Retailers to uncork holidays with value-priced wines
Affordable in-home dining and entertaining will be the trend this holiday season, and consumers will be more willing to open their wallets for affordable indulgences in wine and spirits to help them celebrate.
A recent survey from Information Resources Inc, revealed that 90% of consumers expect to spend no more than $200 on beer, wine and spirits this holiday season. That’s good news since it’s a 25% increase from the $150 to $175 consumers said they were willing to spend last year.
It also might mean that consumers will be willing to pay a bit more for their wines this holiday season. “Consumers are likely to tread lightly back into higher-priced brands,” said IRI’s consulting and innovation president Thom Blischok. Blishok cautioned that consumers looking for deals and sharp-priced wines will drive most of the business this season.
As budget-conscious consumers have shifted more of their everyday wine purchases to value-priced wines, sales of California wines to the U.S. market were up 2% in volume in 2008 over the previous year, according to the Wine Institute.
The under-$5 glass bottle and under-$2 box wines make up nearly 50% of the drug channel dollars for the category and close to 75% of its volume sales, according to Dan Wandel, SVP and beverage alcohol expert at IRI. “These economy-priced items continue to do well in drug stores, with growth rates that outpace the food outlet,” he said. “Expect these to continue to be strong in this channel for the holidays.”
Consumers might spend a bit more during the holidays. Wandel said that $8 and $10.99 glass and $2-plus premium box table wine posted double-digit growth in the drug channel for the 52 weeks ended Aug. 9, 2009. This price point should do well during the holiday season given the continued strong performance the segment had in the channel over the past year.
Wandel said that while major varietals like chardonnay continue to perform well in the drug channel and contribute significant sales growth to the category, retailers can expect strong performance from pinot grigio/pinot gris, pinot noir, red blends/meritage and nonvarietal sangria during the upcoming holidays. “These varietals are growing double-digit this past year and have not lost momentum over the latest quarter,” he said.
Consumers have been more willing to try other varietals such as riesling and petite sirah, according to the Wine Institute. “Another flavor to watch in the drug channel this holiday season is white zinfandel, which did well last year,” Wandel said. “It continues to post increases in the drug outlet despite showing declines in total U.S. food.”
As the holiday season approaches, retailers will be promoting wines more heavily. IRI’s Blischok said drug retailers could merchandise wines, sparkling juices and mixers on an endcap to maximize sales. CVS is giving wine a big push at one Washington, D.C., location.
The 12-ft. wine section features domestic and imported wines featuring many wines on special. Banners announcing weekly wine specials are placed in store windows, and an endcap featuring Gray Fox Vineyards white zinfandel, cabernet sauvignon and chardonnay priced three for $10 shared space with an Italian label Villa Costa pinot grigio for $9.99.
The store also advertises a “Good wine. Good friends. Good deal.” — a promotion offering a 10% discount when the customer purchases six or more 750 ml bottles of wine. That’s a promotion that’s sure to get consumers’ attention heading into the holiday season.
Actavis goes up for sale, peaks interest of major Rx companies
NEW YORK Icelandic generic drug maker Actavis is for sale and could go for up to $10.8 billion at a time when many generic drug companies find themselves targets of acquisitions.
The fifth largest maker of generic drugs in the world, Actavis became a private company in 2007 after action by majority stakeholder Novator, led by Icelandic billionaire Thor Bjorgolfsson.
According to Reuters, a number of large drug makers could end up buying the company, including Pfizer, Sanofi-Aventis, GlaxoSmithKline and Novartis.
In other news, the Food and Drug Administration announced Friday that it had filed a consent decree and was awaiting the United States District Court for the District of New Jersey’s entry of a permanent injunction forbidding Actavis’ U.S. subsidiary, Actavis Totowa, from manufacturing drugs in its New Jersey factories until the FDA decides the factories are in compliance with current good-manufacturing practice requirements.
Winn-Dixie opens prototype store with expanded grocery departments, pharmacy
JACKSONVILLE, Fla. Winn-Dixie Stores on Wednesday opened a prototype store in its existing SaveRite location here featuring everyday low pricing on thousands of items a la Walmart, as well as monthly locked-in specials and special price-drop items in a warehouse format.
“In designing this concept, we spent a great deal of time reviewing our customers’ shopping preferences,” said Dan Portnoy, Winn-Dixie chief merchandising and marketing officer. “We wanted to make sure that the new store would be a true fit for the neighborhoods it serves. … We focused only on those items and services that were most important to our customers, and, as a result, we were able to aggressively cut costs and lower prices throughout the store.”
In addition to enhanced produce and meat departments, the 48,000-square-foot store also has an in-store pharmacy where customers will find 30-day supplies of more than 400 generic drugs for only $3.98 every day. Other features include newly designed warehouse-style shopping carts and popular staple items available for purchase by the case.
SaveRite closed the store Jan. 6, allowing time for associates to work through the afternoon and evening to lower thousands of prices. The company welcomed area leaders and residents to a preview on Tuesday evening where SaveRite donated $5,000 to Paxon Improvement Association. To celebrate the store’s new format, SaveRite will also host a Family Fun Event on Jan. 10.