SANTA ROSA -- Adler Fels is experiencing a booming business producing about 120 control- and private-label wines for distributors, retailers, restaurants and hotels.
Interest in high-quality private-label wines has been increasing in the past several years because a grocery or restaurateur may reap higher profits on each bottle sold and offer something different. Consumer demand for lower-priced wines in the past few years is accelerating that trend.
Roughly 400,000 cases out of Adler Fels' expected production of 560,000 this year are control and private labels, according to Dana Fehler, marketing and public relations manager. Total production increased 6 percent from last year.
"Private-label growth has been phenomenal in the past year," said Ms. Fehler, marketing and public relations manager. "The under $10 segment has taken off this year. That is our sweet spot."
Adler Fels' private and control labels retail for $8 to $16 per standard-sized bottle.
[caption id="attachment_25972" align="alignright" width="130" caption="McIlroy Cellars is a national private label Adler Fels offers."][/caption]
Private labels, also called corporate or store brands, provide an exclusive brand the client controls. For example, Adler Fels makes wines for Cost Plus World Market, Total Wines & More, a big East Coast chain that is starting to open locations in California, and last year produced a Napa Valley chardonnay for Costco Wholesale's Kirkland brand.
A number of North Coast wineries have started to produce a few private labels, but few producers make that the focus of the business. An exception is Novato-based Winery Exchange, which in the past nine years has become a global broker of corporate alcoholic-beverage brands, now making about 300 beer, wine and spirits products.
Control labels are licensed for use by certain companies in certain markets. For instance, Adler Fels has created wines that a distributor may use nationwide or in select markets.
Beside wines made for others, Adler Fels has "core" proprietary brands: Adler Fels ($15 to $25), Big Ass ($15), Leaping Lizard ($12), Coyote Creek ($8) and Coastline ($10).
Recently, parent company Adams Wine Group, which acquired Adler Fels in 2004, put its 3,000-case-a-year White Cottage Ranch brand into the Adler Fels marketing group. Those $65 to $85 a bottle wines are made from Biodynamic and organic Howell Mountain grapes at the White Cottage winery in Napa Valley.
Founded by the Coleman family in 1979, Adler Fels is a negociant producer, which means it buys wine in bulk to make most of the wine. The company keeps original grape contracts to make the Adler Fels label.