The truth about consumer choice, market access and big box retailers.

Here is an interesting article that talks about how consumer choice and market access is being severely limited by 'big box stores' and the concentration of supply sources. You need to read the entire article to understand this quote in context, but the bottom line is simply this: If New York's wineries think that opening up wine sales to grocery stores and the big-box retailers will help them, they better think again. It is self-delusion to think that relatively tiny New York wineries will buck the trend of all the other product classes sold by the big chains. I don't care what Wegman's says about promoting New York state wineries, in the long run (ten to twenty years) a move to grocery chains will result in a death sentence of third class status on the shelves of the real tonnage retailers.

New York producers will be left with ONLY the small bodegas and convenience stores and will be saddled with a crippling high cost of marketing to these thousands of small volume retail outlets. The real retail wine markets will be forever closed to them by the big, concentrated global suppliers (Constellation, Gallo, Foster's), and the powerful national market dominating and controlling retailers, (Wal-Mart, Costco, 7-Eleven, etc). This is not because these players are inherently evil, it's just the way of the world.

The best strategy for New York's wineries is a to forge a stronger alliance with local wholesalers to keep marketing costs down to achieve efficient market penetration, and continue to partner with NY liquor store retailers that have a vested interest in helping them grow. They must also look to broaden their market to a larger, multi-state region. There are huge population centers very close to us, (NYC, Boston, Philadelphia, Washington, Chicago) that need to be tapped. But they must recognize that the boom years of wine growth are over. Market shares of California and Washington state are firmly entrenched and will not easily be changed now. New York missed it's chance by not embracing the national market decades ago. Throwing liquor stores under the bus now will not make up for that lost opportunity. It will simply exacerbate their ability to compete in today's market. Why they can't understand that simply amazes me.

Please, pass this information on to your New York winery friends. They need to understand the truth about wine in grocery stores, and they need to know that New York's liquor stores are their best partner for continued growth within New York state. As far as capturing market share in those huge nearby population centers? That will take some hard work and some innovative marketing techniques, but I am sure it can be accomplished.

"More disturbing yet is that such concentration is not the exception in the United States but increasingly the rule. A quick tour of almost any grocery store reveals degrees of concentration that make Menu Foods look like a novice. Let’s take a quick walk around the average U.S. grocery or big-box store.

Over in the health-care aisle we find that Colgate-Palmolive and Procter & Gamble split more than 80 percent of the U.S. market for toothpaste, including such seemingly independent brands as Tom’s of Maine.

In the cold case we find that almost every beer is manufactured or distributed by either Anheuser-Busch InBev or MillerCoors, including imports like Corona, Beck’s, and Tsingtao; regional beers like Rolling Rock; once independent microbrews like Redhook and Old Dominion; and even “organic” beers like Stone Mill Pale Ale.

Perhaps Americans are comfortable with the fact that Campbell’s controls more than 70 percent of the shelf space devoted to canned soups. After all, the firm grew to prominence after its launch in 1869, thanks to its pioneering successes in integrating advanced chemistry, mass manufacturing, and modern advertising.

But what are we to make of the modern snack aisle, where Frito-Lay in recent years has captured half the business of selling salty corn chips and potato chips?

And what about the business of selling tap water in plastic bottles? Here, if anywhere, is an activity that any enterprising young American should be able to master. All you would seem to need to enter the local market for water is a spigot, some bottles, and a cool label. Yet nine of the top ten brands of bottled tap water in the United States are sold by PepsiCo (Aquafina), Coca-Cola (Dasani and Evian), or Nestlé (Poland Spring, Arrowhead, Deer Park, Ozarka, Zephyrhills, and Ice Mountain)."