Not at all sure that the first part of the statement is true and cannot conceive how the latter part is in any way reality.
After a PM I thought I might further my initial comments regarding Kroger and Southern.
I also have to clarify that I use ‘Columbia’ and ‘Young’s’ as the same name, to me it is, but that was a while ago, no offense.
Let me start by saying I think this is a horrible idea and historically illegal (although I’m sure their lawyers have been advised), this is fairly blatant and certainly stretching or at least seeing how far they can go in their relationship.
But… This has been going on for years, just not as transparent and organized. It makes a lot of sense from Kroger’s standpoint, it’s an issue that they don’t have to deal with…managing and controlling wine/liquor (liquor is an even bigger market). Kroger has a company telling them what to buy, when to buy it, how much, placing the order, delivering it and then merchandising the order so that maybe 1-2 Kroger employees has to touch it… saves time and labor $, totally understandable to me.
The thing is, it’s perfect for all parties, Southern uses Neilsen research focused on their brands to place wines that people will buy… and people WILL buy them… The bottom line will inevitably be better for both of them, for everyone else it’s gonna suck.
Now, someone I know pointed out to me that any one company could have done this, any one company could have beat out Southern or Young’s (except for the fact that not everyone has distribution in over 30-35 states as Southern and Young’s does) if they just paid enough and played the game.- This point I have to call bullshit out on so many levels, NO ONE, NO ONE can compete with Young’s or Southern.
NO ONE can discount product, slash prices and force markets to work like those two companies. And in fairness, Young’s and Southern have done an amazing job of building their management core, acquiring and building brands. Don’t forget that these guys have a TON of killer wine, seriously DRC, Leflaive, Cohe, Dom, Bolly, Krug, ect…ect…all markets vary of course but you get the point they have rounded books, key brands and a ton of cash. The main issue is their sales force is not the most wine educated… but that could be said about a lot of companies…
So who losses?
Us Berserkers and pretty much no one else… Ok maybe people who want to find small new growers or winemakers that aren’t represented by either Southern or Young’s…Most people don’t care and having a wine dictated to them is what they want (think points or scores).
what it means is that the big evil guy wins and the rest of us suffer while the general public smiles and nods.
The irony is that I think deep down the other company who didn’t get the gig is pissed.
But in the end, this was inevitable.
Kroger is the new “Evil Empire”, and I really hope they stay out of SC. When I lived in MI, they were everywhere, and absolutely horrible. Lousy meats, bread, wines, you name it - terribly generic. Recently they bought the wonderful MI grocery chain Hillers and turned them into Krogers, now they have purchased the nice Harris Teeter chain in NC, I am sure it is a matter of time before the horrible Kroger stores take over NC. Yuk.
They can be beaten. In Houston they are getting DESTROYED by HEB. HEB opened a new store directly across the street from a Kroger signature store and the Kroger sits basically vacant and you can’t park at the HEB. You just need a local player who wants to be better. The big national chains end up being too homogenized and just aren’t as good as people that partner with both local and national suppliers. As to wine, at HEB I’ve seen or bought dominus, pride, Keenan, sassicaia, fisher, miner, ladera and a host of others which is far superior to your typical grocery store wine.
Well, this is a key point. For the large supermarket chains, like Kroger, they aren’t looking to appeal to the wine geeks (and they are successful in not appealing to the wine geeks). They are marketing to the vast sea of typical shoppers who just want to buy a bottle of wine that they’re going to open up and drink that night with whatever they’re picking up at the grocery store that day. Depending on the store and the location, the price point of the average bottle of wine in the store is $10-$20, and they often carry the larger jugs or boxes of wine that are much less per bottle. But the basic point is NOT stocking high quality–it’s stocking convenience. My standard wine buy in a large supermarket chain is to buy an inexpensive bottle of white or red that I can use for cooking, and hopefully is decent enough that I can also drink whatever I don’t use for cooking. But even my local Kroger/Ralphs carries some upper-end wine, like Dom.
But again, there are a lot of variations between stores & locations. In our area, Vons has an upscale version of their store called Pavilions. There are some Pavilions locations that have an extensive selection of very upscale wines. For example, the Pavilions in West Hollywood is a huge store to begin with, and it’s a very large wine department that obviously stocks wines that you won’t find in most Pavilions (like upper-tier Bordeaux).
Bruce
You need to pay to get on the shelves. That is for wines and even potato chips. The small wineries, small craft beer folks cannot afford it. SWS will shut them out. Good old SWS the 800 lb gorilla has now control of another share of the market place.
Forgot one comment. I have always hated SWS!! They are totally against me buying wines from out of state & country, that they do not sell. This 3 tiered market place is not the current mode, and against a free market
At least Kroger is not in Florida. Publix has a good selection, and They do have a bunch of craft beers. ABC and Total Wines has a good selection.
Have you been to the Kroger on N Shepherd and 11th? Insane wine department with some nutty prices.
Great to hear!
Jim - don’t be so literal!
To break it down - the first part is most definitely true. You could search some threads on this board - every other year someone introduces a bill in the legislature to allow grocery store sales and there’s a hue and cry from the big distributors about how dangerous it would be for the business and eventually the proposed bill is killed. The response from most retailers, which is fair, is that as part of the change they should allow retailers to own more than one store. The way it’s done now is that you get your brother in law or mother or some family member to be the owner of record.
Neither part of the second statement can possibly be true in any sense. I wasn’t serious, hence the capitalization. Those arguments however, are some of the arguments made.
My ultimate point however, is that it really doesn’t matter. If there is a rule, any rule, someone will figure out a way to work that rule in an advantageous way. So in NY, the bigger distributors have kept the retail competition atomized and they face no big retail chains. In states where such chains exist, they figure out a way to combine forces with the chains.
Cheers! ![[cheers.gif]](/uploads/db3686/original/2X/0/0ff9bfcdb0964982cd3240b6159868fbdf215b1a.gif "cheers"){kind=small}
This has been and will continue to happen at all levels where wine is sold - groceries as well as on-premise. Just surprised that they would make this ‘announcement’ . . .
The push to allow grocery store sales is going strong this year (led by Kroger and Safeway (who also are attempting a merger)). Attempts via ballot and legislature are going strong now. Craft breweries are the most vocal opponents to the efforts, but so too are the retailers. Being from WI, where a grocer, wine shop and convenience store all sell booze in the same shopping center, I personally believe more outlets equate to more sales of the small producers. Both sides in CO are being stubborn instead of reaching a compromise that helps everybody. 
I understand the hostility to Southern, but when the producers and suppliers unite against the retailer, I get suspicious.
Moreover, the current arrangement, with AB InBev and Diageo advising Kroger’s, can’t be good for competition, or good for people like you.[/quote]
No, it’s not and as jbray noted above, it’s not new.
For the past several years resets at Fred Meyer have been heavy on Chocolate wine and mediocre Moscatos. Messing it up as noted above, since Portland has a pretty savvy market and neither of those products are overly trendy here.
We’re fortunate to have great independent wine shops in PDX, but it’s still a bit sad because the Fred Meyer stewards were a knowledgeable group that had great sets for quite a few years.
A bit more information from an independent point of view:
http://morningnewsbeat.com/News/Detail/48785/2016-02-01/
There is pay to play in every category of the grocery business. There is competition at every point of the business. But there are exceptions that allow some diversity into the selection process. Ultimately the customer gets what they want or they go elsewhere and no supermarket wants that.
Ha, Ha – I am from the great Commonwealth of Monopoly Pennsylvania. We don’t have this first world problem. Our decisions are made for us by a fine state employee in Harrisburg. We don’t even have Kroger in PA (they own Turkey Hill which we do have). However, they must be doing some things right - their stock was a winner last year.
Yeah, wish HEB would go out-of state but they won’t. Their Central Market brand usually has excellent wine selections. Kroger here in New Mexico is Smiths and often pathetic stores.
Is trader joe’s a viable alternative in NM?