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PL Wine a Category Ready to Grow, Says Experts

October 10, 2011
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Fresh & Easy’s recent announcement that it plans to expand its private label wine offerings comes at a time when the private label wine category is just beginning to blossom in the United States, industry analysts tell PLBuyer’s eReport.

 

“I think there is a lot of mileage left in the category, it is and has always been successful in the U.K so there is no reason to think that it would not do the same here,” says Jim Wisner, president of Libertyville, Ill.-based Wisner Marketing Group Inc.

 

A variety of approaches can be taken when entering the private label wine industry, explains Wisner. “The first model is the Trader Joe’s approach in which you create a single brand that is an iconic line and can be sold for an extremely good value. This has proven very successful for Trader Joe’s and very interruptive to the market when it was first introduced.”

 

“The second and probably most successful is the Costco model. Costco created a brand that is easily linked to the company by going out and making sure of the quality of the wine it sells. Having expert authentication has helped the brand immensely, it is not the cheapest wine on the market but it does have a high quality level.”

 

“We're seeing more private label wine. In most cases, the quality of the wine and the area of production is more important than the label,” explains Neil Stern, senior partner with Chicago-based retail consulting firm McMillanDoolittle. “That said, retailers are generally better selling private label wine as a controlled private label than running under the existing program or store name.”

 

“I think we’ve got plenty of evidence that good quality private label products of all sorts will appeal to consumers. I don’t think wine is an exception,” agrees Paula Rosenblum, managing partner at Miami-based Retail Systems Research (RSR Research).

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