The wine selection in grocery stores has never been better, and we're just not talking about high-end and speciality grocers like Whole Foods and Trader Joe's. Many of the biggest national chains have beefed up their wine departments over the past several years, using wine to better compete with warehouse clubs like Sam's and Costco.
In this, the national grocers are taking advantage of the recession to offer brands that used to be sold only in wine and liquor stores. Producers and distributors, faced with reduced demand from their traditional retail and restaurant customers, have lots of wine to sell, and so are selling it to supermarkets that they never would have sold to before.
In addition, grocers have noticed two things abut wine: Its increasing popularity among the U.S. public in general, and that many wine drinkers come from an upscale demographic that they want to attract. Hence, the national chains are adding shelf space, holding wine tastings, and even putting in wine rooms with $100 wines in their stores. More, after the jump:
Walk through your local national chain, and you'll see what Graham means. Wine has its own aisle -- or more -- now, and the selection is two or three times what it used to be. There are shelf-talkers and special displays, and in many cases, the grocery store aisle looks like a mini-wine store.
All this effort is what the experts call a "point of differentiation" -- you're more likely to shop your local Kroger or Safeway if it has something you can't get at the warehouse store. Warehouse stores do a great job selling cases of wine (and even expensive cases of wine), but they can't do as a good a job as a local grocer in selling wine to go with dinner, especially when the other ingredients for dinner are in the next aisle.
One caveat: Not every supermarket location, even within the same chain, has made the same investment in wine (and local law prohibits many grocers from selling wine). Typically, the upgraded wine stores are in urban, more affluent and more wine-centric markets. That's why my Kroger, near one of Dallas' priciest suburbs, has better wine offerings than another Kroger a couple of miles away, which is in a more working class neighborhood.
"The challenge for grocery stores is that they sell such a variety of categories they inevitably will open stores in areas that do not have great wine potential," says Graham. "It may still be a good store, but the consumers are just not that interested in wine -- they want other things in the store. So the challenge becomes how to have a comprehensive wine program when you have stores that have far different potential to sell wine."
Still, Graham thinks grocers, despite the progress they've made, can do a better job with wine. He sees social media and the social media generations -- the two groups younger than the Baby Boomers -- as the key. These demographics use Facebook, Twitter, and the like, to make purchasing decisions in a way the Boomers don't. In addition, they see grocery stores as more legitimate wine retailers than older consumers, who still tend to think of supermarkets as where old ladies with cats buy pink boxed wine.
So supermarkets should use social media to educate and inform, bypassing the traditional sources of wine information, he says.
"That is where the opportunity to talk directly to consumers through social media could have real power," says Graham. "Much more effective targeting is possible, and if you’re smart about fulfillment, you can have centralized inventory and just ship to the stores for pickup. The model of ordering online and picking up in store is gaining traction in other categories, so why not wine?"