When Walmart launched its Winemakers Selection private label wine brand in 2018, it signaled a major push by the bargain retailer into the premium end of the category. The expansive line was exclusive to Walmart, and included 10 varietals all sourced from California, Italy and France. The company's senior wine buyer said at the time that the wines, which ranged in price from $10 to $15, "drink like a $30 to $40 bottle of wine."
But Walmart has determined since then that Winemakers Selection was a bit too expansive — and expensive.
Late last week, the retailer relaunched the store line with a focus on five core selections, all sporting a new look, and all priced at $5. The goal is to start with these new California-sourced selections — chardonnay, pinot grigio, rosé, cabernet sauvignon and a red blend — and then build the line out from there.
"This relaunch is all about our customers, simplifying the branding, making it clearer, making sure the items are what our customers are looking for, and then of course over-delivering on the quality of wine for the price," Jason Fremstad, vice president of adult beverage for Walmart, said in an interview.
Based on sales data, Fremstad said Walmart knows its shoppers are more familiar with these varietals and more interested in purchasing them.
A Walmart spokesperson said the company worked with a designated winemaker to curate the new selections, which will be available in all stores where wine is sold, which is about 2,600 locations. Customers can also purchase the wine online through pickup or delivery, where permitted by state and local laws. The previously branded line has not been pulled from store shelves, but most of the inventory has been sold through.
In addition to paring down the line's price and selection, Walmart has also refashioned the Winemakers label into a simpler design that pumps up the brand's name. With the original line, the company determined customers had a hard time identifying which wines were part of the label, Fremstad said. The refreshed branding will help customers more easily identify the line, and it will give them some basic information about the bottle they're buying on the label, he said.
According to Bourcard Nesin, beverage analyst for Rabobank, now is a good time for a retailer like Walmart to invest in wine. The category is ripe for disruption due to a lack of branding, and wine sales have grown quickly in recent years at grocery stores. From 2011 to 2016, Rabobank found alcohol sales at grocery stores grew 25%. More recently, data from Nielsen shows online wine sales are booming due to COVID-19, with dollar sales for wine purchased online up nearly 17% in early July from the year prior.
"That gives Walmart a great opportunity to put forward a brand that’s well-priced and well-branded," Nesin said.
But wine's popularity both online and in stores has not gone unnoticed by competitors like Target, which launched its own $5 wine label in 2017 and has since expanded into more premium selections. Trader Joe's and Costco are also formidable competitors for wine-drinking shoppers, while discounter Lidl, which has planted many stores close to Walmart's supercenters, has built out an extensive selection of value-priced wines.
Nesin said Walmart will no doubt lean on its extensive consumer data to craft line extensions. If the rebranded Winemakers Selection lineup resonates with shoppers, Fremstad said Walmart may invest in other series under the store brand, such as a Reserve series.
"At this point, our full support and everything we’ve worked on is to get the Classic series right. If the Classic series doesn't work, there’s no reason to expand the brand," he said.
The relaunch of Winemakers Selection is part of a chainwide reset of Walmart’s wine assortment and a key piece of the retailer’s broader strategy around adult beverages. Fremstad said Walmart’s goal is to have a variety of wines at different price points for every occasion, from the $5 everyday bottle to go with Friday night pizza to the $50 bottle for an anniversary dinner. The effort aligns with Walmart's addition of premium alcohol to its shelves earlier this year, including craft beer, wine and high-end spirits from labels like Veuve Clicquot and Buffalo Trace.
Currently, Walmart carries everything from its Oak Leaf Cabernet Sauvignon at $3 a bottle to more expensive labels like Justin Cabernet Sauvignon and Kim Crawford Sauvignon Blanc.
"We are trying to make sure we deliver on what our customer asks of us,” Fremstad said. "We want core and discovery."
"At this point, our full support and everything we’ve worked on is to get the Classic series right. If the Classic series doesn't work, there’s no reason to expand the brand."
Vice President, adult beverage, Walmart U.S.
To boost Winemakers' appeal online, Walmart will create digital content that tells shoppers more of the story behind the varietals. The line will also be promoted on Walmart's app.
Nesin thinks the relaunched Winemakers Selection could be significant for Walmart’s online grocery business, particularly due to COVID-19.
"Someone like Walmart, they are actually able to more effectively intervene and direct consumers toward their products," Nesin said. "They can do that through placement and search, through making their labels more attractive and their descriptions more attractive than competitors."
Because of the pandemic, Nesin said Walmart has drawn many new customers, and those who shop online tend to be wealthier, younger and more educated. That demographic also tends to drink wine, and with the right online assortment, Walmart is more likely to attract those same shoppers to the physical store, Nesin said.
And that is part of what Fremstad wants to see, too.
"Our goal, obviously, is to bring more customers that are in Walmarts down the wine aisle, so they can see the wines we have, and we think the assortment we have now with this reset will be better than ever."