KDM Global Partners, LLC Newsletter April 2009
In This Issue
Wine Retailers Increasingly Turning to Custom Bottled Wine
Twitter and the Wine World
What's in a Label?

It's Official!
..and his name is "Bo."

We've campaigned hard in previous newsletters for the Obamas to choose a Portuguese Water Dog.
January, February, and March
And now they have!
Bo Obama
Scientists have already cloned sheep, camels and even in some rumored cases human organs - but if Bo Obama isn't a "separated at birth" image of Romie, no dog is!
Ripley and Romie
'Hope the Obama family enjoys their Portie pooch as much as we do ours.

   About KDM 

KDM Global Partners, LLC is a wine producer and importer whose core business is creating and building new wine brands for its clientele of retail chains, restaurants, hotel/resorts, corporations, meetings/events - and individual brand owners.  

With corporate offices in Philadelphia, PA and wine-making capabilities throughout the world's great viticulture regions, KDM's turnkey brand-building capabilities are unparalleled: packaging design, regulatory approvals, warehousing and distribution (to all 50 states and overseas)...all varietals, price points, low case minimums. 

The world of wine production, distribution and sale is evolving quickly, creating compelling opportunities for businesses of all types.
We'll take you there. 
Learn more here: KDMGlobalPartners.com
Let us hear from you!

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"I can certainly see that you know your wine. Most of the guests who stay here wouldn't know the difference between Bordeaux and Claret."
John Cleese (Basil Fawlty) - -
"Fawlty Towers"

Wine Retailers Increasingly Turning to Custom Bottled Wine

US Retailers are increasingly choosing to launch their own "house brands" of wine for their stores.

This trend is apparent for large, national retail chains as well as "mom and pop" wine retailers.

The reasons are many: (1) retailers earn higher profits on private label wines designed especially for their stores - and the wines are better than comparably-priced national brands; (2) the wines cultivate customer loyalty and repeat business - since these products are ONLY available at the brand owner's place of business; and (3) the wines help to "brand" the store and differentiate from the competition.

Costco is #1 in gross wine sales in the United States and has increased its offering under the house "Kirkland" brand. Since Costco's business model generally limits its stores' margins to approximately 15%, Costco's wine business has focused more on "in and out" selections of wine liquidation items, rather than building ongoing lines of domestic and imported varietal brands. Nonetheless, customers nationwide have turned to Costco for substantial wine purchases.

Everyone ignored the convenience store channel for its potential for wine sales. 7-Eleven felt otherwise and, a few years ago, introduced its proprietary "Thousand Oaks Vineyards" line of California varietal wines. Initially a simple Cabernet-Chardonnay-Merlot line, the Thousand Oaks brand has grown into a very successful line of eight (8) selections, sold nationwide in approximately 3,300 stores in 30 states (where permitted by law). Retailers everywhere now recognize the value and potential for PL Wines at their locations.

For a small wine retailer, especially, to ignore the opportunity of PL wine is to do so at its own peril. These shops are already fighting battles on many fronts - from losing customers to big box chains, supermarkets and larger "regional" wine retailers, to being squeezed for margins by the big brands (and wholesalers), to competing for sales with Web-based retailers.
To retain market share, wine retailers are now fighting back - and regaining business! By offering their own proprietary label wines, these stores are cultivating their customers' loyalty by offering PL products that can ONLY be purchased at their stores - and earning much higher margins in the process! Many of these stores are also setting up Web-based fulfillment mechanisms, where the wines can be shipped direct-to-consumers in other locations-  another revenue-producing opportunity.

In addition, while most large wine programs often involve thousands of cases of custom productions, retailers now only need to commit to a few pallets of wine, thus limiting their upfront expenditure and allowing them to compete with the big players for a relatively low sum! http://www.kdmglobalpartners.com/.
Twitter and the Wine World
The era of "social networking" is pervading the Web now. Businesses are clamoring to understand its various components and thus determine how to best exploit its potential for the benefit of their own corner of the commercial world.

Social networking means virtual "handshaking," working the room, connecting with people rather than sitting in conference rooms giving presentations. While there is authenticity and accountability, the "business" of business development has been transformed in many ways by the "tweet."

Twitter is now earning its stripes as a marketing powerhouse platform. For those of you who might have been living in a shoe or were kidnapped by pirates, Twitter is a Web application that allows you to share 140 character messages with anybody - on a real time basis - who cares to tune in to what you're saying. It's really that simple.

And Twitter's capabilities lend themselves beautifully to many aspects of the wine business: (1) Wineries and other wine producers twitter to put a human face on the business and enable consumers to interface directly with a winemaker or a wine biz exec; (2) Wine Web sites are starting to use Twitter to launch products, lure their "followers'" to a Web promotion or even chat informally with customers; (3) Wine Tasting Clubs are now organizing online tastings involving Twitter as a real-time enabler - 140 characters is (usually) more than enough space to spew adjectives about a taste profile! (4) Wine professionals in all niches of the business follow each other on Twitter, for sales leads, for career reasons and for fun; and (5) If you've built a solid Twitter community of folks to follow - and who follow you - you have thus erected a "lazyWeb" network for throwing out questions that others might have an answer to. Twitter becomes a great cooperative exercise in this way.
What's in a Label?
Back in the day, a wine label had no populist appeal. Producers did not rely on the label to "attract" business but rather to inform the narrow public of oenophiles about the appellation, vintage, producer bio and so forth. Labels were informative - but dull. Nobody gave packaging much thought...it was the information that mattered.

Labels are still informative (and depending upon the country of origin - some are more informative than others) but, now, since the wine category has moved more into the mainstream of consumer consciousness, packaging is critically important to success. And, since wine is now also sold in supermarkets, big box retailers, convenience stores - as well as in large wine "supercenters," alongside thousands of competing products, labels and even packaging styles vary widely and can often contribute to sales triumphs.


Wine retailers will agree that consumer purchases based on the label packaging alone vary widely - depending upon the varietal and the price point of the wine. Consumers looking at high-end, limited production wines are less influenced by label design, colors and other nuances of packaging. But, in other price categories, where there are thousands of competing products, labels are often the determining factor for customers at that critical "point-of-sale moment." Of course, getting that customer to come back a second or third time for the product will depend on the quality of the "juice" inside the bottle!