BJ's adds premium spirits to private label line

Dive Brief:

BJ's Wholesale Club has launched a premium spirits collection under its Wellsley Farms private label, according to a press release. The new spirits include 1.75-liter bottles of Canadian whisky, vodka and Irish whiskey.
The vodka is crafted with U.S. corn, distilled six times and is gluten-free. Pricing will start at $18.99. BJ's Canadian whisky has been aged in oak casks for eight years and has a mellow spirit, the company said, with prices starting at $20.99. The Irish whiskey is a medium-bodied whiskey aged four years, with hints of chocolate-covered toffee. Pricing begins at $27.99.
The spirits are for sale in select BJ's locations now, and are available for delivery from some locations in North Carolina, Ohio, Connecticut, Massachusetts, Michigan, Virginia and Florida through BJ's same-day delivery service.

Dive Insight:

Alcohol is high on the list of priorities for grocers with many, including BJ’s, now offering alcohol delivery and adding private label wines. Few food retailers, however, have added private label liquor.

For BJ’s, entering into the private label spirit space could be a way to push back on club store competitor Costco, which is known for its private label liquor line. Kirkland-brand liquors are popular and the category has seen steady annual growth, boosting Costco's bottom line.

BJ’s may be looking to give its earnings, and holiday sales, a similar bump. The club store already tapped the wine sector with the release of its five Wellsley Farms private label wines in May.

Typically, alcohol sales will bring in a minimum of 25% profit margin for retailers, which is significantly higher than low-margin food products in grocery stores. Liquor sales in general reached record highs in 2018, gaining market share over beer and wine, according to a report by the Distilled Spirits Council.

Other retailers that have recently launched alcoholic private label products include Target, which expanded its private label wine collection earlier this year. In Europe, Amazon just launched a line of private label wines in Germany and also introduced its own gin in the U.K.

BJ's also offers same-day alcohol delivery for its customers in the select states, a service that is heating up among retailers. Walmart recently rolled out beer and wine pickup and delivery, and Aldi added beer and wine delivery through Instacart. Kroger, meanwhile, expanded its wine delivery for the holiday season.