One of the biggest changes in the wine business over the past decade has been the growth in wine departments in grocery stores. Just a decade ago, they were often small and cramped and dirty, and there wasn’t much to choose from – even among the biggest national chains.
Today, they look like this. More, after the jump:
There are many reasons why this happened, but the most important was the emergence of the specialty grocer like Trader Joe’s and Whole Foods. They had well-stocked wine departments, and the national chains and their regional counterparts had to respond or risk losing that more affluent customer. So, today, you can find $100 bottles of wine in your local supermarket.
The irony about all this? That the staple of the new and improved grocery store wine section is not high-end wine or those from smaller, more interesting producers (though, oddly enough, they do seem to carry regional wines). Rather, the mainstays are the dozens and dozens of labels from the world’s biggest producers that have been developed to sell on grocery store shelves. In this, there are even companies, like The Wine Group, that specialize in these wines.
In many ways, the economics of the grocery store wine business are no different than the economics of laundry detergent or ketchup, taking into account local laws and regulations, of course. Wineries pay for shelf space and prominent displays like endcaps (those stacks on the end of an aisle), just like cereal makers. They offer special pricing to retailers, which is reflected in the sales prices in your weekly circular. And there are even loss leaders – wine sold at the retailer’s cost to lure shoppers into the store, just like milk.
Hence a grocery store wine – a brand probably from one of the largest national producers and sold mostly at supermarkets for $8 to $15. It’s usually a varietal, often from California, and has a cute label or a cute name. Though they are simple wines, without a lot complexity, they can be good values.
The other thing about the term? It applies even in those dozen or so states that don’t sell wine in grocery stores, like New York. The concept remains the same, even if the retailer doesn’t.