Meet the Force Behind Private-Label Booze

Ad Age Talks With the Marketing Chief of Winery Exchange

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Stephanie Grubbs might have one of the coolest jobs in the alcohol industry. She gets to create brands from scratch. And she develops not just one or two new offerings every few years, like most big brewers or winemakers, but dozens -- all the time. Ms. Grubbs is VP-marketing for Northern California-based Winery Exchange, which sources and helps market private label beer, wine and spirits.

Stephanie Grubbs
Stephanie Grubbs

While there's a good chance you've never heard of the company -- it keeps a low profile, not even disclosing the breweries and wineries they work with -- you've probably seen its brands, which are increasingly popping up at some of the biggest supermarket chains across the globe, including Supervalu, Kroger, Tesco, Safeway and Costco. Its newest offering is Barrel Trolley beer, debuting this month at Harris Teeter. Whole Foods just tapped the exchange for a new line of craft brands called St. Cloud Belgian White Ale, Four in Hand IPA and Copper Bell Light and Lager. Value brands include Big Flats 1901 for Walgreens and Game Day for 7-Eleven.

All told, the company takes in roughly $100 million in revenue a year, with 65 wine brands, 35 beer brands and 10 spirits brands in the market.

Ms. Grubbs grew up in Napa, pitching in at her family's independent drug store. Her first job in alcohol was at Robert Mondavi Winery, working part-time "answering the phones and doing bookwork for their summer festival" at a renovated tractor shed in the middle of a vineyard. She was promoted to marketing analyst, "did my time in sales" and eventually became brand manager for coastal wines. After stints at other wineries, she landed at Winery Exchange in 2003 and was promoted to VP in 2005.

These days, much of her focus is on growing the company's beer business. Private-label beers still command just a tiny fraction of the beer market -- but it's a growing segment, with store-brand sales up 41% in the year ended April 2, compared to the 2.3% drop in branded offerings, according to Nielsen. Much of the growth is fueled by private-label crafts, including at Winery Exchange, where the beer unit, called World Brews, has grown craft brands by 400% so far this year, Beer Business Daily recently reported citing Nielsen.

Ad Age recently talked with Ms. Grubbs about her company and overall alcohol trends.

Ad Age : Explain your business.

Ms. Grubbs: We have nowhere near the marketing dollars and funding that a national brand has. So the marketing initiatives are probably simpler. And we focus a lot more on encouraging the retailer to leverage their in-store advantages. So it all focuses on shelf, pricing [and] display rotation.

Ad Age : How do you break through in a lifestyle category like beer, which is so often fueled by image and big marketing budgets.

Ms. Grubbs: We do, internally as a company, invest pretty substantially in the package and in the design and the actual packaging so that it does stand out and does, we think, stand out above the competition.

Ad Age : You guys are creating new brands all the time. That sounds fun but isn't it also challenging?

Ms. Grubbs: What we like to do is create brands that are customized to each of our client bases. So if we have chain grocery store that is centered in the Midwest, we like to partner with them in getting their demographic info and also getting their sales scan data to find out what brands are resonating with their consumer base so we use that information to identify ... gaps in the portfolio.

Ad Age : So what kind of gaps are you seeing?

Ms. Grubbs: It does vary from region to region and chain to chain. ... Some [chains] have an opportunity to really build out their import private brands.

Sweet wines are an interesting new trend. So we have launched quite a few line extensions in the sweet wine arena.

Ad Age : What other trends are you seeing in wine?

Ms. Grubbs: The entire industry has moved away for the most part from critter brands, and sort of the whimsical brand concepts.

We have some contemporary styles ... that are colorful and bright and vibrant and inviting and basically communicate what's in the bottle but not condescending and patronizing. They have a little more staying power I think than the critter brands. We really rely on communicating the sense of place in some of our higher-end brands ... really giving the consumer an idea of the place and focus we're making on matching the varieties and growing regions.

Ad Age : And for beer?

Ms. Grubbs: For craft beer, the brand concepts and the direction that 's resonating has really been nostalgic post-prohibition-era look and feel.

Ad Age : Why?

Ms. Grubbs: I think because it hearkens back to the hand-crafted, the passionate brew master and it has that limited production feel about it that craft consumers are looking for.

Ad Age : What about your value offerings, like Big Flats 1901 at Walgreens?

Ms. Grubbs: Big Flats refers to a river in New York where literally big flats barges were bringing supplies up the river back in the '40s, I believe. So it's another one that harkens the consumer back.

Ad Age : Compare your beer and wine businesses.

Ms. Grubbs: We're further along in wine than we are in beer, and I think because the consumer is so used to having so many choices that it's not as daunting a prospect to venture into wine as it is for the beer consumer. But [beer is ] coming along pretty quickly. We are seeing far more growth in the beer category.

Ad Age : What's driving beer growth?

Ms. Grubbs: I think it's the value-conscious consumer on the one end. And on the craft end the experimenting consumer who's constantly looking for something new and the best value -- to be the first on the block to tell their friends about their find.

Ad Age : What do you drink?

Ms. Grubbs: I love a crisp Sauvignon Blanc.

Ad Age : Do you drink beer?

Ms. Grubbs: I do drink beer, and I do like the IPAs.

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