How To Come Up With The Perfect Strategy for the Private Label Market
The wine business is not just about having the types of wine that consumers want to buy, it is also about maximizing the value.
The rapid growth in the private label wine market within the UK has also led to dynamic changes in the business models of many companies along the wine supply chain. The modern wine business is no longer just about having the types of wines that consumers want to buy, it is also about maximizing value at every step during a wine’s path to market, from source to bottle to the shelf. As a result, the UK is also seeing the rise of new hybrid companies in the private label market that unite the roles of both buyer and seller.
A hybrid strategy for bulk wine and private label
One example of this new hybrid model is Benchmark Drinks, founded by Paul Schaafsma, the former CEO of Accolade Wines and Broadland Wineries. Based on his previous experience building brands at McGuigan Wines and Australian Vintage, as well as his extensive links with suppliers and contract bottlers from his time at Accolade and Broadland, Schaafsma created Benchmark Drinks as a way of bringing all of this expertise to the private label market. His company enables clients to access both the bulk and bottle wine markets, and then to create unique brands using best-in-class business practices.
On the supply side, for example, Benchmark Drinks has formed a strategic alliance with Pinnacle Drinks in Australia. This relationship with Pinnacle, which is the sourcing and development arm of Woolworths in Australia, enables Benchmark to source bulk wine from two of the most desirable bulk wine destinations in the world – Australia and New Zealand. With access to premium bulk wine from Down Under, Benchmark Drinks can then confidently approach major wine buyers in the UK, such as wine buyers at supermarkets and on-trade operators.
Then, on the demand side, Benchmark Drinks can work with both new and established brand owners to create world-class private label brands. This is about more than the traditional world of brand building – it is also about finding new strategic partnerships, new distribution channels and new business models. For example, Benchmark Drinks now works with Greencroft Bottling Company in the UK to provide contract bottling opportunities.
Creating and building brands
Most notably, new efforts are being made to create private label brands that are just as recognizable to the average consumer as those from traditional wine brands. A great example, says Schaafsma, is his company’s work with New Zealand-based Invivo Wines, which was looking for a complete solution as it built out its presence in the UK.
As part of this work, Benchmark collaborated on the Graham Norton celebrity wine range. Graham Norton is already the fastest growing New Zealand wine brand, and now it is looking for a way to become a Top 5 brand within the UK wine marketplace. The company has already skyrocketed production from 14,000 to 3 million bottles of wine in just 4 years, and it is looking for a similar type of “Norton Factor” effect in the UK.
Already, Benchmark has worked on a number of different ideas for Graham Norton to become a UK household name – everything from adding new distribution channels, to add a line of Rosé and Prosecco wines in order to tap into two of the most powerful consumer trends in the wine market today. As Schaafsma points out, it is no longer a case of, “Here’s my brand, buy me.” Companies need to take a much more proactive role in understanding the consumer and offering something unique.
Building on this momentum with Graham Norton, Benchmark is also working on a line of private label wines from English cricket legend Sir Ian “Beefy” Botham. The goal is to create a three-tiered new Botham range of Australian wines that will be a hit with UK wine drinkers.
The important point to note here is that it often takes as much care and attention to build a private label brand as it does a traditional brand. The first step, of course, is getting the wine blend correct. That’s why Benchmark Drinks is investing in new data and insights tools that can tell it exactly what UK consumers want to drink. Using the flexibility of the bulk wine market, it is then possible to create a private label wine that exactly meets those specifications.
Remaining nimble in a fast-moving market
In coming up with the perfect strategy for the private label wine market, it’s important to remain nimble and fleet-footed, says Schaafsma. He keeps his team small in an effort to meet customers’ needs as quickly as possible. “Buyers want to talk to the decision maker,” he says, and so it’s important to remove the multiple layers of management that often bog down traditional wine companies.
Some clients say, Schaafsma, are looking to develop exclusive brands. Others are looking to create private labels that are widely available across multiple different distribution channels. As a result of the blurring of the line between the world of traditional brands and private labels, it’s often possible to combine insights from one area and apply it to the other. With a true hybrid approach that unites supply and demand, Benchmark can remain agile and nimble, even if consumer trends shift suddenly.
Join other members of the UK wine industry as they discuss bulk wine
One way to learn more about new business models in the bulk wine and private label industry is by attending the upcoming International Bulk Wine & Spirits Show in London in March 2019. There, members from each stage of the global wine supply chain – importers, distributors, négociants, suppliers, retailers and contract bottlers – will be meeting over a two-day period to discuss trends in the industry, to find new partnership opportunities, and to establish relationships with bulk wine suppliers and private label specialists from all over the world.
The International Bulk Wine & Spirits Show (IBWSS) will take place in London on March 11-12, 2019. The event includes both a two-day business conference and a trade exhibition hall for buyers and sellers.
This article has been adapted from one that originally appeared on The Buyer website. The author of the original article was Richard Siddle, who covers industry trends in the global drinks business and provides insights and analysis for The Buyer. LINK: http://www.the-buyer.net/people/paul-schaafsma-still-looks-to-drive-success-through-consumer-focused-successful-wine-brands/