7-Eleven Adding Upscale Wines in Select Markets

Published in CSP Daily News

In move to attract Millennials, retailer bringing "A-list" varietals to 700 stores

DALLAS -- In a move reportedly intended to attract Millennials, 7-Eleven Inc. has added four high-demand A-list varietals to its lineup at its top wine-selling stores--wines that have scored 90 points or higher in oenophile publications such as Wine Spectator and Wine Enthusiast.

The ultra-premium varietals--La Crema Chardonnay, Louis Martini Cabernet Sauvignon, Kim Crawford Sauvignon Blanc and Wild Horse Pinot Noir--not only score high in quality, but also in value, said the retailer. The Wild Horse is the best seller in the pinot noir varietal at a $19.99 price point and most recently rated 89, the company said.

All have a suggested retail price at or below $19.99 at the participating 7-Eleven stores.

Approximately 700 7-Eleven stores in 16 states are offering the ultra-premium selections. According to a USA Today report, markets include San Francisco, Newport Beach, Calif., some Chicago suburbs and parts of Northern Virginia. These stores' wine sales patterns indicate their customers have an interest in higher-quality wines.

A study by The Beverage Information Group shows that American wine consumption increased by 21% between 2001 and 2011 and is now almost keeping pace with beer drinking. The growth shows no signs of stopping, with the group's 2013 Wine Handbook reporting that the wine industry grew almost 2% in 2012 alone, the retailer said.

Wines are categorized by price: economy, less than $3.50 per 750-milliliter bottle; fighting varietal, $3.50 - $4.99; popular or mid-tier, $5 to $7.99; premium, $8  to $10.99; super-premium, $11 to $14.99; ultra-premium, $15 to $19.99, and luxury at $20 or more.

"Even in a tight economy, people are splurging on higher quality wine or craft beer to treat themselves," said Alan Beach, a 7-Eleven vice president of merchandising. "We have seen strong customer response to our offers of premium and super-premium wines in our stores. Now, with these new ultra-premium additions, we can offer wines that have been recognized as some of the best in their class."

Varietal wines, named for the grape varieties from which they are produced, have grown more popular than the generic blended wines categorized generally as red, white and rosé. Varietals also tout the grape varieties over geographic growing area. The "big eight" varietals are: for reds – merlot, cabernet sauvignon, pinot noir and shiraz; and for white – chardonnay, riesling, pinot grigio and sauvignon blanc.

As U.S. wine drinkers' tastes have grown more sophisticated, 7-Eleven stores' wine assortment has followed suit. The retailer has come a long way since the days of inexpensive, fruit-flavored wines. Since the mid-1990s, the company has been on a steady path to offer a wider--and better--variety, it said. While the retailer's stores used to offer only a dozen or so different types of wines, today's top wine-selling 7-Eleven stores carry between 24 and 40 varieties from wineries around the world.

"We want to create a mini-wine shop within some of our stores that have shown strong demand," Beach said. "Regardless of their budget or taste preferences, our guests should be able to find a wine to meet their expectations."

The company sources its own private-label wines like the value-priced Yosemite Road from California.

Because of 7-Eleven's proprietary retail information system and retailer initiative strategy, the company can identify stores that would be most successful selling the ultra-premium line. Each store can track which brands are the most popular with customers in their trade area and provide the assortment that satisfies their guests' tastes. For example, 7-Eleven stores in northern Virginia's affluent neighborhoods have shown increased sales since introducing the 90-point wines.

"Typically, people might head to the grocery store to find a new wine, but our guests have been pleasantly surprised to learn what a broad selection of great quality wines their neighborhood 7-Eleven store has … and at good prices," said Greg Manzer, 7-Eleven's market manager for 110 stores in northern Virginia. "We want to be a wine destination, and these new, ultra-premium wines are giving local wine-lovers another reason to consider 7-Eleven when looking for a good bottle to enjoy."

The burgeoning wine market crosses generations, with the most frequent buyers being baby boomers and legal-age Millennials, according to a 2012 report by the Wine Market Council, a nonprofit trade association. An estimated 100 million wine-drinkers, almost half of American adults, put the United States in the lead of wine-consuming countries.

Boomers long have been the core group, but the Gen Y/millennial-age group also is driving growth in the category, drinking more than their share of wine compared to other age groups, the report says. While breaking out a bottle used to be reserved for special occasions, a glass of wine has become as much a part of weeknight dinners as weekend dates and get-togethers, particularly for Gen Y drinkers in their 20s and 30s, 7-Eleven said.

"I believe we will see more of our stores adding premium and super-premium wines as demand increases," Beach said. "In just a short time, momentum is already growing. And, now we are heading into the holiday season, the heaviest wine-sales time of year. 7-Eleven is ready with just the right bottle of wine--or two--for any holiday occasion."

Dallas-based 7-Eleven operates, franchises or licenses nearly 10,200 7-Eleven stores in North America. Globally, 7-Eleven has some 51,400 stores in 16 countries. During 2012, 7-Eleven stores generated total worldwide sales of nearly $84.8 billion.