Library Release - Selection and Differentiation in Grocery Wine w/ Curtis Mann MW, Albertson’s

Grocery stores are one of the biggest sales channels for wine. Curtis Mann, Group Vice President of Alcohol of the Albertson’s Companies, gives us the inside scoop on buying trends, how to sell into Albertson’s, and the rise of the use of digital. Learn about the dynamics of the grocery wine market and what makes Albertson’s “locally great, nationally strong.”

Detailed Show Notes: 

Grocery as part of the wine market

• Multi-outlet wine market ~$12-13B / year
• Total wine market ~$60-70B / year (multi-outlet ~20% of the total market)

Albertson's Companies' wine overview

• ~25 different grocery brands, ~2,000 stores
• Wine is a key element of business - it drives sales and customer loyalty, some customers come to stores because of the wine selection
• Some stores have up to 3,000 wine SKUs
• Stores with more premium selections are correlated with location (high socio-economic demographics) vs. grocery store brand
• The focus is more on the “premium” price segment ($9+ based on IRI)
• Top brands - Barefoot, Kendall Jackson, up-and-coming brands - Butterl Josh, but wine is very diversified, big brands are still a small part of the market
• Premiumization helping imports, including New Zealand Sauvignon Blanc

Wine buying trends

• Consumers are called to authenticity - they want to know what’s in their wine, the appellation, sustainability, and organic
• Convenience - cans, seltzer, ready to drink 
• Premiumization - $10-20/bottle, $30-50/bottle, up to $100/bottle (e.g., high-end Bordeaux, Napa Cabernet) ranges all doing well, some categories accelerating with potential out-of-stocks

Wine customer demographics

• Gen X & Baby Boomers - still buying a lot (more in bulk and volume), but less than before
• Millennials are the new customers - buying more, less loyal to wine vs. other drinks, and have less expendable income; their preferences are different from Gen X and Baby Boomers
• To meet the changing demographics, Curtis looks forward 3-5 years to develop his shelf set/selections of wine

Promotions/discounting

• Limited brand loyalty in wine, customers often default to price
• Promotions are very important
• Need to work between price and product to optimize sales and not over-rely on price

Wine selection

• What does it mean to customers? Each wine must have a purpose vs. the other ~1,500 SKUs on the shelf
• Tagline - ‘locally great, nationally strong’; try to give local stores more voice (e.g., Portland stores have more Willamette Valley Pinot Noirs)
• Flagship Stores (e.g., Andronico’s, Pavilions) - higher-end, eclectic offerings
• Steps to sell into Alberston’s - have the 4 P’s put together - distribution network, pricing, product, and where you fit on the shelf
• Generally need to place wine 4-6 months in advance
• Needs a UPC code on the bottle

Private Label/“Own Brand” wines

• The goal is to provide the best price to value for customers
• The intent is to drive loyalty
• Not a dominant part of the business
• Trying to create wines that are a draw and get good scores
• Selection is built around education, the desire to learn about the wine category through own brands
• Suppliers have connections to maintain supply, which can help Own Brands overcome supply challenges (e.g., 2020 Napa, 2021 New Zealand)

Core elements of success for the grocery channel

• The selection keeps people in the store
• Relating the wine to the food in the store (food-wine pairing)
• E-commerce
• Convenience (e.g., ready to drinks)

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