64
Beverage Media
October 2012
INDUSTRY
WATCH
tail chains, and even the Pennsylvania
Liquor Control Board. Coastal produces
Cabernet Sauvignon, Chardonnay, Pi-
not Grigio, Pinot Noir and blends, sourc-
ing grapes from California and interna-
tionally. (Coastal now ships imported
wine in bulk to their bottling facility
in California; “It’s far more economical
to bring in the wine already made and
bottle it here,” says Ferguson.) Coastal’s
minimum (typically 20,000 cases) has
kept most restaurants and smaller re-
tail operations away. “We haven’t en-
gaged with restaurants simply because
of volume,” says Ferguson. “They tend
to be less concentrated than larger re-
tail chains and the distribution piece
poses difficulties.”
But market conditions and supplier
flexibility are now making private la-
bels a more attractive and feasible op-
tion for smaller outlets, both on- and
off-premise.
Based in Novato, CA, Winery Ex-
change has been in the private label
business for liquor and wine since 2001.
They handle the entire process, from
winemaking to label design and distri-
bution. Although they work mainly
with large retailers (e.g., Kroger, Tesco,
Whole Foods), they’ve responded to
increased interest from smaller retailers.
“
We know there are smaller stores that
want to benefit from the margins from
private labels so we created brands that
can be sold in just a few states rather
than all 50 states,” says Public Relations
Manager Jennifer Verdon. Since 2010
Winery Exchange has shipped 43,200
cases of wine under their Regional Ex-
clusive Brand program.
K&L Wine Company, which has
three stores in California, offers direct
imports under their K&L label. New
York City retailer Sherry-Lehmann cre-
ated a private label red wine from the
Rhône Valley with Georges Duboeuf.
Pasanella & Sons, a retail shop in New
York City, imports 2,000 cases a year of
three Italian wines under the Pasanella
&
Figlio label (white, red and
rosato
,
line-priced at SRP $10.99) and will
have a sparkling wine available in late
2012 (
$12.99). Owner Marco Pasanella
says one challenging part of the private
label business is estimating quantities:
“
We are only nervous about rosé—if
you get too much white or red you can
sell it the next year.” Pasanella adds, “I
don’t know if private label would have
existed at my level ten years ago,” and
that smaller wine shops should be
ready for some challenges with the laws
around alcohol. “It’s a huge amount of
jumping through hoops, particularly in
New York.”
Meet the New House Wine
One happy result of America’s maturing
wine culture is that “house wine” no
longer has a negative connotation. With
private labels, restaurants are able to
offer quality and value for the customer
while usually increasing the bottom line
and promoting their own brand identity.
Napa Valley–based Rutherford Wine
Company (producers of Round Hill and
other brands) is the quiet leader in the
field, having done a robust private label
business for decades; their 300+ clients
are primarily hotels, restaurants and
private clubs.
P.F. Chang’s launched their Vineyard
518
label in May 2010 with 8,000
cases of Sauvignon Blanc and Syrah.
Beverage Director Mary Melton helped
select the wines and chose an unusual
sourcing strategy. Working with Wattle
Creek Winery in Sonoma, they created
With today’s efficiencies in both
winemaking and packaging, private
labels blend right in on retail
shelves. Pictured here: two brands
created by Winery Exchange.
PRIVATE WINE LABELS PRESENT UNIQUE
CHALLENGES FOR MERCHANTS. ‘IT’S A HUGE
AMOUNT OF JUMPING THROUGH HOOPS,’
SAYS ONE NEW YORK RETAILER ABOUT THE
LEGAL ISSUES.
