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.”

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Detailed Show Notes: 

• Curtis’ background
  • MBA at UC Davis in Wine Marketing and Accounting
  • Marketing at Trinchero Family Estates
  • Worked in wine retail at a small place
  • Moved to IRI in category management in wine and spirits insights
  • Was Raley’s wine buyer for 8 years
• 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. by grocery store brand
  • Focus is more on the “premium” price segment ($9+ based on IRI)
  • Top brands - Barefoot, Kendall Jackson, up-and-coming brands - Butter, 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
  • Covid trends - return to cooking, consumers go to Albertson’s as a one-stop-shop
  • With restaurants reopening, a little bit of regression in sales, but still robust as cooking at home has been sticky
• Customer demographics (for wine)
  • 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
  • Considerable diversity of reasons people buy wine - occasion based purchasing (e.g., going to a party)
  • Many people exploring and learning about wine (proof point - the massive increase in people taking WSET classes, including lots of consumers, not just professionals)
• Promotions / discounting
  • Limited brand loyalty in wine, customers often default to price
  • Given that, promotions are pretty important
  • We 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
    • This could be style, story, or location/appellation
    • Want to remove redundancy 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
    • It requires 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, desire to learn about 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)
• Digital Adoption
  • Virtual tastings - have done well, 1,000s of people sign up, people buy the wines beforehand or buy wines later and watch the tasting on YouTube
    • Appeals to groups of customers who don’t get to visit wine country
    • Will continue post-Covid
    • Do education tastings 1x/month
  • Keys to engagement - consumers have lots of questions
    • The team engages with customers via chat
    • Keep it educational - need a balance of explaining concepts but keep it understandable
  • Consumers using their phones more for education want to reduce the complexity of wine
  • Wine e-commerce - working on expanding this, challenging due to state regulations
    • Expanding drive up and go (“DOAG”)
    • Delivery (e.g. - Instacart) growing
    • Still a small portion of sales
  • 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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