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Dos and Don’ts of Creating a Private Label Wine Brand

To develop and implement a successful private label strategy is vital. Here are some of the key points to consider.

20/05/2019

With so many own label wines now available in retailers, restaurants and bars it can be hard to work out which wines have come directly from a wine producer, and which ones have been dreamt up by a private label development team. Which, for most retail and restaurant operators is how they want it.

But it is an increasingly difficult balancing act to get right. Particularly at a time with consumers are looking for authenticity and transparency and will quickly turn their backs on products, companies and services they think are taking them for a ride.

The good news is, the average consumer is quite happy with the idea of buying private label products. It often means they can get as good a quality product, to the branded alternative, but at a cheaper price.

To stand out, and be taken seriously and credibly by shoppers, then any brand, be it a private label or from a major producer, has to have a story to tell, a reason to exist otherwise why should a shopper part with good money to buy it.

Managing expectations

So it is vital any private label range, whatever the price point, stands up to the expectations of the target consumer group. Be it at entry or luxury level.

There is no point in investing in gold lettering for a label that is going to retail for less than $6. It just won’t look right.  

Equally, there is increased pressure to get the positioning of the private label right the higher up the pricing ladder you go. Take a more upmarket, premium retailer or restaurant group. They might have an advantage in terms of their customers accepting the idea of them producing a quality, higher priced own label range. But they will also have to reach higher standards and expectations about how good quality that private label is.

If you want your consumer to pay more for your private label wine then you have to give them multiples reasons for doing so. From the quality and uniqueness of the product, through to what it looks and feels like, from the bottle design to the messaging and imagery on the label.

This is very much the approach that Majestic, the UK wine specialist, has taken in building up a private label range that is now around half of its entire offer. As Beth Pearce, wine buyer, told IBWSS London: “I think private label brands are stronger if they have a bit of that origin and sense of place about them.”

Meeting retailer demands

If you are a supplier looking to win a private label contract then are you set up to deliver it? Retailers know what they want, but do you? They know their consumers and their needs inside out and they will expect any supplier working on a private label contract for them to be, if anything, one step ahead.

They want solutions, not problems, as Clive Donaldson, wine sourcing manager at Morrisons, the UK supermarket chain, told last year’s IBWSS London event: “If a wine supplier, importer or agency business wants to work with a supermarket like Morrisons then they need to understand exactly how it works and what it needs for its customers.”

They also want consistency and reliability. If a private label wine goes well, the chances are they will want to repeat it. But have you sourced and planned in enough wine in your supply chain to meet any new demands? Failure to do so could have worse consequences for you as a supplier that if the private label wine had fallen at the first hurdle.

Being able to develop and implement a successful private label strategy for a retail partner has become a vital and specialised part of the industry. It’s why most mature wine markets will have a handful of suppliers and operators that are seen as trusted, safe hands to do business with.

They have the know-how, the resources and vitally the network of their own wine suppliers and producers to meet the needs of their retailer customers.

Paul Schaafsma, former heard of Accolade Wines, and now founder of Benchmark Drinks, says it is the flexibility and ability for suppliers to find new sources of wine that is so important. As he told this year’s IBWSS conference in London: “Given the different vintages we have and what is happening around the world, the ability for a buyer to change where they source their say supermarket dry red from and choose where the best opportunities are is fantastic. It allows the country with excess supply to find a sale, and keeps everything efficient.”   

Right place, right time

Get it right and a new private label range can arguably go much further in meeting consumers’ expectations than a new brand. They, after all, have chosen to shop in that retailer or go and eat at a particular restaurant chain. They know and like the values that those operators have and the quality of service they provide. 

But if the supplier or retailer gets it wrong then it is the product equivalent of scraping your fingers down a chalkboard. Like trying to ram a square peg in a round hole. No matter how closely the retailer and the supplier worked on the project, if the private label does not work then it will be the supplier who sourced the wine, and potentially come up with the look and feel of the brand, that will be the one to take the blame.

In private label, the customer - be it the retailer or restaurant group - is always king.