Private Label: Value Vintages

Private Label: Value Vintages

ALONG WITH MAKING A STATEMENT in the spirits category, private label is getting more attention in the wine department. One of the latest trends is growing retailer interest in or bargain-priced premium wine. The segment gained popularity in 2002 when Trader Joe's launched its private-label Charles Shaw wine. Since it sells for $1.99 at many locations, it earned the moniker Two-Buck Chuck. Now, other

ALONG WITH MAKING A STATEMENT in the spirits category, private label is getting more attention in the wine department.

One of the latest trends is growing retailer interest in “extreme-value,” or bargain-priced premium wine.

The segment gained popularity in 2002 when Trader Joe's [4] launched its private-label Charles Shaw wine. Since it sells for $1.99 at many locations, it earned the moniker “Two-Buck Chuck.”

Now, other food retailers are involved.

This past spring, for instance, Kroger [5] launched Aconga, a corporate brand of Argentinian wine that sells from $2.99 to $5.99 per 750-milliliter bottle, depending on the state.

Aconga is available in two blends: malbec/cabernet sauvignon and chardonnay/chenin blanc.

Also this spring, Supervalu [6] launched Zamarro, also from Argentina. It's sold in two varieties: malbec/bonarda and chenin blanc/torrontes. Depending on the state, retails range from $3.99-$4.99.

The weak economy has led retailers to launch wines like these because consumers are more likely to trade down and try lower-priced selections, said Stephanie Grubbs, vice president of marketing for Winery Exchange, Novato, Calif., the private-label development company that helped launch both Aconga and Zamarro.

“In this environment, consumers are much more open to experimentation,” she said.

Tom Pirko, president of Santa Ynez, Calif.-based Bevmark, a beverage consulting firm, agreed.

“When there's this kind of prolonged economic stress, brand equity gets faded and people start buying on price,” he said.

At the same time, Argentina and other regions are offering plenty of high-quality wines at bargain prices.

“You can buy good wines from around the world for a reasonable value,” he said.

If the quality is there, many wine drinkers will stick with their extreme-value selections even when the economy recovers, Pirko predicts.

“Even when the recession eases, many people won't go back to their original brands,” Pirko noted.