George S. May Business Blog

7-Eleven will sell proprietary wine

Trader Joe’s  and two-buck Chuck –  watch out, there’s a new competitor in town.

AP – The convenience store chain announced Tuesday it is getting into the value wine business, releasing two low-priced proprietary wines in the United States and Japan.

Sold under the Yosemite Road label, the California wines, a chardonnay and cabernet sauvignon, will retail for about $3.99, a price-point that has been doing well despite — or perhaps because of — the economic doldrums.

“The consumer is really pinched as far as discretionary income. We’re seeing a lot of success in products that really resonate on a value basis,” said Kevin Elliott, senior vice president of merchandising and logistics of Dallas-based 7-Eleven, Inc.

Private label products were strong sellers for many food retailers even before the economic crisis hit. Last year, 7-Eleven launched the 7-Select line of staples including cookies, candies, chips and beef jerky.

Adding wine ties into two economy driven trends — a demand for affordability coupled with more people eating at home, said Thom Blischok, president, global innovation and shopper marketing, at Chicago-based IRI, a market research company.

“They’re changing the game at convenience store retailing. They’re really trying to take this back to neighborhood stores. They fulfill your most basic needs,” he said.

Bargain wines have been booming as budgets shrank. Some brands, such as Two Buck Chuck (formally Charles Shaw but renamed in honor of the $1.99 price in California), have even attracted near cult following.

Yosemite Road is 7-Eleven’s first value-priced wines — the company earlier introduced Sonoma Crest and Thousand Oaks, which retail for about $10 — and it’s the company’s first global product launch.

The wines will be released in 15,000 outlets, including 7-Eleven stores in the U.S. and Japan, as well as other subsidiaries of parent company Seven & i Holdings Co., Ltd., an $87.9 billion Tokyo-based corporation.

The wines are being made by The Wine Group in California, which is the world’s third-largest wine producer and has a number of inexpensive brands including Corbett Canyon and Glen Ellen. The chardonnay is described as zesty with notes of apricot, peach and honey, and the cab as full-bodied with “juicy plum overtones.”

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