Why are private label wines trending?
WHY ARE PRIVATE LABEL WINES TRENDING? The current crisis on the global markets has affected the wine industry in countless ways. As competition tightens wine distributors are searching for new ways to maintain, or increase, their profit margins.
At JuicyLab we have seen a surge in interest in our private labelling service from countries such as United States, United Kingdom, Sweden, Japan, Germany and Switzerland. Nations that are all famous for being highly competitive wine markets. If the trend continues we predict the percentage of private label wines in the market will increase with roughly 15 percent (year 2020) and 10 percent (year 2021) in all developed wine markets.
Find below the three major resons in 2020 why wine distributors are considering to create their first own brands.
Are you sure you even want to create a private label wine?
First ask yourself why. It’s easy to get caught up in the private label trend and start to create brands without even having the fundamentals in place. The first thing you need to decide is why you are doing it. The three most common answers to this question are:
1. To create a unique offer for your clients
One of the main points for companies as diverse as Costco, Berry Brothers and Rudd and Naked Wines is to offer a unique experience for its customers. The future belongs to companies with definition in their portfolio, companies that are selling unique wines. The end-goal is to force (very gently) clients to come to their shop, because their loved wines are nowhere ells to be found.
2. To increase the profitability of your portfolio
One of the key challenges in the wine business are the low margins. While companies such as Apple can have 64% margins on the iPhone, a wine distributor might have to survive with 8 to 25 percent margins, depending on the region. The only way to get those numbers rising (and still have happy customers) is by creating your own label.
3. To decrease the amount of risk in your company
Wineries change distributors all the time signifying a substantial risk for the distributor. The only way to lower this risk is to implement a few private labels in your portfolio, brands that one-one ells but you decide over. None will be able to touch your brands, and you will always be the one deciding the final price of your brand.
Cheers for a new beginning!