Private Label Marketing: When Consumers Don't Know Your Brand

0:00Brackenriddle is the number one custom sparkling wine producer. The company makes sparkling wine and then sells it to our clients who then can put their label and sell it in the market under their brand name. How does the marketing for this type of business go like? So there is the B2B marketing. Then I'm responsible for marketing our company, Brackenriddle, which is part of that B2B. And then the final part is B2C for our private label wines. We also sell directly to retailers. Does Trader Joe slap their brand on the wine or is it a Rack and Riddle wine there in that instance? Most of what we do does not say Rack and Riddle.

0:37And so you would not know as a consumer that you are even buying Rack and Riddle wine. And so what I tell my friends when they say, oh, I've never heard of this company before, tell me more. My answer is don't know of the name of our company, but you've probably had our wines unbeknownst to you. We really let our customers shine and they can put their brand and label on it.

1:23And just for our listeners, we're offering an exclusive 10 % discount on your first hire. All you need to do is visit GlobalTalent.co, click Start Hiring, and mention the podcast listener discount when we get in touch. And with me here today is Sarah Qualters, the Vice President of Marketing at Rack & Riddle, a company whose mission is to craft superior sparkling wines. Through years of steadfast dedication and thoughtful expansion, Rack and Riddle has become the number one custom sparkling wine producer in the U.S. with 3.5 million cases of capacity. So with that said, Sarah, welcome to the show.

2:01How are you doing today? Good. Thank you so much for having me today. No, no problem at all. I must say that when I read what Rack and Riddle is and that you're the number one custom sparkling wine producer, I'm like, oh my goodness, these people are really big. So in order to get the audience a bit more in context, would you be able to tell us some info about your background, how you got into Rack and Riddle, and then in your own words, what Rack and Riddle is? Yeah, absolutely. Thanks, Andres. I am a brand marketer at heart. I've been doing that for about 15 years. I started my career working at Chlorinx, which is a leading brand in the U.S.

2:36and internationally for cleaning products, but a lot of other different brands as well. and I started working there because I wanted to get some brand management and marketing fundamentals and after working there for a couple of years I found that I loved the company and what I was doing but I wasn't super passionate about the category. I was a scientist at cleaning products. At the time I had no kids. I did not own a home. Cleaning was not a very big priority to me about 15 years ago. I feel a little bit different now that I am a homeowner and have young kids at But anyway, back then cleaning was not a huge priority.

3:11And I had met some friends through business school that were working at a company called The Wine Group. And I was much more passionate about wine as a category. And so I moved to The Wine Group to lead the innovation team. I spent 10 years there working in various different marketing roles in wine and then had the opportunity to move to Rack and Riddle. And it was really my private label experience that I'm sure we'll get into today that brought me to Rack and Riddle because Rack and Riddle, as you mentioned, is the number one custom sparkling wine producer. So what that means is the company makes sparkling wine and then sells it to our clients who then can put their label and sell it in the market under their brand name.

3:52You might ask why they do that. And the reason is sparkling wine is made in a completely different way from traditional still wine. So you have somebody who is Andreas's wine company who's been making Cabernet and Chardonnay for ages and wants to add a sparkling wine. It's not turnkey. It's a whole different manufacturing process and takes a lot of operational expertise, winemaking expertise, specific equipment, and then most importantly, time. Because you have to age the wine in barrel to make a traditional method wine. So rather than doing all of that CapEx yourself, they will call us and then we can provide sparkling wine for them to put under their label.

4:36So that's basically what we did. Wow, that's amazing. And well, since this is future of consumer marketing, the first question that pops into my head is, how do you market this wine that doesn't actually have a brand because it's for other people who actually need it and you're producing it customly for them? Then how does the marketing for this type of business go like? Yeah, it's interesting because my career up until this job, which I've been in for about nine months now, has all been B2C marketing. Business to consumer. Yeah, to consumer. And so I worked previous on cupcake brands, wine, cupcake vineyards, and I worked, as I mentioned, at Clorox.

5:14And that was all brand marketing. Now in this role, I actually wear, in my mind, three different marketing hats. So there is the B2B marketing, which is new to me, and that is what I described to you. So I am selling to Andreas' family wine that they want to buy our product and then put it on their label. So that's B2B marketing. Then I'm responsible for marketing our company, Rack & Riddle, which is part of that B2B. So I want them to know about our brand if they are a potential client. And then the final part is B2C for our private label wines. So in addition to the work that we do with clients, like your family vineyard that I just made up that I'll continue through the show, easy to have an example.

5:57So congrats, you now are a family winemaker. So in addition to that, we also sell directly to retailers. And so retailers is somebody like Trader Joe's, Aldi, Kroger, Albertsons, et cetera. And they want to have a wine brand. And so we help provide a wine brand for them and then help them with their marketing to their consumers so that they can purchase a delicious sparkling wine. Okay. Wow. So, like, it's a full circle movement that you guys have. You create the wine, you sell it to the retailers, and then you also help them to market it. And the thing is that I want to know is when you sell it to, suppose, I don't know, Trader Joe's or something like that, does Trader Joe's slap their brand on the wine or is it a rack and riddle wine there in that instance?

6:42There is no rack and riddle branded wine with a very small caveat that we do technically have a very tiny wine club. But most of what we do, the vast, vast majority does not say rack and riddle. And so you would not know as a consumer that you are even buying rack and riddle wine. And so what I tell my friends when they said, oh, I've never heard of this company before. Tell me more. My answer is, don't know of the name of our company, but you've probably had our wines unbeknownst to you. And so we don't have rack and riddle branded wines. We really let our customers shine and they can put their brand and label on it.

7:21I love that. So you guys are actually helping everybody out in the back end. And it's just like staying more in the shadows and making sure everything's working properly. But that's super cool. Okay. Okay. And in terms of like the marketing mix, when you help out somebody like Trader Joe's to market the wine that you guys are giving them, What do you feel is working best for you when you're in that situation? Yeah. So I guess two answers to this. In terms of marketing for rack and riddle, it's email marketing through and through. That is absolutely what is most important for us because we have over 400 clients that are buying from us regularly.

8:00So you mentioned our capacity earlier. We're a big company, but under the radar. And so email marketing is what's most important for us. In terms of what's most important for the customers, like you gave the example of a retailer like Trader Joe's, the answer is the typical marketing answer of it depends. So if you put yourself in the shoes of a retailer, so Trader Joe's, the example you brought up, Trader Joe's has a clean store policy. If you're imagining walking through a Trader Joe's, you don't see coupons, you don't see things hanging off the shelves, you don't see neck tags. It is really just their fearless flyer is what they call it.

8:39It's their ads that they use. And so they have that. So Trader Joe's, if we had a wine there, would want to promote it in their fearless flyer. Other retailers, for example, like Publix or Albertsons, they have a ton of promotions. So you might see shelf talkers or neck labels, different coupons, etc. In which case, if that store allowed that type of marketing, we would help provide that and work with them to make that happen. Okay. So it's more based on the framework of the customer you're helping out rather than an actual strategy that Rack and Rill comes up with and says, hey, this is what's going to work best.

9:15It's more tailored to what they need and how they function. Our strategy is helping them with their strategy. We're very customer first organizations. So and every retailer is different. They all have their secret sauce. And so we just want to have them with what works best for their customers. And Sarah, is there any, like I want to say, minimum requirements for a brand to be able to work with Rack and Riddle? Or can my family wine company just reach out to you guys and you'll sell us, I don't know, I need 10 cases? Or is there a minimum that we need to be able to purchase? Yeah, we have minimums and it depends on which product it is.

9:55And it's honestly just to make it worthwhile for us and for you when you have to transport it and all of that. But we work from small family wineries all the way up to some of the biggest wine companies in the country. So yes, we're very flexible that we will work with you depending on your size. There's just some small minimums depending on which product you are looking to buy. Okay. And is there ever a situation where you're helping out so many brands that they all have their wines in the same shelf and you're actually the real producers of all these different brands of wine, but it comes just from a same origin?

10:31Great question. So what we do a lot is everything, every winemaker, we will talk to them and we can do what's called a custom dosage. And that is later on in the winemaking process. I won't get technical, but it's a way for you to customize basically the sweetness of the wine, which will make it taste drastically different. So the short answer to your question is no, it is absolutely not the same wine bottle to bottle to bottle under different grams. because the winemakers will come in and add their flair on what it is. The other thing that we do is you don't have to buy our finished products.

11:05There are a lot of our clients that we work with where they can make their own – they have their own farms. They have their own grapes and vineyards. And they have what we call juice is the industry term for wine. And so they have their own wine and they say, we have this beautiful Chardonnay, but what we really want is a sparkling white wine. Can you help us turn this beautiful Chardonnay into a sparkling white wine? Because that's what our customers want is they want to brew from us. And in that case, we will take their grapes. So it's completely all their product. And we will then help through our operations and winemaking team turn it into a sparkling wine for them.

11:43And so in that case, it's completely different taste than their neighbors because it's all their grapes. Ah, I love. So it doesn't even need to be from beginning to end. You can just hop in the middle and help them out at the middle of the process where they feel they have some friction and could use a third party to actually help them push it over the finish line. Exactly. So we sell finished products or in any stage of the process that a customer wants us to work with them. And now I want to switch the perspective a bit more into like the inside of Rack and Riddle. And Sarah, and with this operation that I feel is so huge, how many people do you have helping you out in your team or how many people compose Rack and Riddle as a company as a whole?

12:23Yeah, the team in total is about 180 people, which is quite small given our scale. And a lot of those folks are in operations and manufacturing as you would anticipate. But what's amazing about the company is the technology. We have so much advanced technology in terms of running our lines that you would be shocked if you ever walked through the process of how much is mechanized to ensure that we have everything consistent in terms of our wine quality. So really lean team. And I feel like your next follow up is so how many is in marketing? And the answer is two. Andres, two. So you are currently looking at half of our marketing team.

13:07And I only joined nine months ago. So there was one person in marketing before me and she only joined two years ago. So there was no one working in marketing for the first, let's see, Rack and Riddle is about 18, 19 years old. So the majority of the time the company has been around, it's almost 20 years, there has been no marketing team. Oh, my goodness. So I'm assuming that this service of actually helping the brands who asked Rack and Riddle to make their wines and help them market it, this is something new that just arrives when you arrived and anything like that, right? Yeah. So we've had a sales team who obviously works with our customers, and that has been mostly focused on winery to winery business, like I described.

13:47But the private label space where we're working directly with retailers, that is relatively new over the last few years. Okay. And Sarah, since about 10 months isn't that long, but it's enough to learn and understand the ropes of the business. And what do you feel has happened to your marketing philosophy since you entered Reckon Riddle until now? Oh, interesting. Okay. So as a brand marketer, and as I mentioned earlier, I grew up doing B2C marketing. And so my first thought is always consumer first, like you learned that marketing 101, consumer first. And what's interesting, not only in this category, but in a lot of categories is there are other decision makers along the way.

14:31If I'm only thinking about the consumer, I'm not thinking about all of the steps that need to get there. So I first need the winemaker to choose our wine, to work with them. They then need to work with a distributor because we have a three-tier system in alcohol where you can't sell directly to retailers. It has to go through a distributor. So there's a distributor. And then in the instance of the private label side that I was talking about, there's a customer who has to make the decision. So a consumer is really like the third or fourth touchpoint in this. And you need to think about what you are doing in terms of all of those lines going down the path.

15:07So I need to think about what is it that my winemaker wants, the winemaker wants. Also, what is the distributor looking for in their portfolio? What's important to them? What does the retailer want? And then eventually it makes it to the consumer as well. So I would say being consumer first is very important. It's always important in marketing, but there's other stakeholders involved who are decision makers along the way that need to be factored in. Okay, so now it's not just such a lineal process, but you rather understood in this industry and as you mentioned in others as well, that these key stakeholders in the process need to also be attended to in terms of being marketed properly for them to want to keep using the rack and riddle.

15:49Because now I feel it's rack and riddle isn't that much of a product, but it's more of a service. It's like the service of creating the wine that the customer will need. It's honestly both. It's, you know, we view ourselves as both a product. We have products that we can sell you, but also a service if you already have the wine. But so like adding on to what you're saying, Andreas, our bread and butter is traditional method wine, which is also called method champenois, where the bottle, the wine is aged on the leaves in bottle. And that is how you get the carbonation effect. It's the traditional way that wine was made in France and has been done for centuries and centuries.

16:27So a wine buyer, let's say, Andreas, you now get to wear a new hat. You are a wine buyer for Kroger, let's just say. You probably know all about traditional method wine and can get really, you know, technical about that. But I'll guarantee that the vast majority of the consumers have no idea what that is. Like they probably don't know what traditional method wine is and how that's different than a Prosecco, for example, which is made in a different method. So going back to the idea of who do I think about, I need to think about the buyer. In this instance, I'm saying the Kroger buyer. They understand and can nerd out about traditional method wine and talk to your winemakers about how that's unique and different.

17:11But the average consumer who's buying the wine on shelf has no idea. They think it's a white wine with bubbles. That's all I care about. So I need to be able to walk that fine line and talk to both of these people at the same time. I need to nerd out with the one who wants to nerd out. But then I also just need to talk about like bubbles. Yay for the consumer who just wants my bubbles. Right. That's why I need to think about everybody through the process. Wow. And Sarah, I also want to go back to the fact that your marketing team is just two people. And do you ever feel that the marketing team needs some expansion or that you need help from a bit more of personnel in order to keep succeeding with rack and riddle?

17:51Or are you comfortable in the spot that the company is at right now? I feel like you gave you that to me as a softball, hoping my boss is listening. But I mean, what person is going to tell you their team is fully fleshed out, they have everything that they need? Of course, I would tell you that there are other things that we would love to do. Given where we're at in our growth, I feel like we adequately can support everything that we need to do. I have a wish list of wants versus needs. In terms of the needs, we have everything covered. Me and my teammate, her name's Kim. She's fabulous. We do everything that needs to be done.

18:29But then I have - Shout out to Kim. Shout out to Kim. But then I have all of these wants that would be interesting to try and test out. And I know one of the topics that we'll probably couldn't end the day without is like AI, for example. Like there's only a certain amount of time in the day to test all of the new things out there. And that's what I would love to do if I had a bigger team is to be able to test a lot of the new technology that's coming out as well in marketing. And Sarah, do you have any example of something that you've tested out that worked out really well that you keep on using right now?

19:04Because I was going to ask about AI, but I want to delve first into what you've done already. Yeah, I would say one of the biggest things is innovation and adding an innovation process. So as you can imagine, there was no marketing team. So there was no innovation process or innovation team. But we know that sparkling wine is one of the few bright spots in the wine industry. And consumers, well, in CPG in general, consumer packaged goods, consumers are always looking for something new, right? They always want to try the new flavor, the new whatever it is. And so when I came into the company, I helped establish an innovation process.

19:43And so that has been a really fun, exciting thing to work on. And now we have new innovation that we are presenting to our customers. So that's something that I've been experimenting with and iterating is this process that we are working through. Okay, so that is so cool. So you're not just making the traditional wine that everybody wants or is looking for, But you're also providing options that they don't expect in terms of the fact that maybe that can surprise their consumers and even create more sales or bring back more people and create more customer fidelity. Exactly. So, yeah, the biggest launch, we've had a bunch, but most recently are new flavors of sparkling wine.

20:23So like premixed cocktails are really big, as you've probably seen. And so we are making premixed wine cocktails. So we have a mimosa, we have a bellini and what we're calling an Aronsia spritz. It's like an Aperol Spritz style, like bitters. So we have those, our three premixed that our customers can now buy. And in addition, the other one that I'm really excited about is an alcohol-removed sparkling wine. And that has been a growing trend amongst all alcohol is having alcohol-removed wine. I mean, I know right now we're taping in January, and so dry January is really big. It's getting all the headlines.

20:59And so what we're telling our clients is you don't have to miss out on the consumers who aren't drinking. There is an opportunity there for people who are moderating or not drinking. Well, that's something that I've seen that's been happening in the last year and a bit longer. It's that the younger generations are stopping to drink. And beer companies, for example, they're going crazy and trying to get these younger consumers to buy something. And now it's 0 % beer. And I've heard about zero alcohol wine, but now it's also alcohol removed sparkling wine. Oh, my goodness. It's everywhere. I'm going crazy with that with that trend because it really is super healthy.

21:36And like I like to drink a good beer or a good glass of wine. But when you just want the flavor and you don't want the feeling, you can just take a removed alcohol type of drink. And that's just amazing. But I love how you're entering in that market as well, because it really is something that needs to be paid attention to. And Sarah, now going back to what we mentioned and you briefly mentioned before, it's AI. I know you would like to have more people to explore it further, but have you found methods by your own or with Kim that you feel have worked out or that you're able to express and tell us about?

22:09Yeah, we have been playing around with AI. I would say mostly ChatGPT is the platform we've been using, but it just makes me faster, I would say. And so, for example, what I use it for is I'm preparing, you know, I'm writing an email to the board or to the execs, and I'm off the top of my head just writing down my thoughts of what I think, and then I will put into ChatGPT, take these thoughts and make it a polished email for my board, for example. So I've been doing it for a lot for editing. We also use it for copywriting. So writing LinkedIn posts, same idea. I want to write a LinkedIn post to announce to the world my new alcohol removed wine.

22:51Help me write that in a way that fits the rack and riddle style. We also made a little chat bot in, you've probably seen an agent that we've done in ChatGPT. And so I've already primed it with who our company is and I've made it a marketing assistant for me. And so I use that to just bounce ideas off of them, off of them, off of it, I guess. So I my it is my marketing assistant in chat GPT. And so I will come up with something and ask it if it's a good idea or help me think about this differently. So I use it as kind of a brainstorming tool, a copywriter and an editor mostly. OK, no. And I love that because I've also worked like I've used the agents.

23:37And what I like the most is that it helps you set a standard in the tone and the wording and how the brand speaks about itself. That if you're ever too in your own head trying to get a campaign to go or trying to make something work, it can bring you back to the place where it'll all sound cohesive with the previous campaigns that have been done and what will be done in the future. So I really feel that's something that people are leaning a lot towards because it really helps create that. What's it called? Like that and that flat line of nothing is changing, but it's it's just moving and progressing with the same voice that the people are used to hearing.

24:10OK, and Sarah and Rack and Rill, I know you guys are the number one then in the United States. But are there any plans of expansion or trying to go internationally and sell your product to companies and wineries around the world? Maybe that's something that you guys are looking into. As of right now, we're focused domestically because there's still so much opportunity, we believe, domestically. And our wine, when we make our own wine and sell it, it's California. And we think that that is the biggest opportunity because California, the vast majority of still wine sold in the U.S. is from California because we're the biggest wine growing region domestically.

24:51But interestingly, the vast majority of sparkling wine is imports. It's coming from mostly France and Italy. And so there's this huge opportunity gap that consumers are interested in drinking still wine from California. But when they want a sparkling wine, the majority go to imports. And so there's obviously an opportunity here for California sparkling wine. And so that's why we feel that we can definitely have so much ground to cover here domestically. Okay, I love that. I did not know that statistic, but that's just crazy then. Because you mentioned California as the number one state that produces wine.

25:28The first thing that comes to my mind is Napa Valley, if I'm not mistaken. And I compare that to here in Argentina. It's the region of Mendoza that has the best wines, and it's just crazy. But now that I'm comparing it, I think it's only still wines there as well. So maybe you guys should think about coming to Argentina. I don't want to mention about Argentine sparkling wine. Is that a big thing? That's what I'm thinking. I haven't seen it that much. So we might just have noticed a gap in the market of the Argentinians. Well, okay, we'll have to talk. I'll put you in touch with my guy after this.