California Surplus Wine Reaches Retailers Under Private Labels at Deep Discounts

California wineries are turning to bulk sales and private-label arrangements to move surplus inventory, as discounted Napa Valley wines appear at major retailers, The Korea Daily reports. The paper links the activity to accumulated oversupply and weaker consumer demand.

Navigator Wine Collection plans to sell a Napa Valley Cabernet Sauvignon for $29.99, compared with a stated retail value of $149. Grocery Outlet is also offering Napa Valley Cabernet Sauvignons under its Second Cheapest Wine label, with prices starting at $9.99 for wines the retailer typically prices between $45 and $85, according to the report.

Grocery Outlet told the paper that bulk-wine offers from wineries have risen from roughly 1,000–3,000 cases in 2018 to 20,000–200,000 cases. The report says wineries are using bulk sales and unbranded private-label products in part to avoid putting their established names on discounted wine.

The paper also reports that Kroger said its private-label portfolio includes 20 wines rated at least 90 points by prominent critics. Industry experts cited in the article attribute weaker consumption to reduced alcohol intake, inflation and the popularity of weight-loss drugs. Industry insiders estimate the surplus could take another 12 to 24 months to clear.