What Are Private Labels and What Impact Do They Have?

Large-Scale Retail, Private Labels and Wine

Wine purchasing at large-scale retail chains (GDO – Grande Distribuzione Organizzata) is now a factor to be taken seriously, so much so that our Pasquale Testardi decided to dedicate the first article of his wine storage guide to the aspects arising from this trend.

But do you know what a Private Label is?

Private Labels, or store brands, are the "labels" that belong to retailers – we're sure you've bought something under the Coop, Auchan, or Esselunga brand at some point!

A relatively recent development in Italy, they have grown considerably over the years and established themselves at solid sales levels, thanks to a quality-to-price ratio that is often excellent.

Abroad they are far stronger than in Italy, partly due to less fragmented markets and less varied consumption habits – but here too, they are now a force to be reckoned with.
Thanks to the economic crisis and rising quality, they are now being talked about as genuine competitors to "branded" companies.

Behind many Private Labels, well-known companies and quality goods producers often "hide," choosing to employ their production capacity as co-packers for retailers in order to offset sales volumes that are slow to materialize.

Right or wrong? We won't take a position! One thing is certain: if behind a PL lies producer X, what could possibly motivate the consumer to pay the price gap for a product that is often identical?

We'll leave that for you to puzzle over and move on to talking about wine!

Private Labels account for 8.1% of wines sold in Italy and 22.6% in Europe, with a growing trend.

Among the most significant brands, Assieme is certainly worth mentioning – born from an agreement between Coop and several medium and large wineries such as Cevico, Cantine Riunite, Le Chiantegiane, Tollo, Moncaro, and others.
Equally noteworthy are Grandi Vigne and Le vie dell'uva (sold at Dok, Famila, A&O, and Superdì), which brings together around thirty labels from producers spread across the country.

The Conad brand, meanwhile, encompasses sixty-five labels, and the strategy is the same as many others: using fantasy brand names rather than the plain "CONAD." A winning idea – with their wines they manage to reach a 30–40% share of total category sales (a figure that in some parts of Italy reaches as high as 70%).

The Private Label range? There is something for everyone: prosecco (the top seller), red and white wines of every variety!
Given the trend, producers today cannot ignore this outlet market, which could represent an interesting source of revenue.
Common sense should guide decision-making and at least prompt some differentiation in raw materials, production processes, and even company names, so as not to devalue classic products that could suffer from price comparisons.