Celebrating its 100th year in 2022, Vinmonopolet, the retail wine monopoly of Norway, is tasked with reducing overconsumption of alcohol while enabling a growing food and beverage culture in Norway. With over 32,000 selections, covering 95% of the population, and educating customers with podcasts and other programs, Trond Erling Pettersen, category manager, describes how the monopoly serves all segments of its customers and operates in a fair, transparent manner.
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Detailed Show Notes:
Vinmonopolet = “wine monopoly”
- ~95% of the population lives w/in 30 min drive of a retail store
- 340 shops
- >32,000 different products, >20,000 wines
- Basic range - ~1,000 wines, always on display in stores
- Ordering range - importers can stock anything, can be ordered from monopoly website or app, and have wines delivered or available for pickup
- Stores can select ~25% of shelf space from the ordering range
- 2021 - 118M liters of alcohol sold, 96M liters of wine (10.6M 9L cases) worth KR27B (~$2.7B) - taxes and profits go back to the government
Monopoly’s purpose
- Established due to overdrinking at the turn of the 20th century - it was a source of poverty, hunger, and social issues
- Founded in 1922 - 100th birthday in Nov 2022
- 1919 - ban on spirits
- 1922 - created monopoly to have the responsible sale of alcohol
Restaurants and bars
- Buy directly from importers and producers, do not go through monopoly
- Some trends start in restaurants, then customers go to the monopoly to buy
- Restaurants have higher-end wines and often cellar wines
Wine sourcing
- >600 importers supply monopoly, needs to go through a supplier, no direct purchasing allowed
- Ordering range - free access to market, suppliers that list whatever they want
- Special selection - high-end, allocated wines purchased for monopoly
- Basic range:
- It starts by looking at sales figures, trends, customer demands, and holes in the range
- Conduct research by meeting with producers and importers
- Develop a tender plan (tenders 2x/year) to outline what to purchase for the next year with very detailed specifications (e.g., max price, packaging, region, etc.)
- Get samples and conduct a blind tasting panel which is scored
- Launched in stores with guaranteed placement for one year
- Wines then compete based on sales volume
- An extensive and fair process
Pricing - uses a standard formula
- Average wine - ~50% taxes, ~10-15% monopoly margin, ~35-40% supplier share
- Monopoly provides calculators for suppliers to set pricing
- Pricing transparency on the website
Secondary market
- Started auctions ~10 years ago for people to trade wines
- Monopoly has people that value and inspect wines
- Set % fee for monopoly margin (lower than US auction houses)
- Partnered with an auction house
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