Tesco Launches Fresh & Easy Neighborhood Market-Developed 'The Big Kahuna' Brand Wine in United Kingdom, South Korea Stores

"The Big Kahuna" on the shelf at a Fresh & Easy store in California.

Private Brand Showcase

El Segundo, California-based Fresh & Easy Neighborhood Market's "The Big Kahuna" proprietary or private brand wine has been launched in Tesco-owned stores in the United Kingdom and South Korea, along with being offered for sale by the case on the UK-based retailer's Tesco.com website.

Tesco-owned Fresh & Easy introduced "The Big Kahuna" as its in-house value-priced wine brand over three years ago, following a path blazed most successfully in the U.S. by Trader Joe's with its super-popular $1.99 per bottle Charles Shaw brand wine, more commonly referred to as "Two-Buck Chuck," the huge success of which has spawned similar priced value brand copy-cat versions from nearly every major food and grocery retailer in the country.

The Australian-produced "The Big Kahuna" comes in two varieties: Cabernet Shiraz (at top) and Chardonnay.

Fresh & Easy sells the wine in its stores in California (127 units) for $1.99 (750-ml bottle), and for 2.99 per bottle in its Nevada (21 units) and Arizona (28 units) grocery markets.

The wine is being offered at a higher price-point in the UK than at Fresh & Easy Neighborhood Market in the U.S.

For example, Tesco is offering Fresh & Easy Neighborhood Market-developed "The Big Kahuna" wine brand for a considerably higher price on its Tesco.com website in the UK. The current price per case is £22.80 (£3.80 per bottle), which is about $37.18 per case, or $6.19 per bottle, based on today's British pound to U.S. dollar conversion rate. The per-bottle retail in the stores it's currently in is a bit higher.

Tesco has a long history of offering Australian wines in its stores in the UK and in Asia, particularly South Korea. In fact, the British retailer is the largest customer of wine produced in Australia, largely based on the numerous Tesco proprietary or private brand wines produced for the retailer in the country.

It's a logical and smart move for Tesco to offer Fresh & Easy's "The Big Kahuna" brand wine in its UK and South Korea stores as well as online via Tesco.com. Doing so expands the number of points-of-distribution - and thus increases total sales - for the brand, which in turn should allow Fresh & Easy Neighborhood Market to obtain a lower cost of goods for "The Big Kahuna" from its Australian producer.

A lower cost of goods means a better gross margin on the wine for Fresh & Easy, which is important because at $1.99 and $2.99 per bottle retails, along with the shipping costs from Australia, there isn't much gross margin in "The Big Kuhuna," or any other wine with similar overseas origin and the same points.

But even a few pennies cost savings per bottle can add up to nice little profit boost on the wine for Fresh & Easy Neighborhood Market because the value-priced "The Big Kahuna" is a high volume brand for the grocer.

Additionally, since the Australian producer of "The Big Kahuna" also produces additional proprietary wine brands for Tesco, it makes good top and bottom line sense to us to maximize the brand opportunities across all its chains globally for UK-based Tesco whenever it makes sense.

"The Big Kahuna" is the second private brand developed at El Segundo, California-based Fresh & Easy that Tesco is distributing in its stores in the UK, where it's the leading retailer of food and groceries.

The first brand, which we broke the news about in these two stories - June 26, 2011: Tesco Bringing Fresh & Easy Neighborhood Market's 'goodness for kids' Brand to the UK - With a 'Tesco' Twist; and June 27, 2011: Tesco Introduces First Items in Fresh & Easy Neighborhood Market-Developed 'Tesco goodness for kids' Brand in United Kingdom Stores - is "Tesco Goodness for kids", which is based on the "fresh&easy goodness for kids" brand developed in Southern California.

The Australian-produced wine brand with the Hawaiian name, "The Big Kahuna," is the first Fresh & Easy Neighborhood Market-developed private brand product to be sold in Tesco's stores in Asia we're aware of, in this case the country being South Korea.

Interestingly, we suggested in this March 8, 2011 piece - March 8, 2011: Tesco's Fresh & Easy ♥'s California With 27 New Varieties of Proprietary Brand Wines From the Golden State - that Tesco should take a few or all of Fresh & Easy's then new proprietary brands of California wines to the United Kingdom and South Korea.

Perhaps a few of those brands of wine produced in California will be the next ? Stay tuned.

Related Stores

Read more about wine at these links: California wine competitions, Fresh and Easy proprietary wines, Fresh and Easy wine, fresh and easy wine category, liquor wine beer categories, wine awards, Wine Category Report, wine merchandising,  Side by Side wine, category wine

Additionally, you can read past stories in our Private Brand Showcase feature here.

Competitive Retailer Wine Category Report: First Person Singular - 'How I Sold 37 Bottles of Wine in 45 Minutes at Trader Joe's'

The Trader Joe's store in New York City's Palladium building in Manhattan has two entrances on the same street. The entrance pictured above, which leads directly into the store's wine department, is designated as Trader Joe's Wine Shop. The other entrace, which is just a few feet down the way and leads into the store's main grocery section, has traditional Trader Joe's grocery market signage. The Manhattan Trader Joe's, which opened in 2006, offers wine delivery to homes and businesses. The Manhattan store also is the first, and one of just a few, Trader Joe's markets that offer home wine delivery.

From the Fresh & Easy Buzz Editor's Desk: Specialty grocer Trader Joe's, which currently operates about 312 stores located throughout the United States, has become one of the premier wine retailers of any format in the country.

The grocer's $1.99 a bottle ($2.99 in some states) Charles Shaw proprietary-blend California wines, called "Two Buck Chuck" for short, took the U.S. wine consuming public and the wine industry by storm when they were introduced in the stores over a decade ago.

The Charles Shaw wines are produced for Trader Joe's by Ceres, California-based Bronco Wine Company.

The wines took the wine industry by storm again in 2007 when Trader Joe's Charles Shaw Chardonnay, which sells for $1.99 a bottle in California where the grocery chain is headquartered, won the grand prize medal in the prestigious California State Fair Wine Competition, beating out wines that retail for ten times the price for the Double- Gold Medal.

Tesco's Fresh & Easy followed Trader Joe's lead in the $1.99 a bottle ($1.99 in California, $2.99 in Nevada and Arizona) wine segment. It sells an Australian proprietary-blended wine, "Big Kahuna" brand, for the same prices in its Fresh & Easy grocery markets in Southern California, Nevada and Arizona.

Trader Joe's stores sell lots of other brands and varieties of wines besides "Two Buck Chuck," which comes in numerous varieties. And the stores sell lots of wine in general.

Trader Joe's sells this high volume of wine in its stores by merely putting it on the shelf (self service), pricing it right and regularly featuring various varieties in off-shelf displays with colorful signage.

Of course, the grocer is able to do this because it has built a strong brand as a retailer that offers quality wines at discount prices over a multi-year period of time. The retailer also puts lots of effort into the wine category.

But it appears with the help of a wine and food specialist, Mike Samii, conducting a professional experiment, a Trader Joe's grocery market in San Diego, California sold even more wine, in a very short period of time, than the chain's already strong reputation for wine sales would otherwise even permit. In fact, we think it might be a world record of bottles of wine sold in a single store in a 45 minute period of time.

You can read the first-person account by chef and wine specialist Mike Samii about how he sold 37 bottles of wine in 45 minutes at a San Diego Trader Joe's store by just walking and talking to shoppers in the store. It's published below.

We think Mike Samii's experiment suggests having store employees who have wine knowledge helps increase wine sales. It's also a strong argument for those supermarkets that employee wine experts or wine stewards in-store. And in Mike Samii's case, he might want to hire himself out to wine retailers at a day rate.

Mike Samii's first person piece:

How I sold 37 bottles of wine in 45 minutes at Trader Joe's
By Mike Samii
Special to Fresh & Easy Buzz

My name is Mike Samii, and I am a Cordon Blue Chef. I have an extensive background in gastronomy and wine.

I shop at Trader Joe's regularly, and I always see people going up and down the aisles looking for a bottle of wine and not knowing what wine to take home. Frankly with the many choices, available, and not knowing what’s what, it is not always easy to choose the right wine.

So I decided to do an experiment one day. One Saturday this last summer, I walked in to one of the Trader Joe's stores in San Diego, California with a clipboard in my hand, pretending that I am writing down a list of wines I like to get for an event. I walked up to every customer that came to the wine section and started looking at the wines for a minute or two, and told them, without introduction, about how good certain wines were in the section and how they tasted.

And, except for a few of the customers, most of them looked at me like I was a god sent. Almost, everyone of them grabbed a bottle or two of the wines I suggested, and thanked me for it. One guy even took 9 bottles of wine and filled up his hand basket. Keeping track of how many bottles people took, my tally read 37 after 45 minutes. I was so gratified to be able to make a difference in some people’s lives by making them a little easier

[Fresh & Easy Buzz Editor's Note: Mike Samii is a Washington state-based chef, wine expert and consultant. For more information about Mike Samii you can go to: www.tastefullyamerican.com , or call him at 425-299-5819.]

Resources:

Related posts from Fresh & Easy Buzz:

Trader Joe's:

>July 22, 2008: Obituary: Innovative Trader Joe's Head Wine Buyer and Popularizer of Value Wines Robert Berning; 73

>March 4, 2008: In Vino Veritas: Fresh & Easy Store Brand Wines Win Two Silvers and Lots of Bronze Medals; Trader Joe's 'Two-Buck Chuck' Chardonnay Wins a Double-Gold

>July 9, 2008: In Vino Veritas: Fresh & Easy Announces 63 Wine Awards to Date; Will Face Off Again Against Wine Award Winning 'Big Kahuna' Trader Joe's at State Fair

>September 22, 2008: Monday, September 22, 2008: Fresh & Easy Buzz Strategy Session: Trader Joe's and the Key to Enlightenment?

>November 6, 2008: Serendipitous Marketing & Cooking With the Trader: Trader Joe's Hits A Marketing Home Run Without Doing A Thing

Tesco's Fresh & Easy:

>November 11, 2008: Wine Category Report: Tesco's Fresh & Easy Kicks Off New Merchandising and Promotional Efforts Designed to Grow Wine Category Sales

>October 27, 2008: Category Management Report: Fresh & Easy Conducting Wine Category Review and SKU Rationalization; We Offer Some Analysis

>October 27, 2008: Southern California Market Report: Beverages & More to Join Trader Joe's and Fresh & Easy to Form Manhattan Beach Food and Beverage Retailing Triangle

>March 22, 2008: In Vino Veritas: No Whining About This 'Parker-Point' Rating for a Fresh & Easy Proprietary Spanish Wine

>April 25, 2008: April 25, 2008: Tesco's Fresh & Easy to Launch A Marketing-Oriented, Brand-Building Consumer Public Relations Campaign For its Store Brand Products and its Wines

>April 30, 2009: April 30, 2008: Raising Arizona and Getting Local in the Neighborhood: State's First 100% Locally-Produced Wine Offers Win-Win for Tesco's Fresh & Easy Arizona Stores

>July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages

In Vino Veritas: Fresh & Easy Store Brand Wines Win Two Silvers and Lots of Bronze Medals; Trader Joe's 'Two-Buck Chuck' Chardonnay Wins a Double-Gold

Seven of Tesco Fresh & Easy Neighborhood Market's Fresh & Easy store brand wines recently have been awarded medals at the San Francisco Chronicle and California State Fair Wine Competitions.

The San Francisco Chronicle Wine Competition is the largest judging of U.S-produced wines in the nation. Entered wines are judged by a panel of wine experts from all sectors of the industry--wine writers, buyers, vintners and others--over a period of days according to international wine judging rules.

The California State Fair Wine Competition is arguably the most prestigious wine competition in the United States, and is recognized internationally among members of the global wine industry. It's held as part of the California State Fair in Sacramento each year. It's judges are among the most experienced and prestigious wine experts in the world.

The recently-concluded 2008 San Francisco Chronicle Wine Competition judged 4,235 wines entered by 1,500 wineries from throughout the U.S.

Five Fresh & Easy brand wines won a bronze medal in the competition in their respective categories. Those wines are: Fresh & Easy Hilltown Cabernet Sauvignon ($6.99 bottle), Fresh & Easy Napa Family Vineyards Merlot ($10.99 bottle), Fresh & Easy Hilltown Merlot ($6.99 bottle), Fresh & Easy Hilltown Chardonnay ($6.99 bottle), and Fresh & Easy Hilltown Sauvignon Blanc ($6.99 bottle).

Additionally, a sixth store brand--Fresh & Easy Family Vineyards Cabernet Sauvignon ($10.99 bottle) won a Silver medal in the San Francisco Chronicle competition.

Over at the California State Fair judging, where over 3,000 wines from 600 different wineries competed, Fresh & Easy store brands scored well with one of its wines. That wine, Fresh & Easy Northwood Cabernet Sauvignon earned a Silver Medal in the prestigious wine competition. Further, the wine received 92 points out of a possible 100. The Northwood Cab was one of six wines in the Silver award category to receive the highest score a Silver medal-winning wine can obtain in the judging.

The Fresh & Easy brand Northwood Cabernet Sauvignon sells for only $3.99 bottle in the grocer's Southern California stores, and $4.49 bottle in its Arizona and Nevada grocery markets.

The Fresh & Easy brand wine won in the 2007 California State Fair Wine Competition, which was held last summer. The event is held every year beginning in late July and ending on September 3. The 2008 competition runs from late July to September third this year.

Tesco's Fresh & Easy Neighborhood Market hired Philip Reeman, who is one of only 265 wine experts in the world to have earned the title Master of Wine, to create its Fresh & Easy store brand wines.

Fresh & Easy also has taken a page from Trader Joe's wine merchandising innovation (it's incredibly-selling Charles Shaw brand $1.99 bottle of wine called "Two-Buck Chuck") and is selling its own version called "The Big Kahuna (TBK)." TBK is from Australia and comes in two varieties: Chardonnay and Cabernet Sauvignon-Shiraz. TBK sells for $1.99 in the Southern California Fresh & Easy stores and for $2.99 in the Arizona and Nevada grocery markets.

Trader Joe's "Two-Buck Chuck (TBC)" comes in seven varieties: Charles Shaw brand Chardonnay, Cabernet Sauvignon, Merlot, Sauvignon Blanc, Shiraz, Valdiue (like a Beaujolais Nouveau) and in a limited addition Pinot Grigio.

Charles Shaw brand is a California wine though, produced exclusively for Trader Joe's by Ceres, California-based Bronco Winery, using wine grapes from California's Central Valley and Napa-Sonoma regions. The Charles Shaw "Two-Buck Chuck" brand is sold only at Trader Joe's grocery stores.

The Tesco Fresh & Easy wine folks will need to kick "The Big Kahuna" up a few notches though if they expect to compete with Trader Joe's "Two-Buck Chuck."

TJ's $1.99 bottle of wine surprised the wine world at this very same 2007 California State Fair Wine Competition by winning a prestigious "Double-Gold" medal for its "Two-Buck Chuck" Chardonnay, beating out wines which cost as much as twenty-times it's $1.99 retail price. The Double Gold Medal means the wine was judged to be the best Chardonnay out of all Chardonnay variety wines entered in the competition, regardless of price. [Read more about the "Two-Buck Chuck" win here at the very bottom of the linked page.]

Trader Joe's has set the bar high for Fresh & Easy's same-priced "The Big Kuhuna" wine. We suggest both Trader Joe's and Fresh & Easy Neighborhood Market enter its respective $1.99 premium-value wines, "TBC" and "TBK," in this year's 2008 California State Fair Wine Competition, which is only about five months away.

The two small-format grocers--one owned by the United Kingdom's Tesco (F&E), the other by Germany's Aldi supermarkets (TJ's) can then have an old fashion 'smackdown' in the premium-quality/value priced wine segment. May the best wine...or grocery chain...win.