technology, finding available producers and working with distributors for clearing and compliance of wine has never been easier.
As the supermarket price wars rage on, private labels and brand exclusives are a great opportunity to gain competitive advantage, earn higher margins, and reclaim market share. Oh - and make more money. Here's a fun fact: private label/brand exclusive wines earn an average of 50-55% margins per bottle. Need we say more?
Interested in exploring how to add private label or exclusive brands to your inventories? You should be! To learn how you can get started, download our free DIY Guide to Private Label and Exclusive Brand Wines or click the button below!