HOUSE BRAND WINES, JUST LIKE TOOTHPASTE?
Prompted by the huge success of Trader Joe’s Charles Shaw wines (“Two-Buck Chuck” by Bronco Wine Co.), almost every major retailer has one by now. Everyone including 7-Eleven, Costco, and Target has joined the race to bring in the next big “Two-Buck Chuck” and all of the six million cases it produces annually. Even SF Gate thinks Frank Franzia’s brainchild should be christened the official state wine of California. So what does that mean for the industry?
WSJ recently published an article concerned with the subject and it got me thinking. Has wine become just another commodity that retailers can privatize - like toilet paper, toothpaste, and pain reliever? According to the article, private-label wine sales at food and drug stores have increased five times in as many years and risen 25% at food stores in the past year, according to Information Resources Inc. and ACNielsen. And last year’s huge grape crop will only prompt the trend to grow, making loads of cheap wine available to big chain stores.
Most house brands are generally made by large players like Wine Group, E & J Gallo, and even Foster’s, along with middle men companies that buy wines from vineyards and sell it to chains as private labels. However, much like house-brand napkins and mouthwash, the private labels rarely identifies the actual producer. So while the big boys are eager to make a profit, they don’t want their names associated with the product.
It’s a way to get rid of extra grape juice – sure, I understand. And the article even claims that some of the wines aren’t half bad. It’s all a part of New World wine companies – specifically American – making wine available and desirable to the masses. It gives wine companies an outlet for excess product, and expands itself to the general population. By 2008, the U.S. will be the largest wine-drinking nation (which isn’t necessarily saying much since our population is much larger than any of the contenders), which marks a huge culture shift. Wine is losing that specialness, that snootiness that it has always been associated with, which can be a good or bad thing depending on who you’re talking to.
There are just so many choices out there, how is one to choose? Certainly it depends on your consumer demographic. Some people will go with what’s easiest, what’s best looking, what’s on display, what’s the most expensive, what their friend said was good, what they actually like (gasp), or – with the rare connoisseur – what’s actually good.
In a recent conversation with a beer-distributor-turned-wine-wholesaler, he observed that wine sales are largely influenced by the people selling it, rather than by mega-branding, hence the abundance of small brands. If a waiter at a restaurant, wine editor, or a trusted friend recommends a brand, chances are you’re going to try it. You may even stick to drinking that particular brand for awhile, claiming it’s your favorite and the best there is around, until the next recommendation comes along.
So the point is, I suppose, that no matter how many brands there are and no matter what the image, you’re in the chips if you can create a people-based following.
WSJ recently published an article concerned with the subject and it got me thinking. Has wine become just another commodity that retailers can privatize - like toilet paper, toothpaste, and pain reliever? According to the article, private-label wine sales at food and drug stores have increased five times in as many years and risen 25% at food stores in the past year, according to Information Resources Inc. and ACNielsen. And last year’s huge grape crop will only prompt the trend to grow, making loads of cheap wine available to big chain stores.
Most house brands are generally made by large players like Wine Group, E & J Gallo, and even Foster’s, along with middle men companies that buy wines from vineyards and sell it to chains as private labels. However, much like house-brand napkins and mouthwash, the private labels rarely identifies the actual producer. So while the big boys are eager to make a profit, they don’t want their names associated with the product.
It’s a way to get rid of extra grape juice – sure, I understand. And the article even claims that some of the wines aren’t half bad. It’s all a part of New World wine companies – specifically American – making wine available and desirable to the masses. It gives wine companies an outlet for excess product, and expands itself to the general population. By 2008, the U.S. will be the largest wine-drinking nation (which isn’t necessarily saying much since our population is much larger than any of the contenders), which marks a huge culture shift. Wine is losing that specialness, that snootiness that it has always been associated with, which can be a good or bad thing depending on who you’re talking to.
There are just so many choices out there, how is one to choose? Certainly it depends on your consumer demographic. Some people will go with what’s easiest, what’s best looking, what’s on display, what’s the most expensive, what their friend said was good, what they actually like (gasp), or – with the rare connoisseur – what’s actually good.
In a recent conversation with a beer-distributor-turned-wine-wholesaler, he observed that wine sales are largely influenced by the people selling it, rather than by mega-branding, hence the abundance of small brands. If a waiter at a restaurant, wine editor, or a trusted friend recommends a brand, chances are you’re going to try it. You may even stick to drinking that particular brand for awhile, claiming it’s your favorite and the best there is around, until the next recommendation comes along.
So the point is, I suppose, that no matter how many brands there are and no matter what the image, you’re in the chips if you can create a people-based following.
posted at 8:20 AM
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