The private label wine business is picking up momentum as retailers and restaurants look for ways to boost revenue, increase margins and create a unique brand identity. On the surface, it almost sounds like an oxymoron - having your own wine label without having a winery. But private label wines are becoming an increasingly popular segment of the U.S. wine market, and for good reason: launching your own private label wine can boost revenue, increase profit margins, and help you create a unique brand identity that sets you apart from the competition. Perhaps the best example of a private label wine business taking off is the Kirkland Signature line of wines at Costco, which is already the #1 wine retailer in the U.S. Through its exclusive partnerships with wineries in the United States, Costco is able to offer unique, premium wines at half the cost anywhere else.

Similarly, Trader Joe’s has sold over 50 million cases of its private label wine since 2002. And a growing number of retailers - including some national wine and liquor chains and supermarkets - are following suit, viewing the private label wine business as a way to boost revenue and grow margins. According to some estimates, the margins on private label wine bottles are 10-15 percent higher than on bottles from national brands like and Barefoot. Plus, as wine experts point out, retailers are essentially shortening their supply chain by squeezing out some of the middlemen who are making their mark-ups every time they sell a case of wine. You are getting your wine direct from the winery, after all. As a result, it’s no longer out of the ordinary to see private label wines show up on the shelves of supermarkets. Even a few national wine and spirits stores, such as Total Wine, now offer private label wines.

According to the current estimates, private label wines now account for approximately 5 percent of all wines sold in the United States, and that figure could be headed higher. Some projections call for private label wines to eventually account for 20 percent of the entire market. That would make private label wines roughly the equivalent of other private label goods (i.e. private label pasta, private label canned goods) that supermarkets now sell. And in France and Italy, the private label wine market is even more popular, accounting for nearly one-third of all wines sold. In addition to the economic appeal of these private label wines, there’s also the branding aspect that can help to differentiate companies from other restaurants or retailers.

For example, the legendary Italian restaurant Carmine’s in New York City has used private label wines as part of its overall branding strategy. It has worked with wineries to create a range of different wines - Pinot Grigio, Chianti, Prosecco, Montepulciano, and Trebbiano - that it can offer to customers as examples of small, family-made wines, which can be enjoyed as part of a family-style feast. For families and tourists on a budget, it’s a way to create a welcoming wine menu that is also true to the restaurant’s overall brand.

The important point to keep in mind is that a private label wine doesn’t say “private label” on the bottle. To the casual wine drinker, it looks just like any other wine they might drink. While Costco and Trader Joe’s customers may realize they are drinking private label wines, that’s not necessarily true in the restaurant and hospitality business. In general, private label wines are starting to catch on as customers become more adventurous and daring in their choices. They may not recognize the wine or the label but are tempted to try it and experiment. And, as we’ve seen already, having an eye-catching label is often just as effective as having a first-class wine in terms of attracting attention.

The “snob appeal” of avoiding private label wines, if there ever was any, appears to be fading. After all, the bottle, the cork, and the label are no different. It’s just a matter of convincing a customer to try a $10-15 bottle of wine they may not recognize instead of a bottle of wine that’s 2-3 times more expensive. If anything, the major trend is towards private, exclusive wines that are grown in limited quantities.

So that’s how businesses can choose to position their private label wines. Instead of being used to attract cost-conscious customers, it’s a way to attract affluent, sophisticated customers. That may not be true for Costco, which is focused on selling huge quantities at low prices, but it certainly works for the hospitality business, where there is a constant search to differentiate oneself from the competition. As a result, everyone from a national chain of steakhouses to a small boutique hotel chain might be interested in creating a private label wine.

How do you get started if you want to own your own private label? 

The first step, say industry insiders, is to figure out the types of wines that your customers enjoy drinking and what the average price of the bottles they are ordering is. From there, you need to make a few projections about the growth projections of your business. You don’t want to be ordering thousands of cases of wine, and then be stuck with dead inventory.

Also, since every label must denote the place of origin of the wine, the wines you select should be a natural fit for the restaurant in terms of region and style of wine. From there, it’s time to reach out to wineries that might potentially be interested in a deal. Some wineries are able to accommodate a wide range of order sizes - everything from 5 cases to 1000 cases - while other wineries prefer only to work on smaller or larger order sizes. Once you’ve narrowed down your choices, the vintner will work with you on every aspect of creating your own wine - down to the creation of the label and even the type of cork. There are also independent design companies specializing in designing wine labels, cases, and other promotional material.

They will design a label that meets the specifications of the country you want to sell it and the tier you want to sell the wine in. From there, all you have to do is place the order and you’ll soon have your private wine label, all without the time and expense of actually operating your own winery.