Retail giant Walmart has been trying to get a hand in every market during the past few years and now the company has entered the wine business with their new private label wine collection. The company’s Winemakers Selection has been introduced in 1,100 stores across America and includes 10 private label wines that are sourced from California, France and Italy.
This move comes after other competitors such as Trader Joe’s, Lidl and Aldi had introduced their own selection of private label wines. However, Walmart was not far behind this trend when they tested a private label wine collection at Sam’s Club, a division of Walmart. After noticing successful sales, the retailer decided to roll out private label wines in their Walmart locations.
“In the past, we would canvass the world and figure out what was available and what we could do quickly at scale,” said Al Dominguez, Senior Vice President of Merchandising to Winsight Grocery Business (WGB). “We took a slightly different approach in working directly with winemakers.”
The Winemakers Selection is comprised of nine different wines that retail at about $11 each. Dominguez told WGB that these wines “outkick their coverage” and although they retail at a low price they “drink like a $30 bottle of wine.” Each wine shares the Winemakers Selection emblem on them with similar designs on their rear labels that have descriptions of their origin. In addition, each wine also has suggested food pairings that consumers can use for an easy shopping experience.
Currently, Walmart is “under shared” in the wine market as a seller according to Steve Bratspies, Chief Merchant at Walmart.
“We are looking to get up to parity,” he told WGB. “And if we get up to parity, we’ll have some opportunities to do some things.”
Bratspies hopes that the new wine selection will improve Walmart’s private label reputation and reinforce the image of quality in their products. The company’s new wine selection might also bring in new customers and encourage them to purchase the recommended pairings for each beverage in-store. According to Bratspies, wine is also a popular product in the millennial market.
This new addition to their portfolio takes advantage of two emerging trends: wine and private label products. According to Zion Market Research, the global wine market was valued at $302.02 billion in 2017 and that number is expected to increase to generate a revenue that is around $423.59 billion by the end of 2023. Additionally, private label products have been finding a lot of success in the grocery market as well. In fact, private label products outgrew the product sales of national brands in 2017.
However, Walmart is not the only retailer tossing their hats into the wine market. Trader Joes offers a variety of private label wines and is well known for their low prices. Other retailers such as Aldi, Lidl, Costco and Whole Foods also have a selection of private label wine products, which contributes to the stiff competition in the private label wine market.
However, due to the broad selection of private label wines, consumers have been found to purchase wine more often. This means that Walmart still has a chance to gain loyal consumers for their new wine selection, but right now they need to focus on their marketing efforts in order to get Winemakers Selection’s name out in the mainstream market.
“It’s how we display it, but also about making sure we have the pure linear square footage to carry the breadth of assortment we need,” Bratspies said. “We are also working on the experience, looking for different ways to present the product.”