7-Eleven Inc., the company that “invented” private-label in the conveniencestore space with its now-famous Slurpee and Big Gulp brands (among others),has taken private brands to the next level with its own wine label: ThousandOaks Vineyards. Next month, the world’s largest convenience store chain willdebut three varietal selectionsCabernet Sauvignon, Chardonnay and Merlotin many of its 5,800 stores in the U.S. and Canada.
The Dallas-based company is no stranger to getting inventive with alcoholic beverages; in 2003 the company introduced its own “branded” beer under the Santiago label. But 7-Eleven is also intimately familiar with the wine segment, having tapped into a fast-growing trend in 1998 by introducing a wide assortment of popular wines in the $5 to $10 price range. It’s following a similar pricing strategy with Thousand Oaks; the company has assigned the brand an SRP of $6.99 per 750ml bottle. Philadelphia-based KDM Global Partners LLC assembled the program and is supplying the wine nationally.
While many supermarket retailersincluding Albertsons and Trader Joe’shavelaunched private wine brands, 7-Eleven’s investment is “hard evidence” thatprivate-label wines are viable in the convenience store channel, according toJonathan Gelula, president of KDM Global Partners (www.kdmglobalpartners.com).
“Every convenience store should take a cue from them,” says Gelula, who’s been in the wine business for half a decade. “The objective with private-label is to help grow the overall category as well as growing the brand itself.
“For Thousand Oaks’ packaging,” he continues, “7-Eleven has a very ‘approachable,’ consumer-friendly label, and in the ‘under $10′ price category customers are easily converted. And as with all private-label brands, one of the attractive things is the higher retail margin than that earned on someone else’s brand. Most importantly, this is a wine not available anywhere but at a 7-Eleven retail location.”
Unlike other private-label wine purveyors, KDM is not a winery-looking to shed excess inventory or a middleman buying excess inventories from larger vintners. Instead, KDM partners with producers in the U.S. and abroad to create custom wines (both value-priced and high-end) for retail chains, restaurants, affinity groups and hospitality organizations.
“We partner with our wineries,” Gelula says. “We’ll work thinner, and [theproducer] will work thinner; the end result is superior wine with superior consistencyand better margins for the stores with great ongoing service.”