For Earth Month, Target Introduces A Range Of Affordable Wine In Paper Bottles
Target has a lot riding on its food and beverage business. Currently representing 23% of merchandise sales and its largest segment at $23.8 billion last year, the business has grown nearly $9 billion over the last five years.
Since restoring the 'Tarzhay' image is central to the retailer's growth plans, Target is applying the Tarzhay private label topspin to its biggest revenue generator. Its Good and Gather brand, introduced in 2019, is a notable success. It generated nearly $4 billion in sales last year and is its largest food and beverage owned label – the term Target prefers to private label.
Coming next to Target's beverage assortment with the same better for the wallet and better for the environment message is a new Collective Good wine range at a super-affordable $9.99 price. It comes packaged in a recycled paperboard bottle that is five times lighter than glass and has a significantly smaller CO2 footprint to produce, ship and dispose of.
Rick Gomez, Target's chief food and beverage officer, said at a recent National Retail Federation conference that value is always top of mind at Target, but added, 'We have to think about value more holistically than just price.'
Innovation is a way Target thinks more holistically and the Collective Good wine range is an excellent example of that. 'Innovation comes big and small. It's in products and services. And we found a lot of innovation on ease, providing joy, providing affordability,' he continued.
Discovering the 'joy of everyday life' is Target's raison d'être and for many, wine is one of life's joys, so Collective Good wine is a fit.
Collective Good adds to a growing list of Target owned-wine brands, such as the Wine Cube containing the equivalent of four wine bottles for $17.99 and the California Roots range, which debuted in 2017 at $5 per bottle and remains at that price today.
Collective Good will launch with four varietals, including Cabernet Sauvignon from California, a Red Blend from Spain, Sauvignon Blanc from Chile and an Italian Pinot Grigio. The imported wines are sourced by California's Latitude Wines and the paper bottles are filled by the Monterey Wine Company.
All the sourced wineries have an environmental edge, so in California, a wind turbine provides 100% of the winery's energy needs and the Italian winery uses dry farming to grow grapes without irrigation.
Yet it's the low-carbon paper bottle, called the Frugal Bottle designed and developed by the U.K.'s Frugalpac company, that makes Collective Good stand out. While shaped to mimic a traditional wine bottle, the recycled paperboard container allows for 360-degree branding across the bottle so that it makes a big impression on the shelf.
Inside, the wine is held in a plastic food-grade pouch, like boxed wine, which is recyclable and it uses nearly 80% less plastic to produce than a typical plastic wine bottle.
Target is the first major U.S. grocery retailer to introduce wine in the Frugal Bottle across all its stores, though Whole Foods did a limited test last year and Aldi launched some wines with Frugalpac in the U.K. last year.
The Frugal Bottle was awarded the King's Award for Enterprise in Innovation by King Charles last year. And the Monterey Wine Company, that is packaging the wines for Target, has invested in a Frugal Bottle assembly machine so the bottles will be all U.S.-made and not subject to tariffs.
Silicon Valley Bank's Rob McMillan, a leading wine-industry analyst, believes that Target is onto something as it moves deeper into the private label wine business with a sustainability edge.
'The world alcohol beverage business is in a contraction phase,' he said, noting a 3% decline in worldwide wine sales last year. By contrast, private label wines, like that from Target, Costco's Kirkland, Trader Joe's, Whole Foods, Aldi and Walmart, are estimated to have grown in the low teens.
Clearly, more affordable private label wines have added appeal when budgets are tight and are an everyday indulgence for those with less refined wine palates. Collective Good brings innovative packaging into mix, making it even more appealing to the environmentally-conscious, next-generation consumer.
'One of the differences for the 30-to-45-year-old consumers is the notion of carbon footprint,' McMillan shared. Noting that wine brands went through a phase of bottling in increasingly heavy wine bottles – indicating the 'contents inside must be good because that's expensive packaging' – he observed that 'heavy glass and liquid don't fit a green narrative and the industry is slowly changing from that practice.'
'Bag-in-a-box, Tera-Pak formats and paper bottles have been in the works for the past decade as part of several still-evolving wine industry solutions for lowering the carbon footprint,' he said.
'Target's focus on paper bottles is aimed at capturing a younger cohort that is more influenced by earth-friendly products than past generations. It's not just about bottle weight or carbon footprint. The Collective Good branding, which takes up more space on the bottle than a description of the wine inside, is one example of how Target is bringing home the point.
'It's masterful branding and marketing. There is every reason to expect the brand and packaging will be a success,' he concluded.
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