This article was published by Beverage Trade Network in March 2018.
If you are a distributor who is looking to produce your own distinct wine brand for sale in your region, private label wines offer a whole host of benefits that you’ll love.
It’s fair to say, that as a wine distributor your success relies on sourcing the right products from around the world to distribute in your local market.
The trouble is, that you are not the only distributor in your country, which means that your competitors also have access to the same wine brands as you. This is making it increasingly difficult for you to stand out from the crowd and be able to offer your customers unique wines.
If only there was a way to produce your own wine, under your own brand, that allowed you to distribute a product that no one else had – well there is – welcome to the world of private label wines.
What is a private label wine?
As you well know, wineries tend to supply their wine to importers already in go to market form – i.e. bottles complete with their own label, name, and branding.
In contrast, private label wine gives you the opportunity to create your own label, name, and branding to help you develop a unique product for your market that no one else has access to.
Creating a private label means you can concentrate on branding, marketing, and selling your own wine, without having to go through the lengthy (and expensive) hassle of producing your own wine.
Put simply, it means that the producers can concentrate on what they do best (making wine) and you can concentrate on what you do best (selling it) – while giving you ultimate control of the final product.If only there was a way to produce your own wine, under your own brand, that allowed you to distribute a product that no one else had – well there is – welcome to the world of private label wines.
Why should you own a private label?
Ultimately, if you are an importer or distributor, owning a private label wine gives you maximum control over the product you sell. This means that you get to take advantage of 4 key benefits including:
Custom Branding:
No one knows your target market better than you do. Until now, you’ve used your local knowledge to scout out wines from around the world that you believe your key demographic would enjoy. Chances are, you’ve based these decisions on the name, the bottle shape, and the label design – as much as the wine itself.
By creating your own private label wine, you are taking the guesswork out of searching for wines you think may appeal. Instead, you have the opportunity to develop the perfect wine brand – complete with name, label, and bottle – that is custom made for your target market.
Ideal Wine:
As a distributor, you can often be encouraged to buy the wine your suppliers want to sell – rather than the wine your local market actually demands. This can leave you with the problem of trying to distribute wine that isn’t popular or needing to educate your market on its merits.
Owning a private label change all this. You can go direct to the winery and choose the exact varietals that your local drinkers enjoy the most - at the exact quality or price point your market demands. This means that now you’ve selected the product and designed your branding, you are now in complete control of the wine you distribute.
Generous Margins:
Now that you’ve selected and branded the wine you are selling, you can set your own price points too. This is because there are no direct competitors to your product – you are the only supplier and distributor don’t forget. This means that there’s no way for savvy buyers to compare prices online and force you into a price war. As a result, you can enjoy far more generous margins compared to importing non-exclusive wines. I would expect wholesale margins of 100%+.
Exclusive Ownership:
By investing in your own private label wine, you are investing in a product you can own and sell for the long term. You are using your expertise to create something that you know you can successfully sell - both now and in the future -in your local market. No one else can replicate your brand, it’s yours, wholly owned by you. This means huge potential for a greater, and more sustainable, market share.
How to pick a good private label supplier:
On the face of it, private label wine supply should be a fairly straightforward matter that any winery could handle – unfortunately this isn’t the reality. If you are not careful about how you choose a winery to partner with, you could potentially experience a variety issue which could destroy your new wine brand - before it’s even had a chance to take off.
So, with that in mind, it’s important you assess any potential supplier by looking at the following areas:
Wine Quality:
This one almost goes without saying. You need to make sure your winery can consistently supply you with quality wine. You should be able to rely on the wine you receive as it forms an essential part of your new private label wine brand. Take the time to ask the supplier how they go about achieving a consistent quality of wine and don’t be afraid to ask them for their track record or testimonials from other buyers.
What’s in it for them?
There are two types of producers who offer private label wine to importers and distributors. The first – which you should avoid – is just trying to quickly offload their existing stock here and now. This means that you probably won’t be able to build a long-term wine brand with their products.
The second type specializes in private label wine production, in fact they have built their business around it. The best private label wineries will work with you to help make your brand a success and have a long-term desire to support you.
Production capability:
The ideal size for a private label winery is somewhere that’s not too big, and not too small either. This means that they should have the production capability to be able to supply your private label wine at scale – so they can keep up with demand based on your newfound success. This also means that you don’t want to deal with a company that is too big as you’ll likely lose the close relationship and personal service you’d experience from a mid-size winery.
Size of Portfolio:
If the winery you choose only produces one varietal of wine, then it doesn’t give you much room for the future expansion of your own private label offerings. You should make sure that your chosen partner not only produces the type of wine you are currently looking for, but also produces others too – think sparkling, small bottles, magnums, bag-in-box…. This means that when you want to target new demographics or market segments with a different private label wine, you can do it quickly thanks to your existing relationship and your private label winery’s varied wine portfolio.
Value for Money:
As a wine distributor, you’ll know better than anyone what your local market can support in terms of price point. With this in mind, it is important to make sure that your chosen winery can provide you with the right wine at the right price. There is no point trying to sell your own private label wine if your supplier can’t offer you great value for money – otherwise, you simply won’t be able to meet your own customer’s expectations on price.
Style of Wine:
Before you take the plunge and put your own private label wine into production, it’s important you do your own research. You should know exactly what style of wine you want to sell to your target market before you choose a private label winery. Are your buyers looking for easy-drinking fruit-driven wines, or would they prefer more traditional tannic wines?
Packaging Options:
The thing that separates one wine from another – and helps it to stand out on a crowded supermarket shelf – is packaging. The best starting point is to ask your supplier for available brands you could own exclusively for your market, and ask them whether they will adjust it for you to meet your needs.
Communication Style:
Because you won’t be on site every day overseeing the production of your private label wine, good communication will be crucial. For you to make sure that your chosen winery is the right fit – even if you’ve visited in person - you should run a few tests: do they pick up the phone when you call? Do they promptly answer your emails? Are they proactive in reaching out to you with questions?
Once you are satisfied that you are able to receive the right level of communication, you should ask them more probing questions about production lead times and minimum order quantities (MOQ). Hopefully by this stage, if everything is to your liking, you should be well on your way to owning your own private label wine and enjoying the success that comes with it.
Final Thoughts
If you are a distributor who is looking to produce your own distinct wine brand for sale in your region, private label wines offer a whole host of benefits that you’ll love.
The private label wine industry has been established for decades and is more popular now than ever, with distributors around the world cashing in on the trend for distinctive and unique wine brands.
The article is written by Nikolas Prehn from Vina Maria who has been offering private label wines since 1928. Their business is now grown to the point where they now sell a bottle of Spanish private label wine every 2 seconds in over 50 countries.
They offer affordable, yet premium quality wines, in a number of varietals including Merlot, Cabernet Sauvignon, Pinot Noir, and Chardonnay, and has now become Spain’s no.1 private label winery.
Are you looking to develop your own private label wine brand, complete with your name, label & bottle? Contact us now.
