- Have you always dreamt of owning a wine brand but have never done anything about it because you know nothing about the funky science of yeast, let alone taking care of grapes or managing a winery?
- Are you eager to venture into the multi-billion-dollar wine industry?
If you’ve answered yes, you’re in luck.
In today’s blog post, I’ll cover the entire process of starting a private label wine business to help you sell wine under your brand name without owning and operating a winery or vineyard.
Let’s start with some insights into the wine market:
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Interesting Wine Industry/Market Insight
With a global market revenue of $340.8 billion, the wine market is one of the largest markets in the world
The market has experienced steady revenue growth, and expectations are that it’ll hit $528.6 billion in 2025 from the current $340.8 billion.
These revealing market insights show the profitability of the wine, making this niche ideal for a private label wine business. But what is a private label wine business?
What Is a Private Label Wine Business?
A private label wine business is a Buyer’s Own Brand (BOB) venture that buys wine from a supplier or winery that offers private label wine service, brands it, then sells it as its own. The features core players in a private label wine brand are:
- A wine producer who sells wine in bulk packages, offering to brand it under the seller’s brand, and
- A private label seller —you— who then markets and sells the wine as theirs —as the seller, you can change your supplier over time and add new wine products from different suppliers all under one brand name —or a brand name line.
A private label wine business allows retail brand owners to sell wine created by another winemaker under personalized brand packaging and labeling. Several vineyards and wineries produce more wine than they can sell under their brand. They often offer the excess production to BOBs, who sell the same good quality wine under their brand.
A private label wine business is the best way to venture into the wine industry because the lack of involvement in production and packaging allows your brand to focus on marketing and sales conversions.
Why Get Into The Wine Industry: The Pros and Cons
There has been a steady increase in the percentage revenues that private label wine brands contribute to the prodigious wine industry. According to the latest statistics, private label wines make up 10% of the total wine sales in the US.
Additionally:
Data from a McKinsey and EuroCommerce report on the State of Food Retailing 2022 shows that private label products make up 35% of the food and wine market.
Clearly:
The wine industry has a lot going for it, making venturing into private label wine branding a worthwhile consideration. However, no sector is without its challenges. Below are some pros and cons of private label wine businesses:
Pros
- Zero production costs: As a private label wine brand, you don’t handle production, packaging, or product branding. This zero production cost frees you to focus on what matters the most: marketing and selling your private label wine brand.
- Startup friendly: There is a sizable difference between the startup costs of a BOB and a winery/vineyard. For example, the capital required to start a winery in the USA is between half a million to 2 million dollars, whereas you can start a BOB with roughly $31,000, including licensing. Private Label Wine Brands also circumvent unforeseen challenges that wineries face, such as loss occasioned by drought and famine, plant diseases, low grape yields, and a negative trend in the consumption of different wine types.
- Product addition/change: Wine tastes change over time depending on fads and trends. With a private label wine brand, you can change products, offer a broader product line, or work with multiple suppliers as quickly as the trends change to meet emerging market trends and demands.
- Quicker Brand Turnaround Time: Whereas a vineyard requires a 4-8-year period to begin production, a private label wine business allows you to start operations in no time.
Cons
- Market Saturation: Chardonnay and Cabernet Sauvignon are the most significant categories in the wine industry, and that might attract your interest when you look at their revenue share. Unfortunately, their market is saturated/crowded and very competitive. As a new brand, finding footing in such a market won’t be easy, especially if you only have products in the two wine categories.
- Startup cost: The startup costs may be significantly lower than what you’d pay to start a winery or vineyard, but starting a private label wine brand is still costly, as mentioned earlier. Other than the overall cost of the product and licensing, marketing and branding are the other primary costs.
- The challenge of keeping up with changing wine preferences: Buyers’ preferences for a style of wine can shift faster than you can blink. Therefore, you need critical industry data and research tools that can help you predict trends accurately. Having insight into how the wine industry operates, perhaps experience working in a winery or a wine retailer, places you at an advantage against your competition. Due to the dynamic nature of the wine market, knowing which wine will work well with your target market can prove quite challenging.
- Finding quality sources is challenging: Numerous wine vineyards produce top-quality wine. However, identifying distributors with the operational efficiency you require and consequently forming a good working relationship with them is integral to your business and one of the challenges you will face.
What to Consider When Starting A Private Label Wine Brand
When starting a private label wine business, among other things, consider:
#: Sourcing
When creating your private label wine brand, it is crucial to comprehensively map out what you want the supplier to do for you.
If you want a complete product, down to the packaging and branding, you must look for a supplier who can provide the same.
An easier way to find quality suppliers for all products —including private labeling wine brands — is by working with a trusted product sourcing and fulfillment agent with bulk inventory storage, fast shipping services, and contacts worldwide, like Bestfulfill.
#: Licenses and Permits
Business guidelines and authorizing necessities vary by locale, state, and country. To conduct your private label wine business optimally without unnecessary encumbrances, ensure you comply with all applicable liquor licensing laws.
#: Know your niche
Knowing your audience —who you want to sell to— will significantly influence your selection of wine, logo, branding, and marketing strategy and campaign.
For example, to target women aged between 30-45 who live in Florida, your ideal wine selections would include canned Pinot Grigio, Rose, and Spritzer. These popular light, cooling, and refreshing selections transport easily during outdoor activities such as boating and fishing, activities common in Florida.
#: Wine Label Design and Logo
Courtesy: One Vine Wines
The wine bottle design, packaging, and labeling are key influencers among buyers. Fundamentally, know that most people go for the most refined-looking label in their buying power without necessarily considering the taste.
Labels and branding that include embossed labels, gold foil, or elegant typography tend to look more aesthetically appealing. Wine bottles that come prepackaged in boxes also have the expensive allure regardless of price.
Create a well-designed logo and branding plan to ensure your wine brand stands out, increasing sales.
#: Your marketing plan
Planning is the underlying component of any successful endeavor. A marketing plan ensures your products move off the shelves quickly and constantly. Your target market will greatly influence your marketing strategy.
For example, if your target market is 22-29-year-old women in LA, a sales strategy that includes paying influencers to promote your brand and sending them PR packages to test and review will drum up sales.
How To Start A Private Label Wine Business
If you want to set up a private label wine business, you can take the following steps to set up your brand.
Step 1: Research the market & your competitors
Step one involves determining what selection of wine your target audience is and has been consuming. Look at the players in the market and identify the niches you can satisfy. Where possible, chart a graph for the last five years to ensure you can analyze consumer habits in-depth.
Step 2: Choose the perfect niche
After identifying your target audience and niches, narrow your focus down to the specific niche that you can easily and efficiently cover. I’ve previously written about which tools to use for improved product research—product research helps you select the right niche.
Step 3: Get the necessary licenses & permits
Licensing-wise, California is one of the easiest places to start a wine brand in the US.
In California, you only require two types of licenses to start your private label wine business: a type 17 Wine and Beer wholesaler permit and a type 20 retail permit that allows you to sell online. The cost of both is $1000-$1500.
If you are importing the wine, it must comply with a list of requirements outlined in the Miscellaneous Trade and Technical Corrections Act of 2004. The rules in the act only apply to wine made from sound or ripe grapes that have undergone proper cellar treatment.
You must obtain a Natural Wine Certificate from the Alcohol and Tobacco Tax and Trade Bureau (TTB) as proof of compliance. The certification should include an affidavit from the source country’s government showing that there is control over the enological practices. The certification should also have a lab analysis report of the wine from a certified laboratory.
Countries with an Enological Practices Agreement with the United States are exempt from the certification. These include wine made from grapes, containing 7-22 percent alcohol from the following countries: –
- Argentina
- Australia
- Canada
- Chile
- Georgia
- New Zealand
- South Africa
And wines made from grapes with 0.5-22 percent alcohol by volume imported from the following countries in the EU: –
- Austria
- Belgium
- Bulgaria
- Croatia
- Cyprus
- Czech Republic
- Denmark
- Estonia
- Finland
- France
- Germany
- Greece
- Hungary
- Ireland
- Italy
- Latvia
- Lithuania
- Luxembourg
- Malta
- Poland
- Portugal
- Romania
- Slovak Republic
- Slovenia
- Spain
- Sweden
- The Netherlands
- United Kingdom
Step 4: Choose a private label wine supplier
A wine supplier is one of the most important aspects of starting a private label wine business that stands a chance at success. You can work with a custom-crush winery or facility that offers full-scale services —from providing the wine to branding and bottling it.
Alternatively, you can identify a local or international private label wine supplier or use a trusted sourcing agent to connect and strike deals with trusted winemakers and suppliers.
Most importantly:
Choose a supplier based on the kind of wine you want to sell (based on your niche), whether you want to private label wine from a specific, and whether a supplier offers all the services you need to run a successful private label wine business.
Step 5: Create your store and brand
Courtesy: DooFinder
After preparing your brand identity elements and doing supplier research to identify an ideal, high-quality wine supplier offering private labeling services, design your brand and logo, then use this brand identity across the board —eCommerce store, social media, branding, wine packing: everywhere.
Step 6: Choose a selling channel
Since the idea is to start a successful private label wine business, the ideal selling channel is a branded eCommerce storefront or website. Fortunately, thanks to platforms like Shopify and WordPress, anyone can easily create an eCommerce website.
You can also use other selling channels that help you create brand awareness, including but not limited to farmer’s markets, social media, wine exhibitions, and wholesale deals with local wineries, posh grocery stores, and restaurants.
Step 7: Marketing
Create and deploy a well-researched omnichannel marketing strategy that ensures your product reaches its target audience, then use impactful marketing copy that gives your wine products the best chance of flying off the virtual shelves.
Courtesy: Software Suggest
For example, you can use social media marketing and advertising to build a cult brand following or fan base or use niche and lifestyle influencers to promote your wine products to your target market.
Step 8: Monitor for Success
The last step is closely monitoring your marketing/branding plan, its implementation, and changing market trends and demands. This ensures you can keep your private label wine brand, marketing, and branding relevant to changing wine market trends and consumer needs.
Conclusion
Starting a successful private label wine brand is challenging but rewarding work. With the key pointers we have looked at in this guide, you now have a fair idea of how to start your private label wine business.
Private Label Wine Business FAQs
Q1: How much does it cost to design a wine label?
Some websites and apps will let you design wine labels for free, but typically, a design professional will charge you anywhere between $3000 to $30,000 for la carte services.
Q2: Is winemaking profitable?
Winemaking is profitable, and the wine industry has an annual revenue of $340.8 billion.
Q3: Do wine labels have to show alcohol content?
Yes, wine labels have to show alcohol content.
Q4: How do you name a wine label?
Your target audience/consumers will heavily influence your wine label name selection.
Q5: How big is a wine label?
The average wine label size is 9cm by 12cm
Q6: Can I start a winery without a vineyard?
Yes, you can by purchasing grapes from third-party grape growers
Q7: Can I sell wine on Shopify or Amazon?
Yes, you can sell wine on Shopify and Amazon because both platforms have no prohibitions on alcoholic products.
