Wine sales in supermarkets have climbed to over $10bn, according to Nielsen point of sale data for the 52 weeks ending Dec. 24, 2016.
“The supermarket is quickly becoming the place to buy wine,” Sharoff told BeverageDaily.
He said the current US grocery landscape looks much different than it did prior to the late 1990s when the majority of Americans did their shopping at traditional, local supermarkets.
“The smaller traditional supermarket has been giving away to Whole Foods at the upper end and at the lower end, Aldi and Lidl,” Sharoff said.
“As those retailers have become more popular and have gotten more share of the supermarket industry, one of the things that has happened is that more consumers have discovered the wine.”
The consumers picking up wine at the grocery store represent a much broader segment of shoppers, who are more likely to purchase a wine based on a name they trust rather than a Wine Spectator score, added Sharoff.
“When you shift to supermarket, a lot of the characterizations of wine drinkers no longer apply,” he said.
“Wine is becoming a traffic builder for those leaders who can develop first-class, high-quality wines. Wine is becoming the way in which you say to the consumer ‘come to my store, we’re special’.”
Transparency of wine labels varies by retailers with Trader Joe’s clearly identifying its wine as store brand on its labels, whereas Whole Foods’ Three Wishes wine does not feature the retailer’s name.
However, Sharoff said retailers should not shy away from using the store name on its wine products as many consumers want a name they can “trust” such as Costco’s Kirkland.
“It’s [private label wine] for the people who go in and see 37 different brands of Chardonnay, and they only know the word ‘Chardonnay’…they know nothing about the various brands, but because they trust Kirkland, they’re going to buy ‘Kirkland Chardonnay’,” Sharoff said.
Recognition of private label wine
Retailers’ private label wines have also been gaining global attention recently. Lidl, for example, won 101 medals at the International Wine Competition in Los Angeles earlier this year, while 391 private label supermarket wines received medals at the International Wine Challenge held in London.
In addition, PLMA’s International Salute to Excellence Wine Awards held this year in Amsterdam will feature wine connoisseurs tasting and evaluating various private label wines.
The point of PLMA’s international wine event is not to compare winery wine with supermarket wines, but rather determine “which supermarkets are doing the best job of creating the best wines,” Sharoff said.