Store Brands

DEC 2015

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

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5 6 Store Brands / December 2015 / ver recent decades, Americans have developed a growing thirst for wine. According to the San Francisco-based Wine Institute, per-capita wine consumption increased from 1.7 gallons in 1975 to 2.8 gallons in 2014. In its June "Wine in the US" report, London- based market research firm Euromonitor International notes that although wine is now a well-established consumable in the United States, a continually developing taste amongst millennials and other young Americans for sophisticated foods and beverages favors further growth here. "In 2013 and 2014, consumers exhibited a preference for more premium wines in the off-trade, with nearly every style of wine experiencing growth in higher price bands and declines in the lowest," Euromonitor states. "The shift in consumption results from consumer confidence in the economy, the general trend in premiumization and a growth in product availability of mid-priced wines, creating a bridge for consumers looking to develop a more sophisticated palate and do so affordably." Trends with traction One trend with staying power is that toward the expansion of private label wine, notes Aurore Godin, U.S. sales executive assistant with Les Grands Chais de France, Petersbach, France. "I see the private label part of the business increasing as more and more chains develop and expand their brands," she says. "As the chains expand, so will their private labels, and there being so much available wine today, there will be more potential as well." Of particular interest are rosé, sparkling and fruit wines, as well as varietals such as Pinotage, Tempranillo, Grenache and Malbec, Godin notes, particularly those that are sourced from the originating countries that have old vines and sufficient available quantities. "The chains now can buy good and great qualities and promote their own brands, as well as put them on sale and make the pricing highly competitive versus the brand name," she adds. "Thus, [they get] good markups, too, versus the competition and get brand loyalty from the consumer." Trends on the horizon Looking ahead, expect some emerging trends for 2015 to pick up further steam in 2016. In a January 21 article on the Portland Tribune website, David White points to two such trends: one toward the growth of more affordable "grower Champagne" and another toward the growth of wine labeled "natural." Also on the horizon could be a shakeup in wine packaging formats. According to "Wine Packaging," an August report from The Freedonia Group, Cleveland, glass bottles will continue to lose market share to a growing array of alternative package formats. "In addition to bag-in-box packaging, other containers that have established a presence include plastic bottles, plastic cups and goblets, aseptic cartons, pouches and cans," the company says. "These alternatives are growing in popularity due to performance features, product differentiation capability and appeal to younger consumers, who are less attached to wine traditions than are older consumers." The Freedonia Group forecasts that bag-in- box packaging will make strong gains because of expanded 1.5- and 3-liter premium offerings. "The recent adoption of bag-in-box by premium wine brands, particularly in 3-liter sizes, is helping to mitigate the stigma of 'boxed wine' as inferior in quality to bottled wine," the company says. — K. Canning They'll toast to that Retailers will find ample private brand opportunities in rosé, sparkling and fruit wines, as well as varietals such as Pinotage, Tempranillo, grenache and Malbec. WiNe

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