Private Label Wines

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By Erin DeWitt
March/April 2010

The notion of house wines, which used to be that they were somewhat inferior, has drastically changed in recent years. A unique addition to your wine list, private label wines give your customers the opportunity to experience complex new flavors along with a sense of exclusivity. Interestingly, the experience of purchasing private labels or creating your own can be as diverse as the wines themselves – where the grapes come from, who made the wine and so on. House wines are holding their own on the wine list for a variety of factors, such as the new outlook on smaller vineyards and lesser-known winemakers.

Fleming’s Prime Steakhouse has been working with private labels for some time. “We make our own wine in partnership with a different winery each year under the Forty-Six Diamonds label.” Says Marian Jansen op de Haar, Fleming’s Director of Wine. “Our first year partnership was with Flora Springs on a meritage blend (Cab-Merlot-Cab Franc etc.), the second year we did it with Georges Duboeuf -this was a Pouilly-Fuisse (chardonnay) from the Macon region in France.This year we have a Pinot Noir from Carneros that we made with Folio which is Michael and Rob Mondavi Jr.’s new company (we made it with Rob and their winemakers).”

But choosing a winery is a process in itself. “We look for a partner and a varietal with which they have special expertise,” continues Jansen op de Haar.”In other words, we know the grapes were grown in the right place, we know Winery Restaurant & Wine Bar (The) – Tustin/winemaker is very adapt with this varietal and we like the style of their wines.Together we make a wine that fits Fleming’s and their style.”

Private label wines can do more than compliment a restaurant’s menu, though. With a delicious house wine, the establishment can lay claim to that bottle and its accolades. “I think that private wine labels are great because it is another form of advertising for the restaurant or venue,” says William Lewis, Sommelier and Managing Partner for the Winery Restaurant in Tustin. “If the wine is any good your establishment gets the credit for it.You have yet another way to advertise the restaurant.” So what makes for a satisfying house wine? “I look for good to above average quality wine when doing a label,” says Lewis. “I also look for a good price point as the wine would be considered a house’ wine. I also look for a meritage or blended red that everyone would like.”

Private label wines are “a great marketing tool, especially at outside events, gift baskets, etc.” adds Steve Ebol, Sommelierfor Antonello Ristorante – Santa Ana in Santa Ana. However, restaurants best not underestimate their customers. “If the wine is just average at best, it sends a bad signal to the consumer,” Ebol points out. “Folks are much more wine savvy than in days of old.”

“Many years ago we did a private label’ from a wonderful winery in Paso Robles. It was a wine lot’ selected by us and for us. It was a great wine for our family of restaurants for over 10 years,” continues Ebol. “Currently we are happy to offer a trio of wines from Piemonte Italy, hand selected by Antonio and myself, each wine created to our specifications. The Il Solito Vino line launched almost three years ago and has been a wonderful marriage of a childhood winemaking friend of Antonio and Antonello Ristorante – Santa Ana. By having 3 wines in the line, we can suit most any palate.”

However, it may be a wise decision to select a winery on U.S. soil for now. “Because of the upside down’ dollar to Euro right now, these actually become more costly than originally predicted many years ago when I first started researching the project, and the dollar was much stronger. Thank goodness we bought so many cases when we did,” says Ebol. “A word to the wise: go domestic until the dollar regains strength in Europe!”

Poor economy aside, these wines are doing relatively well from a sales standpoint. “Private label wines have been my biggest type of wine that I receive reorders for,” says wine sales consultant Susan Lynn Bartoletti. “I have been in the wine business for 20 years. Once an establishment begins using private label wines, they always reorder.”

Along with serving private labels on the menu, some restaurants are also selling wines as retail. It’s a lucrative way to increase revenue as well as exhibit the bottle of wine, making it available to the public. Beverage licensing attorney Michael Cho reveals that any restaurant that sells wine with dinner may also sell it to take home. “All on-sale premise licenses include the right for accessory off-sale,” says Cho. “For example, an on-sale beer and wine license or on-sale beer, wine and distilled spirits will allow the licensee to sell beer and wine to go (distilled spirits cannot be sold to go).” However, Cho mentions that there is an upside and a possible downside to a restaurant selling wine retail. The benefits are “additional profit center and marketing if combined with a winemaker event (dinner/tasting); it also sets the restaurant apart from most that do not sell to go,” he says. The possible negative aspects?”Restaurants have to carry additional inventory in these challenging economic times, and winemaker dinner participation is down so pricing becomes very important.”

Though probably no one knows more about the business than Paul Kalemkiarian Jr., wine and spirits retailer, and son of Paul Kalemkiarian Sr., founder the original Wine of the Month Club in 1972. Since helping with the family business as a teenager, Kalemkiarian Jr. now runs the operation and has watched first-hand as the world of private labels has broadened immensely.

“The primary reason for entertaining private labels is value: quality versus cost,” states Kalenkiarian. “If done correctly, you can either decrease your costs and maintain the level of quality you are providing, or raise the level of quality for your current spend. The primary con is that you need to make volume commitments that you otherwise might not make, and that you have a whole logistical issue with timing and delivery. Depending on the arrangement and how involved you want to be, it could be as simple as just creating the label and leaving the rest to Winery Restaurant & Wine Bar (The) – Tustin or it could be as complicated as acquiring your own winery license and actually crushing grapes and making the wine from the beginning. Most consumers know you don’t own a winery and it is important not to try and fool them. However, if you brand a wine that is not related to the restaurant name, you could actually develop a following and create a brand.”