Retailers should ‘treat own-labels like true brands’

Major UK retailers are right to take cues from discount supermarkets such as Aldi and Lidl if they want to keep pace with where the market is headed, according to the UK and EU export sales manager of one fast-growing Australian bulk wine producer.

Nick Maskrey, LCW’s UK and EU export sales manager

LCW, a producer based in Australia’s Limestone Coast, was founded just two years ago, but has expanded significantly during that time securing listings with major UK retailers including Morrison’s, Tesco, M&S and Co-Op. LCW currently produces 12 million hectolitres and exports to 15 countries, the most recent being Sweden.

Speaking to the drinks business at the World Bulk Wine Exhibition in Amsterdam this week Nick Maskrey, UK and EU export sales manager for LCW, said the next aim for LCW would be to get its wines listed in Sainsbury’s, Waitrose and Lidl, assuming each listing makes commercial sense

“People know they can go into [Lidl and Aldi] they can buy the same wine at the same price every week, whereas others you see people going in because it’s half price and then the next week they will go to another retailer”, said Maskrey. “What I think we will see in the next six to 12 months is retailers looking at their range and almost starting again, without having high and low promotions. Consumers walk in and see stacks of wines and it’s so confusing. I think it will become more varietal and own-brand led. It’s LCW’s view that retailers should start to treat their own-labels more like true brands. Look at Lidl and Aldi – I think that’s where it’s going to have to go.”

As supermarkets such as Lidl and Aldi have continued to grab market share, Maskrey believes large retailers such as Tesco are right to be shaking up its wine ranges.

This year Tesco announced it would be slashing its range by around 30% to 660 skus in a bid to simplify its range, launching the revamped range last month along with a fixed price wine model. As part of the category review, a significant number of wines within Tesco’s range have been lowered in price, dropping, for example, from £6.99 with high and low promotions to £6.

Commenting on Tesco’s decision Maskrey said: “If it doesn’t work people won’t buy those lines and they will go somewhere else”, he said. “It’s a big decision and a brave decision. They have looked at the trends of the consumers and adapted accordingly.”

While competition for shelf space may be increasing in the UK as retailers contract their ranges, Maskrey is confident in LCW’s abilities to deliver what customers are looking for.

The Hidden Sea, LCW’s on-trade brand

“There is more competition but the customers that we are with know our wines and know we over deliver”, he said. “We see it as an opportunity. If they have their ranges and know they want to go varietal specific or a particular style we can do that. Australian brands will be the ones that will suffer. We are able to deliver across all levels – entry, mid and premium. We can create a story with LCW and it gives us an opportunity to offer an own label brand to them. People are tasting our wines and realising what we offer and that we are really flexible. We can basically do a bespoke wine for everyone – we can be reactive due to our flexibility.”

LCW also produces its own wine brands, which includes its Hidden Sea range. Aimed at the on-trade, the range comprises a 2013 Shiraz, 2013 Cabernet Sauvignon, 2014 Chardonnay and 2014 Sauvignon Blanc. The Limestone Coast Brand is also being launched in 2016 with an off-trade focus, with both ranges distributed in the UK by Kingsland Drinks.

Maskrey confirmed that the company was in the process of producing a rosé wine, and hinted that it would be open to experimenting with oaked Sauvignon Blancs in the future. Earlier this month Richard Bampfield MW suggested that Sauvignon Blanc would need oak in order to reach the “next level”. 

“We just want to give the retailer and their customers want they want”, said Maskrey. “They are creating their own wines, it’s their vision. That’s what we are all about.”