Retailers' own labels overtaking branded wines
It’s a “scary” time for wine brands as supermarkets’ own versions are leaving them out in the cold, say experts.
Brands have to change their approach and offer a point of difference in order to appeal to retailers - that’s the message from suppliers and branding experts.
Nick Bauer, co-director of Free Run wines, which has Spanish brand Vina Albali in its portfolio alongside own and exclusive label wines, said: “The is the scary bit - some of the supermarkets have created soft brands that look like they are ‘proper brands’ with heritage and a big story behind them, when they have in fact manufactured it.”
He said suppliers now had to “find something they [the retailers] can’t do direct, that they want you for - the added value you bring to the product”.
The other “scary” fact, said Bauer, is that own labels give retailers the freedom of controlling the liquid that goes into the brand, allowing them to switch one supplier for another if prices go up.
Nik Schritz, managing director of Reh Kendermann, which makes the German Black Tower range, said: “There is more pressure on brands. We have to be innovative and have a strong brand which is attractive to consumers. We try to do that by keeping our price competitive, maintaining the quality of the wine and innovating with packaging.”
Steve Mosey, head of BWS at Morrison’s, said that while brands are “important” and “remove risk” for consumer, own brand could “play a very similar part”. But he added that “some customers would prefer not to have a retailer brand and that is where exclusives can play a part, but I think they need to be treated and supported as brands and not simply tertiary labels”.
He admitted that Morrisons is “some way behind the other major multiples in terms of the scale of our own brand”, but said the firm was “putting a lot of resource into increasing our own brand share” and had increased its own-label range by around 15% in the last year and exclusives by 22%.
“Ultimately every product needs to justify itself in terms of its role in the range and its rate of sale and there is clearly a role for all three elements of the mix but it’s critical that they don’t add to what can already be a confusing category,” said Mosey.
For more on this story, and a full analysis of how own-label and exclusives are performing against brands, see this week's issue of Harpers.