Lila Wines was introduced by Latitude Beverage Company last spring, quickly gaining national distribution. Over the past year, the company made major changes to the brand to improve overall quality, including moving production and canning to Europe within close proximity to its source wineries.
The company also just launched Lila Sparkling. Produced using a similar method to Prosecco, the Italian sparkler is 11% ABV, slightly below the brand’s Rose and Pinot Grigio offerings.
I recently spoke to Kevin Mehra, President of Latitude Beverage Company, about the new sparkling canned wine and other brands within the portfolio.
Beverage Wholesaler: Why is now the right time to launch Lila Sparkling?
Kevin Mehra: Obviously canned wines is an emerging category. We had a successful launch last year with Lila, selling almost 25,000 cases and quickly getting a national distribution network. That’s hard for a small company with our footprint. Since then, consumers, distributors and retailers have been asking for a sparkling wine from us. If you include cocktail mixes like sangrias as part of the canned market, sparkling is about 50% of sales for the category and we didn’t have one. Our 90+ Cellars sparkling business was up 89% this year, which is a big part of our growth, so now was the time to introduce a sparkling wine for Lila.
BW: In general, what are the biggest challenges facing wine brands right now?
KM: I think in general consolidation makes things difficult. One of the fastest-growing categories for us is grocery and club stores. If you’re launching a new product, consolidation in all tiers makes it difficult to get into stores and reach consumers. There are fewer and fewer distributors in each state, and they each have 3-4,000 wine SKUs and likely have a similar product from a larger supplier. Once you get a distributor, getting on the shelf is hard with fewer independents, since they’re consolidating to compete with grocery chains. There are a lot of challenges, but you’re successful if you focus on consumers and giving them a quality product at a good price.
BW: What are the biggest consumer trends propelling the wine category forward?
KM: The younger consumers are introduced to wine earlier and have an appreciation for different types of wine and are open to different brands – which is a positive trend for us. We’re introducing new products every 60 days, so we find it’s great that younger consumers like to discover. They’re not afraid to try different imports, domestics, varietals and blends.
BW: Besides Lila, what other brands under the Latitude Beverages umbrella have expansion plans this year?
KM: Mija Sangria had a great year last year with 24,000 cases sold and 41% growth. We only had a red sangria before. We’re launching a white sangria, which will be unfiltered and have orange, lemon, lime, guava and lychee flavors. It’s floral and sweeter and a complex sangria, which is launching in early May.
BW: In general, how do you feel about the coming year?
KM: We have a lot of optimism for Lila in 2017. We learned a lot about canned wine in the last year, including from three big problems we encountered. We had out-of-stocks, our lead times were almost 90 days due to the demand for cans from craft beers, and we had some quality issues with importing wines from Europe and canning them in the U.S.
We’re confident we can almost double the business this year because we’ll be in stock all year after moving production to Europe. Lead times have gone down from 10 weeks to two days for the time from when the wine leaves the winery to when it’s canned. Our pricing has dropped as a result, which allows us to meet a lower featured price at retail.