WINE RANKED #17 IN IMPORTANCE TO RETAILERS
Table wine was up 9.1% in sales in the past year as households not only spent more on wine, but bought more wine as well. Clearly, the wine segment is exploding – but how much of its success should be credited to retailers? Many retailers have chosen to expand their wine aisles and increase displays, presumably as a result of wine’s success, but perhaps the changing trends in today’s retail shops are helping the category as well.
ACNielsen data shows that overall, value channels (warehouses, super-centers and dollar stores) are leading growth in retail while the grocery segment seems caught in a stalemate. Wal-mart, Kroger Corp. and Walgreens, not your grocery store, are ranked as the top 3 retailers in most markets, and continue to take trips from other non-value retailers. A notable trend lies in the fact that dollar stores (think Dollar General) have become more focused on food service and reaching out to women, doubling their store count and selling wine. Grocery stores are caught somewhere between big box retailers and c-stores, and are losing shopping penetrations because they’re not adding stores.
What’s the key to value channels success? For one, they reduce the number of trips shoppers make since they are able to purchase everything at one stop (a particular strength of Wal-Mart’s.) Today’s shoppers are attracted to quick and convenient purchasing opportunities, and according to the data, most shopping trips (69%) are small and meant to fulfill “immediate needs,” versus your extra large “stock up” trip. A whopping 85% of households shop at least once at Wal-Mart every year, and 6/10 households shop at Target.
One important thing to note is that alcoholic beverages drive trip frequency. So consumers today will actually go out of their way to pick up a bottle of wine during a time when people won’t got out of their way for much. But where they’re going to buy the wine is key, because even if they’re putting in the extra effort, convenience is still the most important thing. Grocery and liquor stores are still dominant channels in the wine category, but big box drives sales in younger households, while the older population typically shops at grocery stores. And while private labeling is up, Yellow Tail is the biggest selling wine brand in grocery stores and the second biggest in Target. Franzia is the most popular wine in drug stores.
As ACNielsen’s Danny Brager pointed out, “it’s not about mass marketing anymore, retailers must target specific consumers.”
If Wal-Mart builds more high-end stores similar to the one in Plano, it could lead its huge consumer following into trading up as well. Target and Costco will feel the heat for sure. But we think the future of retail lies in reaching out to consumers on an individual basis, and of course trading up to a more “specialty shop” kind of feel.
ACNielsen data shows that overall, value channels (warehouses, super-centers and dollar stores) are leading growth in retail while the grocery segment seems caught in a stalemate. Wal-mart, Kroger Corp. and Walgreens, not your grocery store, are ranked as the top 3 retailers in most markets, and continue to take trips from other non-value retailers. A notable trend lies in the fact that dollar stores (think Dollar General) have become more focused on food service and reaching out to women, doubling their store count and selling wine. Grocery stores are caught somewhere between big box retailers and c-stores, and are losing shopping penetrations because they’re not adding stores.
What’s the key to value channels success? For one, they reduce the number of trips shoppers make since they are able to purchase everything at one stop (a particular strength of Wal-Mart’s.) Today’s shoppers are attracted to quick and convenient purchasing opportunities, and according to the data, most shopping trips (69%) are small and meant to fulfill “immediate needs,” versus your extra large “stock up” trip. A whopping 85% of households shop at least once at Wal-Mart every year, and 6/10 households shop at Target.
One important thing to note is that alcoholic beverages drive trip frequency. So consumers today will actually go out of their way to pick up a bottle of wine during a time when people won’t got out of their way for much. But where they’re going to buy the wine is key, because even if they’re putting in the extra effort, convenience is still the most important thing. Grocery and liquor stores are still dominant channels in the wine category, but big box drives sales in younger households, while the older population typically shops at grocery stores. And while private labeling is up, Yellow Tail is the biggest selling wine brand in grocery stores and the second biggest in Target. Franzia is the most popular wine in drug stores.
As ACNielsen’s Danny Brager pointed out, “it’s not about mass marketing anymore, retailers must target specific consumers.”
If Wal-Mart builds more high-end stores similar to the one in Plano, it could lead its huge consumer following into trading up as well. Target and Costco will feel the heat for sure. But we think the future of retail lies in reaching out to consumers on an individual basis, and of course trading up to a more “specialty shop” kind of feel.
posted at 3:36 PM
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