The battleground by major supermarkets and the discounters is increasingly being played out on how good their respective private label ranges are. Which for wine opens the door for those suppliers that can help deliver bespoke wine solutions, and new product ideas that allow retailers to control the entire supply chain by using bulk wine from producer to their shelves. Clive Donaldson, wine sourcing manager at Morrisons, explains why
Morrisons’ Clive Donaldson opens London’s first International Bulk Wine & Spirits Show with a text book analysis of what it is major retailers, and operators want from their suppliers when delivering potential private label solutions.
Bulk wine is helping major grocery retailers build and develop more relevant private label ranges for their customers, according to Clive Donaldson, wine sourcing manger for Morrisons, the UK supermarket chain.
Speaking at today’s inaugural London version of the International Bulk Wine & Spirits Show he said it was bulk wine that was now “facilitating” the growth in private label wine ranges and giving retailers their own credible alternatives to branded wines that are arguably more focused and targeted for their particular customer base.
The challenge for wine supermarket buyers and category managers is to choose wines in their range that are best suited to what their customers want to buy. Therefore every wine has to be there for a purpose. If that customer need can be best matched with a branded wine, then that is what they will provide.
“I do not want any duplication in my range. Everything that is there is there I have a very clear reason why,” he said. Which is ultimately to drive greater consumer loyalty to buy their wines through Morrisons.
All about consumer needs
But increasingly a better understanding of their own customer needs, based on their overall grocery shopping behaviour, means major supermarkets are turning more to private label to create wines and styles of wine that are 100% focused and bespoke to what their customers are looking for.
“If we want to make something different then we can bespoke a wine to exactly how we want it,” he added. “We have to have a clear idea of what that product is going to be and trying to do.
If it is going to be a premium own label then it needs to be a wine with good consumer recognition like a Shiraz. Or we could look to take the customer to somewhere new, away from the norm. Guide them to open up their choices. Once we know that we can look around for the best option be it a branded wine or a private label.”
Which is why bulk wine is playing an increasing important role in the sourcing needs of supermarket buyers, he said, as they can identify the right wine, the right style at the best price and then potentially blend a unique wine to match their customers’ expectations.
Take New Zealand Sauvignon Blanc, explained Donaldson. The market is very well served with what he called “homogenous” major branded wines that were all looking to make a certain style of Marlborough Sauvignon Blanc.
The opportunity is therefore there for him and Morrisons to offer their customers something different from what they can get in a branded wine. That’s the beauty of private label and bulk wine. “What occasion the wine is for will influence what it will look like.”
Donaldson was also able to share his personal view on what supermarkets, or major customers, most want from their suppliers.
“If a wine supplier, importer or agency business wants to work with a supermarket like Morrisons then they need to understand exactly how it works and what it needs for its customers.”
Don’t sell to me…but my customer
Too often, he said, wine suppliers are trying to sell to him, or to the “gatekeeper”. “What I think is irrelevant. It’s what my customers think that is important. They need to understand my overall retail strategy, what I am trying to achieve and how you can help us.”
By understanding what it is a Morrisons’ consumer wants, a wine supplier can then help Morrisons create a wine range that delivers that.
Donaldson’s comments will be a wake up call, if they don’t know already, to wine brands that are finding their space on supermarket shelves, particularly in the UK, increasingly at a premium.
After all, said Donaldson, a brand is all about pushing their own credentials and messages to consumers. For a supermarket to build true loyalty with its own customers it has to be able to develop its own point of difference, its own unique voice and private label, driven by bulk wines, is the way they can do that.
It was also a way to ensure that retailers “don’t just end up with the same products on the shelf” and allow them to build individual wine ranges with their own personality and distinct look and feel.
He also questioned the ability of any one supplier to be able to service and fulfil all their needs.
“They will claim they can do everything, but they can’t,” he stressed.
Instead they would be far more productive to identify their own strengths and weaknesses and only look to offer what they now they can do best. Make sure they have the right level of resource to deliver it and make that their point of difference for a group like Morrisons to want to work with them.
All about quality and reliability
Ultimately any supplier has to offer their retail parter complete assurance on quality, reliability, and availability 52 weeks a year. That is where they need to be concentrating their efforts, he said. Where can they be solving a retailer’s problems. That’s the key to good supplier relations.
They also have to “just fit in” to everything else that a complex grocery business like Morrisons is trying to do. Wine is just one category out of all the other sectors in a store. So suppliers need to be flexible enough in the way they work so that they can deliver products in a way that fits into the rest of the way the company works.
He was also quick to challenge any perception that bulk wine is simply an excuse to make and fill retailers’ shelves with cheap wine. “All wine is bulk before it is packaged,” he argued. “Even Château Margaux.”
“Some of our most expensive wine on our shelf is made from bulk,” he said pointing to an old vine Shiraz that is shipped from the McLaren Vale in Australia by flexitank.
But what bulk wine does allow him and Morrisons to do is put some of the best value wines it can find on its shelves. Where every part of the cost has been controlled by the supermarket, at each stage of the supply chain. “It’s what we stand for. It’s who we are as a retailer.”
“Private label is all about managing the full process. Where we can choose every element about the wine.”
He added: “For me it’s like getting a tailored suit. It’s the perfect fit for me and my retail environment.”
Keep on moving…
Ultimately the challenge for the whole industry is to keep moving, adapting and changing their business models to keep ahead of trends. “If you just stay as you today then you won’t be around tomorrow. The consumer is changing all the time.
Wines on its shelf usually, for example, have a shelf life of around three years before it is time to move them on.
He likened the likes of Morrisons and the other major grocery supermarkets as the “large oil tanker” and what it needs is “small speed boats” to help keep them flexible and moving with the times.
So if suppliers, importers and distributors want to get ahead then they understand the needs of their supermarkets, and customers, the needs of their consumers, and they also need to understand their own business better to know what services they can best provide. “And then structure your company accordingly,” he said.