• How Oddbins works with E&J Gallo to drive up California

    Most major wine producing countries or regions would be more than happy to have an average price point of around £10 to £15 a bottle, never mind the giddy heights of £20 plus. But for premium Californian wineries, £20 is not too far off what they might see as being their entry price positioning. Which is good news for major retailers such as Oddbins who are now working closely with major branded players, particularly E&J Gallo Winery and its new, extended Californian and US premium wine range, to bring both excitement and new wines to its portfolio which is helping it see real growth between £20 to £40.

    Most major wine producing countries or regions would be more than happy to have an average price point of around £10 to £15 a bottle, never mind the giddy heights of £20 plus. But for premium Californian wineries, £20 is not too far off what they might see as being their entry price positioning. Which is good news for major retailers such as Oddbins who are now working closely with major branded players, particularly E&J Gallo Winery and its new, extended Californian and US premium wine range, to bring both excitement and new wines to its portfolio which is helping it see real growth between £20 to £40.

    mm By October 19, 2018
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    Oddbins’s wine buyer, Jenny Nicole Smith, explains how more premium branded wines are giving its customers more confidence about trading up with Californian wines and why it is keen to work with major players, such as E&J Gallo Winery, now that they have a much wider, deeper and interesting premium wine portfolio to work with.

    How are your US and Californian wine sales going?

    Oddbins' Jenny Smith
    Oddbins’ Jenny Smith

    In previous years wines from the US have accounted for a small overall share of our range, however, the limited selection of SKUs garnered a healthy demand. Each year we focus on building a category and last year all signs pointed to the US – particularly following the subsequent difficult harvests in Europe, increasing interest from consumers for New World wines and the ABC trend finally dissipating. We went ‘all in’ and partnered with a handful of new producers to ship directly, adding just shy of 35 new listings, mainly from California as well as Washington State and Oregon with prices ranging from £12.00 to £100.00. The result thus far has been very encouraging, sales grown at +55% percent, the sweet spot sitting around £20.00.

    What trends are you able to pick out in terms of styles of wine being bought from California?

    Chardonnay has very much resurfaced, occupying three of the top five SKUs in the Californian range. Stylistically we are seeing a more judicious use of oak and full malo has been scaled back, offering fresher, delicately oaked styles that are being well received. However, that is not to say that this replaces richly oaked more decadent styles  – while these don’t prove as popular amongst critics, many of our customer enjoy this style.

    California Cabernet continues to be a brand in and itself and there is more recognition of region-specific wines garnering a distinct reputation. This includes cooler climate Pinot Noirs and Chardonnays from coastal regions and the likes of Santa Barbara are increasingly popular.

    Perhaps the most exciting is the experimentation with new varietals. Some of strongest performers are wines you may not associate with California, a 12.5% savoury Chenin Blanc from Santa Ynez Valley, a honeyed Verdejo from Dunnigan Hills or a velvety Spanish red blend from old vines in the Yolo County. There is so much to be excited about in the entry premium to premium price point. 

    What would you say the average customers’ understanding and perception of Californian wine is?

    I think most customers are more likely to recall a distinct brand rather than a region when it comes to California. The perception is also polarised between high volume entry brands and super premium cult status wines.  At the premium end ‘Napa Cabernet’ is the strongest example of a regional/varietal brand that resonates with most consumers. Ultimately California needs to further develop these intrinsic connections between varietals, styles and AVAs.

    Oddbins sees brands as being a key driver for California and is working with Gallo's extended premium US wine selection
    Oddbins sees brands as being a key driver for California and is working with Gallo’s extended premium US wine selection

    In terms of premium California – what price point would you put that at? 

    Like any region, this is relative. The cult status Napa Valley Cabernet’s and wines from top producer’s that demand sky high prices, elevate the overall context of premium within California.  Our entry wines from California sit at £12 – £20. This would be considered premium for many regions, however, for California is it not. Interestingly, despite offering wines at the ‘entry’ point these are not the wines that are driving growth in the category. It is the £20 to £40 bracket that is gaining the most traction, which I would consider entry premium/premium in the context of California.

    How do you get customers more engaged with California’s premium wine range?

    Our new California range, focuses a breadth of regions and varietals, the goal is to broaden consumer perception of the wines and distinct regions of California which is facilitated by very involved staff training, consumer tastings in stores and most recently a full six week focus on the wines of California. Through this we have seen a significant uplift in sales which has continued post promotional focus.

    How are you working with E&J Gallo Winery?

    They approached us with its new premium portfolio earlier this year, which is a departure from high-volume branded wines at the entry end of the market. The new portfolio represents estate wines, smaller scale production with the benefit of strong branding. We have taken on two different producers, one at the mid-range and one at the premium end.

    Why did you list those wines in particular? 

    Columbia Winery is working really well for Oddbins
    Columbia Winery is working really well for Oddbins

    Colombia Winery in Washington State offers phenomenal value for the price point, and most importantly it is not a generic mass volume product, despite the competitive pricing. We are taking a lovely rich Merlot and a modestly oaked Chardonnay duo, the wines are a great representation of the region’s style and offer a great introduction.  We are also taking a selection of Orin Swift wines, made by Dave Phinney – these are your quintessential, unashamedly bold California wines with labels that are perhaps even more bold. They occupy a unique space in the range, you cannot miss them, and they spark conversation – these have been very well received by customers and staff. 

    Are their advantages of working with a major wine business like E& J Gallo Winery? 

    The Orin Swift Slander Pinot Noir 2016 is one of the new E&J Gallo Winery wines that Oddbins is stocking with a retail price of £45.
    The Orin Swift Slander Pinot Noir 2016 is one of the new E&J Gallo Winery wines that Oddbins is stocking with a retail price of £45.

    At Oddbins 65% of our range is imported directly, however, there has been a benefit to working with E&J Gallo Winery on these listings. The wines that we have taken are very competitively priced and offer great value, a benefit of their scale. There is also the added benefit of being able to react quickly on stock depletions and sales requirements.  There is also a great resource in terms of expertise and therefore suitable for staff training which is very valuable to us.

     

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