7-Eleven Enters Value Wine Biz

FILED NOVEMBER 1, 2009

Dear Client:

7-Eleven is entering the robust value wine segment with a new private label chardonnay and sauvignon blanc. Yosemite Road is produced by The Wine Group and will sell for about $4 across the US and $5 in Florida due to state taxes. Table wines in the $3-$5 range are a big hit in c-stores. IRI c-store scan data shows that dollar sales of $3-$5 wines grew 12% in the 52 weeks to October 4, while volume rose 9%. Value brands grew faster than all other table wines and were beaten only by boxed wines priced above $2.

This marks 7-Eleven’s first foray into value wines. After researching the most frequently purchased products at their stores, the company realized “value-priced wines have been gaining in popularity and enjoying double-digit sales growth at 7-Eleven stores.” Its other private label wines, Sonoma Crest and Thousand Oaks, cost about $10. Note that Yosemite Road is currently a limited-edition wine that will be available while supplies last.

It also marks the company’s first global product launch. The wines will be released in 15,000 outlets, including 7-Eleven stores in the U.S. and Japan, as well as other subsidiaries of parent company Seven & i Holdings Co., Ltd., an $87.9 billion Tokyo-based corporation.

7-ELEVEN’S MOTIVATION. For starters, 7-Eleven obviously makes a higher margin on its house brands. Next, Yosemite Road is priced slightly less than an average 6-pack of beer, which could prompt c-store consumers to opt for wine over beer and perhaps trade up to 7-Eleven’s more expensive private label offerings. This not only drives traffic, but could make 7-Eleven a future destination for consumers seeking more of its private label wine. Lastly, c-stores have not done as well in the recession. Traditionally loyal c-store consumers aiming to save trips and cash have shifted more to big box and grocery stores. As a result, 7-Eleven is aiming to take back some share by tapping into consumers who are drinking more at home and trading down in alcohol purchases.

WSD BRIEF:

LVMH APPOINTS ADVISORY TO BERNARD ARNAULT. LVMH has appointed Patrick Ouart as advisor to its chairman and chief, Bernard Arnault. Patrick will become a member of the executive committee and will resume his former role with the group. Prior to this, he was advisor to the president of the French Republic.

ROBERT PARKER AND HIS FORMER ASSISTANT, Hanna Agostini, have reportedly dropped their cases against one another, says Decanter. You’ll recall a few years back when Hanna wrote an unauthorized biography about Robert in which she accused him of making catalogue errors and favoring friends in the 2007 book “Anatomy of a Myth.” He then retaliated on his website where he wrote: Hanna “could end up stagnating in prison” for an unrelated incident where she allegedly committed wine-related fraud and falsified documents in what is known as the “Geens Affair.” He was fined by a French court for violating her presumption of innocence but Hanna has since dropped criminal charges. Robert was the last to drop civil charges against her, claiming she used his Wine Advocate letterhead for invoices to Geens wine company in 2002.


Until tomorrow, Megan

“Just because something doesn't do what you planned it to do doesn't mean it's useless.”
Thomas A. Edison

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