US Insights

Need Wine? Head to the Convenience Store

Catherine Lang


Retail 09.11.2018 / 09:00


Small-format stores are looking to boost basket size with private label wine.

The improving economy is leading discount and convenience shoppers to diversify their consumption behaviors. With expectations of value and lifestyle alignment increasingly integrated in path-to-purchase behaviors, small-format players are looking to boost basket size with private label wine.

In the increasingly cross-shopped retail landscape, discount players Aldi, Lidl, and Trader Joe’s continue to capture share of wallet through their deep-rooted private label loyalty and dedication to holistic value. All have received recognition for their private label wines, reinforcing their ability to excel at driving excitement, loyalty, and relevant product curation within their own brands. “Two-Buck Chuck” is universally associated with Trader Joe’s. Aldi is aiming to build off last year’s European success by bringing its wine advent calendar to the U.S. for the first time, just in time for the holidays. Lidl touts its status as the only U.S. grocery store to have a corporate Master of Wine. Each retailer strengthens its brand identity by emphasizing how it provides value in terms of quality as well as price.

With the success of premium wines seen at discount grocers, 7-Eleven expanded its private label wine earlier this summer for those looking to indulge within their means. In an interesting acquisition play, the retailer took a majority interest in Australia’s leading alcohol delivery service, Tipple, in August. By proxy, the Seven & I corporation now offers door-to-door bottle service in Melbourne and Sydney through this startup, expanding its corporate profile reach beyond its over 600 franchised Australian stores. This move comes nearly two months after the retail convenience leader announced its first premium-label wine, Voyager Point. By building on its Yosemite Road and Trojan Horse private label wines, 7-Eleven is poised to elevate its premium wine experience and grow its wine selection in what is an undoubted move toward expanding demand-driven convenience delivery.

My take: Popping the cork on private label wine

For small-format stores and their suppliers, strategic positioning with wine yields two benefits: the opportunity for incremental growth and the ability to broaden their appeal among Millennials.


With profit margins on the rise, wine is ripe for category growth. Among Millennial primary household shoppers, wine category past four-week penetration was up 1.8 percentage points (to 25%) for the 12 months ending in June 2018, according to ShopperScape® data. Future growth is anticipated as the youngest Millennials age into the category. The National Association of Convenience Stores reports that wine was the only alcoholic beverage to see gross margin growth (albeit only 0.24 percentage points) in 2017, yet it is the lowest driver of sales within the category, falling behind beer and liquor, respectively. Value-rich, premium-tier wines emerge as potential profit drivers within small-format stores as empowered shoppers look to engage in higher-tier indulgence consumption at an attainable price.


Kantar Futures’ 2018 U.S. Monitor reports that 70% of Millennials 21 and older agree or strongly agree that they wish their pace of life would slow down. This sentiment is reflected in how product and service offerings within the discount and convenience channels are evolving to be less based on impulse and more curated to shoppers’ lifestyles and values. As hubs of indulgence, small-format stores are uniquely positioned to address the previously age-divided generational segment, with the youngest Millennials turning 21 this year.

As shoppers are drawn to products increasingly aimed at elevating an experience, curated private label wines emerge as potential profit drivers for retailers, opportunities for broader cross-category solutions and promotions for suppliers, and value-rich indulgences for shoppers looking to treat themselves within their financial means.

Source: Kantar Consulting

Editor's Notes

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