How do supermarkets choose the wines they sell?

You may look down at supermarket own-label wines as bargain-basement products for people with no sense of adventure. But the big buyers seem committed to raising their game, reports Joanne Simon.According to ACNielsen, the international data research group, wine sales grew by 11% across national grocery chains last year. The question is: are supermarkets giving shoppers with a bit of money, but little knowledge when it comes to wine, a fair taste of the grape? And are they catering for those of us who do appreciate good wine and are always on the look-out for something special - and a special deal? Or is it all about profits, margins and volumes, with the wine department having become a department like any other?

In general there are two categories of supermarket "house brands". The first comprises the entry-level private labels, whether packaged in box or glass, such as Pick 'n Pay's No Name brand (made at Robertson Winery), Checkers' Just and Oak Ridge ranges (producers not disclosed), Spar's Carnival and Country Cellars ranges (produced at Oranjerivier Wine Cellars, except for grape varieties not grown in the region), Woolworths' cask wines (Simonsvlei), "Zesties" (Bergsig Estate) and Concept range (Fransch-hoek Vineyards), and Makro's Mont d'Or (Van Loveren), Misty Mountain (Bon Courage) and Babbling Brook, Thomas Kipling and Cellar Release ranges (from various producers, as national wine buyer Carolyn Barton explains: "We choose the best quality for the best price, or we use these labels when offered a really good deal from a farm which doesn't want its name on the label").

Nobody would claim that these are the best wines in the world - Stephanus Eksteen, national wine buyer for Checkers, probably the country's biggest seller of own-label wines by volume, describes them as "accessible, easy-drinking wines that offer excellent value for money and supplement the extensive choice of [producer-labelled] super and ultra-premium wines available in Checkers and Shoprite supermarkets countrywide".

However, he insists these wines are not just for beginners: "The target audience comprises people who are fairly confident about wine, see it as an everyday commodity and not only for special occasions, and who are at the same time price-conscious."

The wines also serve an important purpose for the supermarkets: "They confine the customer to you," explains Chris Grobler, Pick 'n Pay's national co-ordinating wine buyer. "If you like our No Name brand red wine, for example, you can't go and buy it at Checkers."

Woolworths wine selection manager and Cape Wine Master Allan Mullins agrees: "In a survey last year, we found that people buy our everyday wines because they're Woolies wines, not because they're made at Bergsig or Simonsvlei. It's easy to go to Neil Ellis and snap up some top-end wine; the real challenge is getting quality and consistency in our everyday wines. We are judged by what we do with those wines."

For this reason, Mullins personally oversees the blending of around 90% of Woolies' wines. At Checkers, meanwhile, Eksteen says the blending of Oak Ridge and Just is undertaken by "one of South Africa's most high-profile wine personalities". To further ensure consistency of style, both he and Mullins insist on remaining loyal to their suppliers "for as long as they offer the required quality in the quantities we need. We don't change suppliers simply because some producer comes up with a lower price".
At the moment, of course, an oversupply of (red) wine means there are exceedingly good deals to be had. "We are able to allow consumers to benefit while still achieving acceptable margins," as Eksteen puts it. "However, we are not in the business of buying up leftovers in cellars at rock-bottom prices - mopping up, if you can call it that - for the simple reason that consumers expect a particular brand to be of a consistent quality and offer a constant taste spectrum."

Ray Edwards, group liquor manager at Spar, agrees: "We won't take leftovers. If they're leftovers, there's a reason for that. Either the guy couldn't sell it himself, or there's a chemical problem or an overproduction problem. I want our clients to be certain that what Spar puts in the bottle is customised for them."

Barton also insists that she doesn't "mop up" … except at higher price points. Which takes us up a notch or three in quality to the supermarkets' confined labels, which currently include nine wines in the Oddbins range at Checkers (limited editions sourced directly from estates and private cellars and marketed under anonymous bin numbers); six wines made exclusively for Pick 'n Pay as part of a premium wine promotion; the extensive Reserve, Limited Release and Classic ranges at Woolworths; Spar's top-end Country Cellars wines (such as a limited release red Bordeaux blend made exclusively for Spar by Spier, to be launched later this year) plus any "leftovers" Edwards comes across at highly reputed producers, which will be bottled under the winery's own label and sold as a special release; and Makro's Private Reserve wines, which carry the farm's branding but also a sticker indicating that the wines aren't available anywhere else.

"Most of the wines are actually planned well in advance to make sure that there is a gap for that varietal or blend or price point in the range," says Barton, who points out that some have been part of Makro's wine offering for over five years - such as the chain's biggest-selling private label, Truter's Reserve, a Cabernet Sauvignon/Merlot blend made by Beyers Truter (R36). Others are one-offs which Barton describes as small batches of really exciting wines that might otherwise be lost to the greater wine-loving public. "The one-offs tend to be a batch of something special that the winemaker has made, but the volume is too small for them to include into their standard range, or it might be for one vintage only. These wines are fun for me to buy and for the store personnel to sell - a new story and normally super value, which really keeps the customers interested."

She recently snapped up the 2005 vintage of a new Flagstone wine called The Field Day, which is a wooded blend of 85% Pinot Blanc with Sauvignon Blanc, Semillon, Riesling and Chardonnay. "It's really something special and a steal at R24.90." Then there's the Syrah/Cabernet Sauvignon 2002 from Boekenhoutskloof, labelled under the Porcupine Ridge Syrah Collection. "We bought all 25 barrels of this wine and it's gorgeous, selling for R59.90."

Eksteen, too, is always on the lookout for "special finds" at highly reputed producers. "Recently we had the opportunity to buy what was left of the Cabernet used in one of the most exclusive local blends. Such a wine goes into the Oddbins range and gets a special number - in this case 219 - selling at a price one-fifth of the blend in which it appears. It's a way of creating excitement for consumers, selling a wine at way below the asking price when sold under its own label. To give it an air of mystery, we never divulge the name of the estate the wine comes from, but the knowledgeable wine lover should have no problem guessing its origin…"
In this case, as it happens, the producer was proud to go public about the deal. The exclusive blend concerned? De Toren Fusion V, no less!

In sourcing premium-wine exclusives for Pick 'n Pay, which claims to account for 62% of all supermarket wine sales in South Africa (a figure vigorously disputed by other retailers), Grobler is joined by food and wine specialist Michael Olivier in visiting wineries twice a week. "It's important to build relationships so that you can get down the stairs into those cellars," Grobler explains.

"Sometimes," adds Olivier, "we really have to winkle it out of the winemakers, asking 'Surely you've got a special little tank somewhere?' Invariably they do have something they're really proud of that they'll just end up blending into a dry white or something."

He cites the example of a Verdelho made by Johan Malan at Simonsig. "He showed me this wine and it just screamed sushi at me."

Another Pick 'n Pay exclusive is the Raka Anchorage 2002. "Piet Dreyer's five-varietal blend Quinary is one of the most exciting, best-value Bordeaux blends around," says Olivier. "This is the same blend but made with some bought-in fruit, so where Quinary costs R86, this is R39! Needless to say we bought the whole consignment from him…"

He and Grobler say they will continue looking for these "interesting exclusives", insisting on letting the producer's brand shine. "We're often contacted by well-known producers asking us to take 15-20 000 bottles, but without their name on the label. We don't want that. Imagine if Chateau Margaux came along and said we've got 20 000 bottles for you but you can't use our name. How would we, knowing how sensational the wine is, tell our customers about it?"

This is at least partly why wine became the first product to feature the producer's name at Woolworths, where everything was (and mostly still is) own-label. "The original Mystery Wines range, using various suppliers, didn't really work for us back in the '80s," admits Mullins. "Because supermarket wines were really looked down upon when I joined [in October 1990], my challenge was to make people proud to put them on their dinner table. I immediately started working with top producers like Danie de Wet, Kanonkop, Warwick and Rustenberg. Our aim was to change the image of Woolworths' wines and to give the own-label concept some respectability, and I think we succeeded."

Mullins is actively involved in the production of Woolworths' top-end confined labels. "We don't wait until the wines are finished to look at them - we look at them while they're still in the cellar, or even in the vineyard to make sure the right things are planted. Sometimes we also 'book' certain vineyards."

Take the Woolworths Cape Point Vineyards Limited Release Sauvignon Blanc 2006, which was the only Sauvignon to receive a 5 Star Platter rating this year. "We chose the tanks," beams Mullins, though he gives credit to winemaker Duncan Savage for offering "some great tanks to choose from".

Mullins says Woolworths' biggest challenge is informing customers about its wines. "We can't do brochures like Pick 'n Pay or Checkers because we don't have the advertising budgets, so we have all these exciting things, blended or approved by us, and then the customer walks straight past them! Our selling isn't doing them justice." To rectify this, a ma-jor drive is underway to educate customer-facing staff. "When you walk into Woolworths in six months time, someone will be there to talk to you about the wine instead of avoiding the department because they're scared of being asked any questions."

Makro, meanwhile, does weekly in-store tastings to get more wine into trolleys. "And our private and confined labels are all packed in six-packs with our usual discount which encourages people to buy these wines by the case," adds Barton, whose parting shot is that "we pride ourselves in choosing the best possible value for the price in these wines".

It all boils down to trust, says Eksteen. "The consumer has to trust the integrity of the retailer, so no matter what the price, the wine will offer genuine value."
"We love our job, and we're proud of what we're doing to keep quality going," concludes Mullins. "That's why supermarket sales are growing. There isn't the same stigma there used to be."